ALBANY — New York could see at least $700 million in extra tax revenue through March 2021, but the state’s economic outlook is nonetheless uncertain because of the new coronavirus outbreak.
The state’s latest economic forecast says the spread of the disease could end up severely restraining global and domestic growth and hurting global supply chains. But forecasters say a quick resolution to the outbreak could make the economic outlook less bleak.
The governor and Legislature’s annual consensus forecast was released Sunday — the same day that the state confirmed its first case of COVID-19 in a woman who had recently returned from Iran.
Amid worries about how the outbreak might affect the state’s economy, there was some good news: The forecast estimated that the state could have at least $700 million in extra revenue over the next year, and two separate reports by the state Senate and Assembly say New York could see even more money, predicting over $1 billion more in additional tax revenues through March 2021.
Lawmakers and Gov. Andrew Cuomo are currently discussing how to use any extra revenues in the state budget, which is due by April 1.
The state’s Comptroller Thomas DiNapoli and fiscal watchdog groups are calling for more money in the state rainy day fund in case the economy worsens. Liberal advocacy groups want the state to direct more spending to education and the state’s increasingly costly Medicaid system serving 3 million low-income New Yorkers.
The consensus forecast says the national economy will keep growing but at a slower pace due to declining global growth, a tight labor market and the waning impact of 2017 corporate tax cuts.
The report estimates that personal income and wage growth will increase over the next two years but also at a slowing pace. Any increase to interest rates could also hit New York particularly hard, forecasters warn.