Tags: ny | ny | state | budget

N.Y. Governor Directs Cut in State Aid Payments

Wednesday, 09 Dec 2009 11:36 PM


  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

ALBANY, N.Y. -- Gov. David Paterson said Wednesday that New York has run out of cash and he's directing budget officials to reduce state aid payments to schools, local governments and nonprofit service providers until things improve.

Speaking at the Museum of American Finance in Manhattan, Paterson said he'll probably get sued, but he won't let the state run out of money on his watch.

"I am directing the Division of the Budget to limit payments so that we will have the cash to pay our debts at the end of December," Paterson said. "I will continue to withhold payments until this economy is leveled off."

Special: Get Sarah Palin’s New Book – Incredible FREE Offer -- Click Here Now.

"Now New York has run out of cash," he said. "You can't spend money that you don't have."

Budget Director Robert Megna said the state faces a shortfall of more than $1 billion in the general fund at the end of December, which would be a first for New York.

Other state funds can be tapped to help close that gap, Megna said, but even using all $1.2 billion of rainy day reserves and delaying a pension fund payment will leave the margin "razor thin."

Rather than risking some setback that would force hasty cuts, Megna said the administration is cutting spending in an orderly fashion. The Budget Division plans to detail temporary cuts this week, he said.

In his executive budget proposal next year, Paterson could propose making them permanent.

"We've had a revenue collapse over the last 24 to 36 month period," Megna said. "The state's cash position is at its weakest point in recent history."

Last week, after lawmakers agreed to cuts of about $2.8 billion, Paterson said it wouldn't be enough. He warned then of reduced and delayed payments, targeting school aid and funding to hospitals.

Timothy Kremer, executive director of the New York State School Boards Association, said they've asked their roughly 700 members to assess the impact if approximately $300 million in school aid is delayed or permanently cut, which Paterson had proposed in November. Lawmakers rejected the cut, which would be a roughly 1.5 percent reduction across the board.

"We think it's inappropriate and likely illegal for him to unilaterally act in that way," Kremer said. Several organizations, including his association, may seek a court order to block it, he said.

Stephen Acquario, executive director of the New York State Association of Counties, said their reimbursements for providing state-mandated services like public health, mental hygiene and other programs are already lagging by months and in some cases a year or more. "Many counties don't have the available fund balance to cover the state's bills," he said.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Rep. Mike Kelly Offers Obama 'Lump of Coal for Christmas'

Saturday, 20 Dec 2014 07:50 AM

All forms of energy in the United States should be developed to spur job creation and economic growth, Pennsylvania Repu . . .

Politico: Obama May Give Dems 80 Percent of 2016 Latino Vote

Friday, 19 Dec 2014 19:18 PM

President Barack Obama may be on track to helping deliver as much as 80 percent of Latino voters to the 2016 Democratic  . . .

Obama Appointee's Group Accused of Illegal Politicking

Friday, 19 Dec 2014 19:09 PM

A nonprofit group run by an Obama administration appointee may have supported Democratic mayoral candidates in Californi . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved