State fiscal crisis
New York just keeps lurching from one fiscal crisis to another. A new fiscal year starts today not with a budget (no real surprise there) but with drastic measures by Gov. David A. Paterson to keep the state from going into the red.
Lawmakers refused to heed Gov. Paterson's repeated calls for significant spending reductions in the last fiscal year. There is no indication of when a 2010-11 budget will be adopted. The state is facing a $9.2 billion deficit this year, yet no negotiations are happening to resolve the differences in the three budget plans from the governor, Senate and Assembly. Those plans are billions of dollars apart with different recommendations on where to cut and which new taxes to implement to cover higher costs.
The Senate has approved a "road map" for a $136.1 billion spending plan. The Assembly has its $136.8 billion package, and both are higher than Gov. Paterson's January proposal of $134 billion, compared to last year's $131 billion. The Legislature approved emergency spending sought by the governor to maintain state operations, which did not address the state's revenue problems. But now legislators are on vacation.
Facing a cash crunch, Gov. Paterson ordered a delay of $2.1 billion in school aid payments that would normally have been made on Wednesday since the state did not have sufficient revenue to pay bills and end the 2009-10 fiscal year with a balanced budget. That will put a short-term strain on school districts that had expected the funds, which are not due by law until June 1. But the governor hinted that date could slip too, saying the state intends to meet the statutory deadline "assuming sufficient cash is available at that time."
The governor's decision to hold up road construction work will immediately impact the Fort Drum connector road that has been years in the making with the support and cooperation of local, state and federal officials. A bid opening scheduled for today for the four-lane highway directly linking the post to Interstate 81 will be postponed. Just how long is unclear.
Gov. Paterson's order holds up spending on all road projects not funded by federal stimulus monies, although the federal government has committed about $1.4 million to the connector project that has already started with site work along the route.
Any delays in the timeline now cast doubt on whether Interstate 781 can be completed by the projected 2012 date. It will only perpetuate the problems the highway is meant to correct by improving safety in diverting some Fort Drum traffic from other highways. The project is expected to create up to 248 jobs. The funds have to be restored to allow this project to go forward in a timely manner.
This is the price New Yorkers are paying for the dysfunction that has characterized Albany for too long. The state cannot keep operating like this. The anxiety and uncertainty must end with a budget that will restore fiscal responsibility and address structural reforms to avert future crises.
