ALBANY – A “nervous” Spitzer administration yesterday painted a grim economic forecast as it prepares to release its 2008-09 state spending plan next week.
Spitzer budget officials are now predicting a shortfall of $4.4 billion that must be filled in the spending plan due April 1 – $100 million more than previously estimated.
Meanwhile, state revenue growth, which had averaged 11.3 percent since 2004-05, is now projected to be $700 million lower than anticipated in the coming fiscal year.
“We’re very nervous about the coming fiscal year,” said Spitzer budget director Laura Anglin.
Taking their toll on state finances, she said, are an expected drop in Wall Street profits and bonuses, a slowdown in the housing market resulting from the subprime mortgage crisis, a softening in the labor market and lower projected revenues.
But while the news is grim for the coming fiscal year, Anglin said her office does not believe the economic slowdown will be prolonged.
“Things are slow, we’re concerned, but we do not believe there will be a recession and we do believe the economy will start to turn around, hopefully by the end of 2008,” Anglin said.
State Comptroller Thomas DiNapoli warned yesterday that while the state has thus far managed the softening economy, “there are dark economic clouds rolling in.”