Patterico's Pontifications

12/13/2009

New York State’s Budget Crisis

Filed under: Government — DRJ @ 10:02 pm



[Guest post by DRJ]

New York State has run out of money:

“As he has threatened, Gov. David Paterson on Sunday said he is withholding $750 million in local aid that had been scheduled to go out starting Tuesday. The move was prompted by a looming shortfall for the current fiscal year that’s estimated to reach between $500 million to $1 billion.

The delays include more than $500 million in scheduled school aid payments and $112 million to cities and counties. Additionally, the governor will hold back $47 million set to go to health insurance firms that cover state employees. That change, however, should have no direct impact on those workers.

“I can’t say this enough: The state has run out of money,” Paterson said during a news conference in New York City to announce the move.”

Paterson describes this as a cash flow problem and says these are payment delays, not cuts, although they may be made permanent if the Legislature doesn’t act:

“The Legislature, under pressure from powerful teachers unions and school lobbyists, refused to cut any school aid midyear. School officials contended the midyear cuts would force layoffs and hurt instruction.

“The question is, who is going to wake up and face reality and who is going to continue sleeping on the job?” Paterson said.”

Some municipalities and local governments may have to borrow to cover short-term deficiencies. I’m not familiar with how New York financings work but in theory that won’t be good for their bond ratings.

— DRJ

UPDATE 12/16/09: Paterson’s polls aren’t great but his tough budget talk has reportedly helped his standing with New York voters.

5 Responses to “New York State’s Budget Crisis”

  1. “That change, however, should have no direct impact on those workers”.

    Well until one of them gets a toothache, stubs a toe, or you know actually needs some medical attention, anyway. The health care providers can just send the bill to “the One” right?

    *******

    Does anybody remember what actually caused the failure of the USSR?
    (breaks off into tune, Does anybody really care)?.
    Something good out of Chicago

    Well the ability to fund their activities was right at the top of the list.

    I can’t help but to wonder if there will soon be two countries known as Georgia.

    Just thinking with my fingers is all.

    TC (0b9ca4)

  2. what’s this article doing on a racism blog?

    /white smoke

    redc1c4 (fb8750)

  3. if the insurance carriers aren’t getting paid, look for them to suspend the policies involved…. i can’t see them taking on additional costs if they aren’t getting reimbursed.

    redc1c4 (fb8750)

  4. And, the countdown to CA’s insolvency continues…

    AD - RtR/OS! (cc5dea)

  5. I’ve updated the post with a poll that shows Paterson’s standing with voters improved after his tough talk on the budget crisis.

    DRJ (84a0c3)


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