NY State Financial Situation

Now that he is getting a closer look at the books, Gov.-elect Eliot Spitzer said yesterday that his initial reviews of the state's fiscal picture show that New York is in worse shape than he first thought."The cupboard is bare," Spitzer said. "There isn't much there that hasn't been sold, given away or spent."

While the state is projected to have a $1.1 billion surplus at the end of this year, Spitzer policy adviser Paul Francis said that money will be exhausted because outgoing Gov. George Pataki and the State Legislature spent some of next year's dollars this year.

One example was a child tax credit they agreed to in this year's budget negotiations. That alone will cost the state roughly $600 million each year.

Pataki's budget advisers project that the state will face a $2.5 billion cash deficit in the 2007 to 2008 fiscal year, but Spitzer aides say the state's long-term spending gaps could be larger."There's very little real revenue growth in the budget," Francis said. "

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