DiNapoli: State’s Cash Crunch Getting Worse
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- November
- 20
Comptroller Thomas DiNapoli is coming out with a report today will show that the state’s cash crunch is getting even worse.
DiNapoli said his office will release a report that shows New York faces a cash-flow deficit of up to $1.4 billion in late December, higher than projections from Gov. David Paterson’s budget office.
It means the state is running out of money to pay its bills, DiNapoli warned. Paterson’s office last month predicted a $1.1 billion cash-flow deficit in late December.
“The state does run the risk of running out of cash in a significant way in December,” DiNapoli told Gannett’s Albany bureau. “It really underscores the need for the governor and the Legislature to come together on a deficit-reduction plan.”
DiNapoli urged that spending cuts need to be part of the budget deal, which so far lawmakers have resisted.
Without a budget-cutting plan, state officials said New York may have to delay payments to schools and local governments or borrow to pay its bills, which would hurt the state’s credit rating and its ability to borrow money.
The state has been dipping into a fund controlled by the comptroller called a Short Term Investment Pool, which mainly invests in short-term treasury bills and allows the state to borrow from it to pay monthly bills. But even that fund faces being almost depleted by the end of the year, officials said.
“We’re on a razor’s edge when it comes to cash flow in December in terms of the resources of the Short Term Investment Pool,” said Paterson’s budget spokesman Matt Anderson.
This entry was posted
on Friday, November 20th, 2009 at 10:24 am by Joseph Spector.
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