New York Is Broke

Gov. David Paterson

Gov. David Paterson

For the first time in history, New York State is not just broke but in debt. To paraphrase a line by Louis C.K., if being broke is having no money then New York would have to raise hundreds of millions of dollars just to be broke.

According to the New York Times, the state has a negative balance of $174 million in its general fund (yes, states have bank accounts too) with over a billion dollars due on its bills.

The state will now have to burn an even deeper hole in their account by using up the $800 million from their “checking account” in what is basically just the state overdrafting their account.

According to State Comptroller Thomas DiNapoli, New York State is now living paycheck to paycheck. “The state is starting the new year by scrambling to make payments and juggle money,” said DiNapoli.

Governor David Paterson has been prioritizing and holding off on paying the bills as anyone who has been in debt has seen but unlike people, the state has bills that it has no option but to pay.

Because of devastating to the economy it would be for a state to bounce a check, the law mandates that states have to balance their budgets. In the past, states were required to balance the budget by the end of the year but new laws allow the budget to stay in deficit until the end of the fiscal year which ends in March.

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