New York Running Out of Cash

From the Syracuse Post-Standard:

If Gov. David Paterson and state legislators continue to do nothing about the way they spend money, the state’s general bank account will be $1 billion short at the end of December, according to state Comptroller Thomas DiNapoli, the man who writes the checks.[…]

The state has already dipped into its short-term investment pool, or cash reserves, for $5 billion. There is not enough left to raid.

It is an option for the state to borrow money, but DiNapoli says the state has borrowed enough for cash-flow emergencies.

In fact, the state already owes $10.4 billion to bondholders for the times it borrowed money for operating expenses. That’s 18 percent of the total $57 billion in state debt.

Our own Natasha Altamirano offered this:

New York also benefits from taxes on high-income taxpayers, and their income is largely dependent upon the value of investments that fell sharply in the stock market decline, said Natasha Altamirano, spokeswoman for the national group, The Tax Foundation.

“‘Millionaire’s taxes’ are not stable sources of revenue,” Altamirano said. “When there’s a stock market problem or an economic downturn, those revenues will also plummet.”

The New York Legislature returns this week.