Panel Warns High Uncertainty for New York Revenue Forecast as Federal Policy Risks Loom

Blake Washington, director of the New York State Division of Budget, and legislative budget leaders met with outside economists on Feb. 1 for the annual economic and revenue consensus forecasting session and emphasized a shared goal of producing an on‑time budget while warning that revenue projections face unusually large uncertainty.

"We are all committed to meeting the state's statutory, March 1 deadline for a consensus revenue agreement," Washington said, opening the meeting and framing the forecasts as an input to a timely budget. The Division of Budget (DOB) reported that New York tax receipts strengthened in 2024 but that the department expects growth to moderate in fiscal 2026 as employment and income growth cool.

Why it matters: New York's budget planning relies on an accurate consensus forecast; panelists said this year's forecasts carry unusually wide error bands. Panelists flagged several federal policy actions — possible large federal spending cuts, proposed tariffs on trade partners and stricter immigration and deportation policies — that could materially reduce federal funding to the state and slow economic activity, putting pressure on revenue and services funded by Medicaid, education and public safety.

Experts' reading of the data

Professor Kajal Lahiri of the State University of New York described a high‑frequency, mixed‑data forecasting model his team developed to estimate year‑over‑year tax growth. He…