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Bag of tricks

Here’s a shocker: New York plays games with its budget numbers.

That’s the message delivered in a new report by state Comptroller Thomas DiNapoli. The fact that no New Yorker should be surprised by this statement does not diminish the value of his analysis.

Indeed, the report ought to be required reading, because it reveals how deeply the state has dug into its bag of budgetary tricks over many years.

The bottom line? Actually, when it comes to the state’s budget deficit, it’s almost impossible to say what that might be because the numbers have been shuffled so many times and in so many ways. But it’s probably safe to assume that the number is larger than the current estimate of more than $9 billion.

"The state dips into dedicated funds here and shifts money over there, all to cover cash shortfalls and avoid making the difficult decisions needed to align spending with revenues," Mr. DiNapoli said. "The end result is the state’s real fiscal condition is impossible to pin down. Every time the game is played, taxpayers lose."

How much money are we talking about? The comptroller’s report says the state in 2009-10 used "fund sweeps, shifts and temporary loans" totaling roughly $6.4 billion and slid nearly $3 billion in delayed payments into the next fiscal year.

Here are a couple of examples of how it’s done:

  • The Dedicated Highway and Bridge Trust Fund has been used to cover state operating costs. "It has been siphoned so many times it’s nearly bankrupt," notes the report, adding that "only $11.6 billion (34.9 percent) of the total amount of the fund has been spent to improve New York’s roads and bridges."
  • The state often borrows from its Short Term Investment Pool to cover temporary cash shortfalls and cover up permanent structural deficits. For the past decade, the comptroller points out, the state has wrapped up the fiscal year "with an average of $1.4 billion in outstanding temporary loans."

We all know the state faces a long journey to achieve a truly balanced budget. This is where it should begin: honesty.

4/9/10 (c) 2010 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.


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