New York Running Out of Money

With state revenues collapsing across the country and our governor wisely chasing out millionaires, is this any surprise?

ALBANY — New York State is running out of cash.

Without a budget deal, New York will be left with just $36 million in the bank by the end of December, according to current projections. And the money will last that long, officials say, only if the state chooses to fully exhaust its emergency reserves by tapping several billion dollars’ worth of temporary loans from its rainy-day fund and short-term investments.

For weeks, Gov. David A. Paterson has invoked the shrinking amount of available cash in an effort to provoke the Legislature to deal with the state’s $3.2 billion budget deficit. So far, the specter of such dire fiscal outcomes has been greeted with what amount to legislative shrugs, chiefly in the recalcitrant State Senate.The stalemate in Albany is familiar, of course, and there are many lawmakers and experts who predict that the Legislature will act at the 11th hour, as it has before, to avoid the worst damage.

But with no end in sight to the negotiations, state officials are beginning to reckon with what could be an unprecedented cash crisis. And many say that even if the current deficit is closed, the state is at considerable risk going forward — less able, for instance, to borrow money because of worsening credit ratings and ill prepared for far more severe deficits ahead.

At least we are not California.