Recession-weary New York is now staring down a double-barreled budget gap of almost $700 million for fiscal 1992, according to sources familiar with a budget report due for release today.

The projected gap in the almost $29 billion budget is being driven wider by an equal amount of revenue shortfalls and spending increases, the sources said yesterday.

The state's Division of the Budget is expected today to release its mid-year report for fiscal 1992, which began April 1, and has declined to comment on the state's fiscal condition until then. Today's report is not expected to include solutions to the state fiscal problems.

The report will indicate that the ravages of an incessant recession are expected to trigger a major fall-off in personal income tax collections and swell social spending, especially for Medicaid, the sources said.

On Monday, as the budget division was churning out numbers in preparing the report, Gov. Mario M. Cuomo said the gap would be "at least $500 million."

Earlier this month, state Comptroller Edward V. Regan said in a report New York's budget after six months was about $155 million out of balance, which his office said was caused mostly by increased spending. His report did not include revenue and spending projections, but was based on a cash analysis of the first half of the fiscal year. The budget division's report reviews reams of data and offers projections on the rest of the fiscal year.

To solve this year's problem, Gov. Cuomo said he would "rather not" borrow, but added such a financing has not been ruled out because his administration has not finalized a plan. The state had to borrow using deficit notes in February to close a projected budget gap before the end of fiscal 1990.

Talking to reporters after speaking at a dinner sponsored by the Securities Industry Association's New York region on Monday, Gov. Cuomo said a gap-closing plan probably would be released in a week to 10 days.

He also said he had consulted with Mayor David N. Dinkins on Monday to inform him of the state's budget problems. The Dinkins administration is preparing a revised four-year city financial plan, due in early November, and would have to adjust the plan according to the amount of state aid it would expect to receive, including Medicaid payments.

Last week, officials from Moody's Investors Service and Standard & Poor's Corp. met with state officials to discuss the state's finances.

Rating agency officials have not been inclined to favor the state plugging the gap by selling deficit notes. Moody's Standard & Poor's, and Fitch Investors Service rate the state's GO bonds A.

The note sale was discussed at the meetings, in addition to other gap-closing proposals, a budget spokeswoman said yesterday. But she added, "We weren't advocating anything.

About this time last year, the budget division projected a $824 million gap, but did not borrow to close it. Instead, a special session of the state Legislature was called and the projected gap was closed through a series of spending reductions and state employee wage deferrals.

However, in late December and early January updated budget projections estimated the gap had opened again, to over $1 billion. To resolve the problem, the state borrowed $905 million with deficit notes in February and then tapped a reserve fund for $176 million in March to cover an additional projected gap.

In March 1990, the state borrowed $775 million using notes to close a projected gap for fiscal 1989. And in June 1989, the third month of the state's fiscal 1990 year, the state borrowed $460 million using deficit notes to repay money borrowed from a fund in March to cover a budget gap in fiscal 1989.

To close a projected budget gap in fiscal 1988, the state did not enter the deficit note market, but instead borrowed $116 million from its tax stabilization reserve fund.

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