Over 20 Pounds of Narcotics and a Gun Seized in the Bronx

 

Glassine Envelopes of Heroin/Fentanyl Branded “Playboy” and “Tesla”

An undercover investigation that began with a large cocaine sale resulted in the seizure of a gun and nearly 25 pounds of narcotics, including what appeared to be heroin/fentanyl and oxycodone pills, as well as methamphetamine. CARLOS TORRES and a second individual were arrested on Friday, July 12, 2024, and arraigned in Manhattan Criminal Court over the weekend. Members of the New York Organized Crime Drug Enforcement Strike Force uncovered the large cache of narcotics in a basement apartment in the Parkchester neighborhood of the Bronx. 

A criminal complaint filed by the Office of the Special Narcotics Prosecutor charges TORRES with Criminal Possession of a Controlled Substance in the First and Third Degrees, Criminal Sale of a Controlled Substance in the First Degree, Criminal Possession of a Weapon in the Second, Third and Fourth Degrees, Criminal Possession of a Firearm, and Criminally Using Drug Paraphernalia in the Second Degree. The second individual, MARTIN FIGUEROA, is charged with Criminal Sale of a Controlled Substance in the First Degree. 

Bridget G. Brennan, New York City’s Special Narcotics Prosecutor, Frank A. Tarentino III, Special Agent in Charge of the U.S. Drug Enforcement Administration’s (DEA) New York Division (NY), New York City Police Commissioner Edward A. Caban, and New York State Police Superintendent Steven G. James announced the arrests following an arraignment in Manhattan Criminal Court. 

Special Narcotics Prosecutor Bridget Brennan said, “These arrests illustrate dangerous trends. Drug traffickers are simultaneously peddling many different dangerous substances, sometimes interchangeably, and buyers have no way of knowing what they are getting. The ‘Playboy’ and ‘Tesla’ stamps demonstrate another disturbing practice - attractive labels disguising potentially deadly substances.” 

DEA New York Division Special Agent in Charge Frank Tarentino said, “These arrests are a result of an undercover operation the DEA New York conducted with our law enforcement partners. I commend the quick action of our team in the removal of over 20 pounds of illicit narcotics and a gun off our streets. Anytime a firearm is recovered during an operation, it is a stark reminder of the dangers we face when targeting these organizations.” 

NYPD Commissioner Edward A. Caban said, “Disrupting this packaging and distribution operation in the Bronx prevented deadly narcotics from reaching the streets and neighborhoods of New York City and, without a doubt, saved lives. Stopping the flow of illegal drugs into our communities remains one 2 of the top priorities of NYPD investigators and our invaluable law enforcement partners, and this fight will continue every day until all New Yorkers are safe.” 

New York State Police Superintendent Steven G. James said, “The arrests in this case are part of a continuing strategy and collaboration between law enforcement agencies to disrupt the flow of dangerous narcotics in New York City and surrounding communities. I appreciate the work of our members and our strike force partners in this case. We have absolutely zero tolerance for this kind of illegal activity.” 

The investigation was conducted by Strike Force Group Z-43, comprised of agents and officers from DEA New York Division, the New York City Police Department (NYPD) and the New York State Police.

As alleged in the complaint, over the past week TORRES engaged in narcotics-related conversations with an undercover officer to arrange the sale of two kilograms (over four pounds) of cocaine. On July 11, 2024, at approximately 5 p.m., the undercover was at the agreed upon meeting place, 1460 St. Lawrence Avenue in the Bronx, and saw FIGUEROA on the roof of an adjacent garage. FIGUEROA allegedly threw a black bag to TORRES, who was standing in the outdoor yard of 1460 St. Lawrence Avenue. TORRES then allegedly met with the undercover in a vehicle. 

Members of Strike Force Group Z-43 subsequently apprehended TORRES and FIGUEROA in the yard and recovered the black bag containing two kilograms of cocaine. The investigation led agents and officers to the basement of 1460 St. Lawrence Avenue, where they allegedly recovered a 9mm pistol with an extended magazine and quantities of cocaine from an open box, and additional quantities of cocaine from a bathroom. 

Agents and officers obtained a court authorized search warrant for the basement apartment at 1460 St. Lawrence Avenue. A bag in a hallway in the apartment contained approximately seven kilograms (nearly 15 pounds) of suspected heroin/fentanyl, some of which was packaged in glassines bearing the brand names “Playboy” and “Tesla.” Additional kilograms of what appeared to be cocaine and methamphetamine were found in the hallway and in the ceiling. A bag of oxycodone pills was recovered from a filing cabinet in the living room. The apartment also contained equipment and materials used in packaging heroin/fentanyl, including scales, glassine envelopes and razor blades. 

The results of DEA laboratory analysis on the seized drugs are pending. The arraigning judge in Manhattan Criminal Court set bail for TORRES at $750,000 cash or bond. FIGUEROA was released on his own recognizance. 

Special Narcotics Prosecutor Bridget Brennan thanked Bronx District Attorney Darcel D. Clark, and commended SNP’s Special Trial Division, DEA New York Division, the New York Organized Crime Drug Enforcement Strike Force, the New York City Police Department, and the New York State Police for their work on the investigation. 

Defendant Charges:

Carlos Torres Bronx, NY Age: 56 CPCS 1st – 2 cts, CSCS 1st – 1 ct, CPCS 3rd – 1 ct, CPW 2nd – 1 ct, CPW 3rd – 2 cts, Criminal Possession of a Firearm – 1 ct, Criminally Using Drug Paraphernalia 2nd – 2 cts, CPW 4th – 1 ct. 

Martin Figueroa Stamford, CT Age: 66 CSCS 1st – 1 ct 

The charges and allegations are merely accusations, and the defendants are presumed innocent until proven guilty.

Governor Hochul Provides Update on Global Computer System Outage

“We continue to address the IT outage of Windows computers affected by a third-party software tool that impacted systems and services worldwide. New York State has 24x7x365 cyber, technology, and emergency response staff that identified and began working on this issue in the early hours of Friday morning. Thousands of staff across dozens of agencies are working around the clock throughout the weekend to continue to remediate systems.

“We have made significant progress in restoring systems in collaboration with state and local government partners and the third-party provider. Critical life safety services, including 911 remain operational, and New Yorkers should continue to call 911. I have also directed that forbearance be granted for those that were unable to conduct business with the state due to the outage, such as individuals needing DMV license renewals.

“I am grateful to all of the staff who deployed quickly when this issue occurred and have continued working around the clock to fix systems across the state. I remain in close contact with our cyber, IT, and emergency response teams, and can assure New Yorkers that we are doing all we can to quickly restore services.” 

AG James and Mayor Adams Cancel Press Conference at Jacobi Hospital to Announce Opioid Money for the Bronx

 

As she has been doing statewide New York State Attorney General Letitia James has been going to each of the sixty-two counties in the state dropping off checks from the Billion Dollar Opioid settlement with Big Pharma. A press conference was called for Friday morning at Jacobi Hospital where AG James was to present the hospital with a check for fifty million dollars as the Bronx Share of the Opioid settlement. 

Since Mayor Adams was coming to Jacobi Hospital, Councilwoman Kristy Marmorato called for a protest against the proposed Just Home project at the hospital to house fifty current incarcerated people from the Rikers Island Infirmary at Building #2 on the Jacobi Campus free to go wherever they want with just a security guard at the front desk in the middle of a thriving residential area. The reason for the protest Councilwoman Marmorato said was that the Health and Hospitals Corporation has lied to people of her District by saying that incarcerated people with only Stage Four Cancer would be placed at the Jacobi building. She continued that the criteria has changed since the HHC first told the community, and that HHC has now said other people could wind up at Jacobi. Apparently wanting to avoid the protest the AG and Mayor canceled the press conference. 

Close to fifty people came to protest the Just Home project for Jacobi Hospital with less than a twenty- four hour notice.

Hospital and 49th Precinct police were on hand to control the crowd, and a Parks Enforcement officer on horseback doing patrol on Pelham Parkway stopped by. 

Former Community Board 11 Chair and President of th eVan Nest Neighborhood Alliance Bernedette Ferrara speaks against the Just Home Project, which Community Board 11 voted against. 

Former District Leader Irene Estrada voices her opposition to the Just Home Project, and why it is bad for the community. 

Veteran and former police officer Sammy Ravelo says there are better options that the community needs that are better for Building #2 than the Just Home project.

Ossining Man Arrested For Threatening To Kill USPS Employees And Burn Down U.S. Post Offices

 

Damian Williams, the United States Attorney for the Southern District of New York, and Daniel B. Brubaker, the Inspector in Charge of the New York Division of the U.S. Postal Inspection Service (“USPIS”), announced that ANTHONY ALFANO was arrested after he made a series of graphic and violent threats to kill U.S. Postal Service (“USPS”) employees and burn down U.S. post offices in Ossining, New York.  ALFANO was arrested in Yorktown Heights, New York, this morning and is expected to appear this afternoon in White Plains federal court before U.S. Magistrate Judge Victoria Reznik. 

U.S. Attorney Damian Williams said: “The charges against the defendant underscore this Office’s unwavering commitment to swiftly collaborate with our law enforcement partners to neutralize threats against the U.S. mail system.  Any individual who dares to cross the line and threaten our postal employees and facilities with violence and destruction will be stopped in their tracks, and we will ensure they are held accountable for their actions.” 

USPIS Inspector in Charge Daniel B. Brubaker said: “The U.S. Postal Inspection Service does not take lightly any threats of violence against USPS employees.  This behavior will never be tolerated, and we will work with our local and federal law enforcement partners to maintain a safe working environment for the postal employees we protect.  That is our mission, and that is our unwavering commitment to the people we serve.”

As alleged in the Complaint:[1]

On Saturday, June 22, 2024, ANTHONY ALFANO was awaiting the delivery of a parcel that had been mailed out via USPS from Florida the evening before.  According to ALFANO, the parcel contained cremated remains.  In a series of phone calls with USPS call center representatives before the package was scheduled to arrive, ALFANO threatened to kill USPS employees and burn down U.S. post offices because he apparently believed the parcel was not going to arrive when he wanted it to.  ALFANO’s threats included the following:

• ALFANO threatened, “I am gonna start killing you guys one by one.”  He also said, “people are going to die,” and that there would be “a lot of dead bodies,” “hurt people,” and people who would “not be returning home.”  ALFANO also swore to kill his local mail carrier, stating that he would “walk up to him” and “blow his brains out.”  Referencing a notorious “massacre,” ALFANO warned that it would not “have shit on what I’m about to do” and that his actions would go down “in history.”

• ALFANO also made threats to kill members of the postal police by using incendiary ammunition, as well as threats to burn down U.S. post offices.  For example, he welcomed the arrival of the postal police and said, “as soon as they show up at my door they’re gonna catch a hot one,” referring to shooting them with a “napalm round” from his 12-gauge shotgun.  “I’m going to kill every one of those motherfuckers,” he said.  He further threatened, “I’m gonna burn all the post offices down to the ground” and said he would go to his local post office and “burn it down to the fucking ground.”

Underscoring his commitment to carry out his threats, ALFANO said several times, “I don’t make threats, I make promises.”  He also expressly swore to carry out his threats and said, “I really don’t care if I go to jail or not.”

On Monday, June 24, 2024, ALFANO received his parcel on the next business day after it had been mailed out on the Friday before.

ALFANO has a history of encounters with law enforcement because of prior threats he has made against others, including local police officers, delivery persons, and customer service representatives.

ANTHONY ALFANO, 46, of Ossining, New York, is charged with threatening interstate communications, which carries a maximum sentence of five years in prison, and willfully making a threat involving fire, which carries a maximum sentence of 10 years in prison.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of the USPIS in investigating the threats charged in the Complaint and undertaking security measures to protect USPS employees and facilities.  Mr. Williams also thanked the Village of Ossining Police Department and City of Peekskill Police Department for their assistance in this case.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Reyhan Watson is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Alabama Man Pleads Guilty to Violating Iran Sanctions

 

Ray Hunt, also known as Abdolrahman Hantoosh, Rahman Hantoosh and Rahman Natooshas, 70, of Owens Cross Roads, Alabama, pleaded guilty to conspiracy to export U.S.-origin goods to the Islamic Republic of Iran in violation of trade sanctions.

According to court documents, in May 2014, Hunt registered Vega Tools LLC with the Alabama Secretary of State, listing the nature of the business as “the purchase/resale of equipment for the energy sector.” He operated Vega Tools, including purchasing, receiving and shipping U.S.-origin goods, from locations in Madison County, Alabama. Beginning at least as early as 2015, Hunt conspired with two Iranian companies located in Tehran, Iran, to illegally export U.S.-manufactured industrial equipment for use in Iran’s oil, gas and petrochemical industries.

Hunt engaged in a series of deceptive practices to avoid detection by U.S. authorities, including using third-party transshipment companies in Turkey and the United Arab Emirates (UAE) and routing payments through UAE banks, as well as lying to shipping companies about the value of his exports to prevent the filing of electronic export information to U.S. authorities. Hunt lied to suppliers and shippers by claiming the items he purchased on behalf of the Iranian co-conspirators were destined for end users in Turkey and UAE, while knowing the exports were ultimately destined for Iran. Hunt lied also to U.S. Customs and Border Patrol officers regarding the nature and existence of his business when questioned upon his return from a March 2020 trip to Iran.   

Hunt pleaded guilty to a conspiracy charge and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Prim F. Escalona for the Northern District of Alabama, Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod and Executive Assistant Director Robert Wells of the FBI National Security Branch made the announcement.

The Department of Commerce Bureau of Industry and Security is investigating the case with valuable assistance provided by the FBI. 

Assistant U.S. Attorneys Jonathan “Jack” Harrington, Jonathan Cross and Henry Cornelius for the Northern District of Alabama and Trial Attorneys Emma Ellenrieder and Adam Barry of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

Attorney General James Announces New Protections Against Deed Theft

 

New Law Taking Effect Makes Deed Theft a Crime, Expands AG’s Authority to Prosecute Deed Theft

New York Attorney General Letitia James reminded New Yorkers that a new law establishing deed theft as a crime and expanding the Office of the Attorney General’s (OAG) ability to prosecute deed theft has gone into effect. The legislation, which was co-authored by Attorney General James and sponsored by State Senator Zellnor Myrie and Assemblymember Landon C. Dais, establishes deed theft as a crime, amends the statute of limitations to give homeowners and prosecutors more time to seek justice, and grants OAG original criminal jurisdiction to prosecute deed theft. This is Attorney General James’ latest effort to protect New Yorkers from deed theft, a criminal scam that robs New York families of their homes and livelihoods. Last year, Attorney General James championed legislation sponsored by State Senator Brian Kavanagh and Assemblymember Helene Weinstein to enhance civil deed theft protections by empowering the Attorney General and local district attorneys to pause related eviction and ownership dispute proceedings and expand the list of crimes that allow prosecutors to invalidate fraudulent sale and loan documents, among other measures. That law went into effect in December 2023. 

New Yorkers who believe they are a victim of deed theft are encouraged to contact OAG by calling 1(800) 771-7755, emailing deedtheft@ag.ny.gov, or filing a confidential complaint.  

“Deed theft is a merciless crime that robs New Yorkers of their homes, communities, and financial stability,” said Attorney General James. “By making deed theft the crime we know it to be, this law gives my office and district attorneys more power to stop these scammers from taking advantage of hardworking people. I thank State Senator Myrie and Assemblymember Dais for cosponsoring this legislation. These critical reforms will help us keep New York families where they belong: in their homes.”

Deed theft occurs when someone takes the title, or deed, to another person’s home without the homeowner’s knowledge or approval. It disproportionately impacts elderly homeowners and homeowners of color, especially New Yorkers in gentrifying neighborhoods who live in homes that have significantly increased in value over the years. 

Under previous law in New York state, deed theft itself was not a crime. This law amends penal law to make deed theft a form of grand larceny, extends the statute of limitations to allow for more time to identify and investigate cases, and grants OAG the original criminal jurisdiction to prosecute deed theft crimes alongside district attorneys statewide. These new criminal provisions will increase enforcement opportunities and help keep New Yorkers in their homes. Attorney General James’ new law:

• Establish Deed Theft as a Crime: Under this new law, deed theft is now legally considered grand larceny, and can be prosecuted as such. 
  • Grand Larceny in the First Degree, a Class B Felony applies to deed theft of a residential real property that is occupied as a home by at least one person and is a home that is owned by someone who is elderly, incapacitated, or physically disabled, or deed theft of three or more residential real properties, regardless of monetary value. 
  • Grand Larceny in the Second Degree, a Class C Felony applies to deed theft of one residential property, one commercial mixed-use property with at least one residential unit, or two or more commercial properties, regardless of monetary value. 
  • Grand Larceny in the Third Degree, a Class D Felony applies to deed theft of one commercial real property, regardless of monetary value.
     
• Extend the Statute of Limitations: This new law changes the statute of limitations to prosecute deed theft crimes so that prosecution must begin within five years of the theft or within two years after the rightful homeowner realizes their deed has been stolen, whichever occurs later.
   
• Grant OAG Original Criminal Jurisdiction: This new law grants OAG concurrent original jurisdiction to prosecute deed theft crimes alongside district attorneys throughout the state. 

Last year, the state legislature passed Attorney General James’ legislation co-sponsored by State Senator Kavanagh and Assemblymember Weinstein, reforming New York’s civil laws to give New Yorkers more tools to protect their homes and stop deed theft. Previously, there were very few legal remedies available to homeowners and prosecutors once a scammer had obtained the deed to someone’s home. Under Attorney General James’ law, prosecutors can now file a legal action on properties where deed theft has taken place or is suspected, which acts as a “red flag” warning banks and insurance companies of potential scams and voiding good faith purchaser protections. The law also makes it possible to keep New Yorkers in their homes and stay an eviction proceeding in housing court when the rightful homeowner can show evidence that there is a potential deed theft in progress. The law also expanded the protections of the Homeowner Equity Theft Prevention Act (HEPTA) to allow homeowners with active utility liens the opportunity to cancel any contract to sell their property.

The new criminal reforms taking effect today and the civil reforms passed last year will help New Yorkers stay in their homes. Under these new laws, homeowners will have stronger protections against deed theft, law enforcement will have new tools to prosecute deed thieves, and scammers will be deterred from stealing homes.

This is the latest action Attorney General James has taken to combat deed theft. In July 2024, Attorney General James announced the conviction and sentencing of Marcus Wilcher, the leader of a Queens deed theft ring that sold three homes without the knowledge of the rightful property owners and pocketed over $1 million. In June 2023, Attorney General James applauded the passage of her legislation, cosponsored by State Senator Brian Kavanagh and Assemblymember Helene Weinstein, that reformed New York’s civil laws to provide more tools to prevent deed theft. In July 2023, Attorney General James announced the indictment of a Long Island man for deed theft for allegedly stealing two homes in Harlem which had a combined estimated value of more than $4.7 million during the relevant times of possession. In February 2021, Attorney General James announced an $800,000 grant, funded by Office of the Attorney General (OAG) settlements, to the New York City Department of Housing Preservation and Development and the Center for New York City Neighborhoods as part of a program aimed at increasing awareness of deed theft in vulnerable neighborhoods. In January 2020, Attorney General James launched the Protect Our Homes initiative and announced the formation of an interagency law enforcement task force to respond to Deed Theft and other real estate fraud.  

New Yorkers who believe they are a victim of deed theft are encouraged to contact OAG by calling 1 (800) 771-7755, emailing deedtheft@ag.ny.gov, or filing a confidential complaint.  

Governor Hochul Announces $3.5 Million in Stolen Vehicles Recovered for New Yorkers in First Six Months of the Year

 

DMV Recovered 120 Stolen Vehicles and 31 Stolen Auto Parts So Far in 2024

Effort Builds on Governor’s Comprehensive Auto Theft Reduction Strategy

During Vehicle Theft Prevention Month, Governor Offers Tips To Prevent Vehicle Thefts and Help Consumers Avoid Buying Stolen Vehicles

Governor Kathy Hochul announced during Vehicle Theft Prevention Month that as of June 30 of this year, the New York State Department of Motor Vehicles has recovered 120 stolen vehicles worth $3.5 million. That is an increase from the 112 vehicles worth $3 million recovered during the same timeframe in 2023. In addition, DMV has recovered 31 stolen auto parts this year worth more than $58,000. As vehicle thefts become more common across the country, New York is stepping up its efforts to protect innocent New Yorkers from these costly crimes.

“As cars and repairs get more expensive, auto theft is becoming a bigger problem, but our Administration is taking aggressive action to protect New Yorkers and their property,” Governor Hochul said. “Not just this month, but all year long, we are working hard to prevent these crimes and provide New Yorkers with the knowledge necessary to safeguard themselves.”

State Actions to Prevent Thefts

In response to the dramatic rise in vehicle thefts, in September 2023 Governor Hochul initiated a five-point plan called the Comprehensive Auto-Theft Reduction Strategy (CARS). As part of the plan, New York State Police increased patrols in high theft areas, the State also launched a new vehicle theft prevention website to provide resources and education that will help New Yorkers take their own measures to prevent auto theft.

The Governor and the Department of Motor Vehicles (DMV) sent a letter to each New Yorker who owns a Kia or Hyundai to inform them of a spike in thefts of their vehicle make and model and advised them of tools available free of charge to help prevent their car from being stolen. The Governor also sent a letter to each regional Auto Dealers Association urging them to prioritize repairs that can help protect vulnerable Kia and Hyundai models.

Tips to Protect Against Thefts

All vehicle owners can take simple steps to protect your vehicle from being stolen or from unknowingly buying a stolen vehicle including:

• Check the VIN before buying a used vehicle to make sure it was not flooded or stolen.
• Look for odometer discrepancies.
• Be wary of buying a vehicle locally with out-of-state titles or a car being sold with a NY title that has out-of-state inspections stickers, plates or temporary paper plates.
• Never leave your key fob in the vehicle.
• Close and lock all windows and doors when you park.
• Park in well-lit areas if possible.
• Never leave valuables in your vehicle, especially if they can be seen.

How to Report a Stolen Vehicle

If your vehicle is stolen, report it to the police and your auto insurance company as soon as possible. The police will enter the information about your stolen vehicle into national and state auto theft computer records. The theft will be noted on your vehicle title record to help prevent someone from selling the vehicle or applying for a title.

Also ask the police to complete a 'Report of Lost or Stolen Motor Vehicle Items' form (MV-78B) for your stolen plates, which you must submit to the DMV. If only your license plates are stolen, you must still submit the MV-78B form to the DMV along with your vehicle registration.

Additional Resources

You can find additional information on stolen and recovered vehicles and Insurance Lapses on Stolen Vehicles on the DMV website.

The DMV also offers additional tips to protect yourself when buying a vehicle.

NYS Office of the Comptroller DiNapoli Releases Report on SFY 2024-25 Financial Plan

 

Period of Relative Fiscal Stability Provides Opportunity to Tackle State's Structural Budget Challenges

New York’s financial outlook is in a relatively stable position, but continues to have a structural budget deficit, with a cumulative three-year budget gap of $13.9 billion forecasted by the Division of the Budget (DOB), according to a report by State Comptroller Thomas P. DiNapoli on the State Fiscal Year (SFY) 2024-25 Enacted Budget Financial Plan. DiNapoli says action is needed to align projected state spending with revenues and address factors that challenge the state’s finances, economic competitiveness, and ability to offer services effectively over the long term.

“The current economic expansion enabled the state to close the prior fiscal year in a stronger financial position than the Division of the Budget anticipated, reduced outyear budget gaps and allowed for increasing rainy day reserves,” DiNapoli said. “But the structural imbalance in the state’s finances remains. With the state in a relatively stable position, now is the time to be strategic in managing the budget to better prepare for upcoming fiscal challenges and ensure long-term success.”

According to DOB, All Funds disbursements in SFY 2024-25 are projected to total $239.2 billion, compared to $236.7 billion in All Funds receipts. DOB projects growth in disbursements will far exceed growth in revenues over the course of the Financial Plan, ending in SFY 2027-28. Compared to SFY 2023-24, State Operating Funds spending is estimated to increase by more than 18.8%, compared to a projected increase in State Operating Fund revenues of 4.2%, through SFY 2027-28.

Spending Pressures Pose Risk to Budget Gaps

While DOB’s projected decrease in the three-year cumulative budget gap, from $20.1 billion to $13.9 billion, is an improvement, gaps could widen if state spending increases beyond DOB’s projections or economic conditions weaken. A slowdown in the economy will likely lead to an increase in demand for government services, putting further pressure upon the estimated budget gaps. 

Spending in recent years has been driven by school aid and Medicaid; the two are forecasted to account for over 50% of all General Fund disbursements in SFY 2024-25, and the share is projected to grow to 52.3% by SFY 2027-28. State-share Medicaid is projected to grow more than 24.2% from SFY 2023-24 to SFY 2027-28.  

Resources to Address Budget Gaps

DiNapoli commended the planned $1.5 billion deposit to the Rainy Day Reserve Fund in the SFY 2024-25 Financial Plan. If acted upon, that deposit would bring the total of the state’s statutory rainy day reserve funds to nearly $7.8 billion, less than 6% of State Operating Funds spending in the current year.

The Financial Plan indicates an additional $13.8 billion in informal reserves are designated for “economic uncertainties,” but these reserves are subject to administrative use by the Executive and are not governed by statutory requirements for their use or repayment. While this increases the flexibility in using these reserve funds, such flexibility also reduces the likelihood that the funds will be available for truly pressing economic circumstances or other emergencies.

Economics and Revenue

DOB’s forecast was revised from March to reflect higher economic and employment growth in 2024. For 2025, DOB now projects stronger employment gains both nationally and in New York. The state had regained all the jobs lost in March and April 2020 in April of this year. For the current fiscal year, DOB is projecting a somewhat stronger economy for New York, with both wages and personal income forecasted to accelerate from their previous fiscal year levels. However, employment is projected to slow.

For the remainder of the Financial Plan period, DOB forecasts an $11.3 billion (10.2%) increase in All Funds tax collections from SFY 2024-25, which is largely expected to occur from SFY 2026-27 to SFY 2027-28. Major provisions of federal and state tax law are scheduled to sunset during the Financial Plan period, which may influence projected collections, including the expiration of temporary tax rate increases under the state corporate franchise tax and PIT on Dec. 31, 2026, and Dec. 31, 2027, respectively. At the federal level, the scheduled expiration of the Tax Cuts and Jobs Act at the end of 2025 may impact the realization of nonwage income (such as capital gains).

Principles to Improve the State’s Fiscal Outlook

DiNapoli’s report outlined six principles to improve the state’s fiscal outlook:

• Ensure the competitiveness of state tax policy. With a tax burden among the highest in the nation, New York policymakers will need to carefully evaluate the combined impact of looming federal and state decisions to ensure the state’s tax revenue are both adequate for long-term fiscal stability and reasonable to ensure economic competitiveness.
• Increase transparency and use of data in budgeting. Better information is needed on several areas of the budget, most notably Medicaid, to help understand cost drivers. Policymakers and other stakeholders should be able to access key performance data on the state’s essential programs and services and to understand how financial plan decisions may alter that performance.
• Address spending pressures in school aid and Medicaid programs. Placing these two programs on a sustainable fiscal path without compromising outcomes requires a bold roadmap and stakeholder engagement and commitment.
• Use one-time resources for the greatest long-term benefit. Relying on one-time resources for recurring spending worsens the state’s structural imbalance. Priority should be placed on directing one-time resources for purposes that would help improve long-term finances, such as retiring debt or bolstering the rainy day reserves.
• Strengthen rainy day reserves and Retiree Health Benefit Trust Fund. Make routine, monthly reserve fund deposits as economic and financial conditions allow, rather than leaving them to the Executive’s discretion, and adhere to a schedule of deposits to help grow the Retiree Health Benefit Trust Fund.
• Reform debt practices. The state’s excessive reliance on “backdoor” borrowing by public authorities continues, as total state-supported debt outstanding is projected to grow 65% from SFY 2023-24 to SFY 2028-29. DiNapoli has recommended establishing comprehensive and binding constitutional debt limits to enhance transparency, accountability and affordability. Debt practices should be examined so capacity is maintained for capital improvement projects critical to New York’s infrastructure and economic well-being.

Report

State Fiscal Year 2024-25 Enacted Budget Financial Plan

Related Reports

Enacted Budget Report: State Fiscal Year 2024-25

A Roadmap for State Debt Reform