With a budget deadline set for April 1, what did the state leaders decided to do? Go on vacation for a week.
Leaders in the State Senate and State Assembly voted on Monday, March 29 on budget extenders that will continue payments to schools and payrolls that will keep the state functioning as they left Albany for the religious holidays and will likely not return to the capital until April 7. The move ensures that a state budget will be late again for the 23rd time in the past 26 years.
“I don’t understand why we’re leaving,” Republican State Senator Frank said on Monday, March 29. Padavan said he understands the importance and respects the religious holidays, but there are intermittent days in between the holidays that the legislators could work.
However, other legislators, including many Democrats, said that a deal was not going to be completed by April 1 anyway so they want to make sure they find the best possible solutions instead of rushing into a bad deal.
“I am more concerned about making the appropriate spending cuts and not raising taxes,” said Queens State Senator Joseph Addabbo.
Currently, New York State is facing a more than $9.2 billion budget deficit, and leaders in both the Assembly and State Senate are trying to finalize cuts and revenue generators that would plug the gaping hole.
Queens State Senator Jose Peralta said the Senate and Assembly have reached a partial agreement on roughly $3.3 billion in cuts, but there are still differences on how severe cuts will have to be in terms of education and health care – the two areas that make up the majority of the budget.
Meanwhile, on Tuesday, March 31, Governor David Paterson announced that a $2.1 billion school aid payment originally planned to be made on March 31 – but not statutorily due until June 1, 2010 – will be made at a later date. The state intends to meet the June 1 statutory deadline for making this payment, assuming sufficient cash is available at that time.
“The fact that extraordinary cash-management actions such as these are necessary underscores the dire nature of our state’s fiscal circumstances,” Paterson said in a statement.
Paterson said that in December of 2009, he delayed $750 million in payments to local governments that were ultimately paid in January, but “deferring payments, however, does nothing more than delay an inevitable day of financial reckoning.”
While legislators are on recess, negotiations between leaders in both the Assembly and Senate will take place including an expected meeting between Senate Democratic Conference Leader John Sampson and Lieutenant Governor Richard Ravitch that is scheduled for March 31. Ravitch has unveiled a plan that includes borrowing in order to close the gap – something Senate Democrats had originally opposed, but could be back on the table.
“If we can’t reach the $9.2 billion then we’re going to have to seriously consider a borrowing version,” Peralta said, emphasizing that he believed the borrowing should only go to a very good cause, which in his opinion would be for education.
One item that will not be impacted by the state’s failure to pass a budget will be state income tax refunds. On April 1, the state will pay 651,851 refunds totaling about $499 million in state income tax refunds, according to Brad Maione, a spokesperson for the State’s Department of Taxation and Finance.
The refund payments were originally delayed by two weeks leading up to the expected passage of the budget.
