While Albany fiddles, New York burns through cash.
One month after the deadline for passage of the 2010-11 budget, the state’s fiscal picture looks increasingly dire. Yet Gov. David Paterson and legislative leaders appear to be no closer to agreement on a spending plan than they were on March 31.
How bad is New York’s cash crunch? State Comptroller Thomas DiNapoli reported last week that the state concluded the 2009-10 fiscal year with a general fund balance of $2.3 billion only because Mr. Paterson delayed $2.9 billion in payments.
"By pushing these payments into the new fiscal year," the comptroller said, "the state could run out of money in June."
Among the delayed payments were $500 million in personal income tax refunds-adding insult to injury for New York taxpayers.
By law, the delayed refunds and payments must be made within the first quarter of fiscal year 2010-11, so taxpayers should receive what they are owed. But it also means the state will find itself even more strapped for cash.
The state Budget Division projects the general fund will end each of the next four months with a negative balance, which "is unprecedented in New York’s history," Mr DiNapoli said.
"The state’s finances are very shaky," he added. "Big bills are piling up, and there may not be enough cash to cover them."
This is true even though the state’s economy is rebounding. The reason is that on a recurring basis, spending continues to outpace revenues.
New York needs a budget now. And it needs an honest, fiscally responsible plan, not one like last year’s, which, as Mr. DiNapoli previously reported, was littered with fund sweeps, shifts and temporary loans totaling some $6.4 billion.
That budget also contained numerous projections of spending cuts and revenue increases that did not materialize. Clearly, the state has no margin for such errors.
"We need the governor and the Legislature to agree on a realistic budget that aligns revenue with spending," the comptroller said. Did anyone in Albany hear him?