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 ...continue reading]]>

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.

-New York City’s outer boroughs will be getting a new area code with the amount of numbers expected to run out by 2012. People who are currently in the 718 or 347 area codes will keep their current codes.

-Several education groups have sued Governor David Paterson for the release of money to schools that he has postponed until it becomes financially feasible for the state to pay the aid. Paterson called the move necessary because the State Legislature did not cut enough of the state’s deficit to prevent a large ...continue reading]]> Here are a few stories that you might have missed this week:

-New York City’s outer boroughs will be getting a new area code with the amount of numbers expected to run out by 2012. People who are currently in the 718 or 347 area codes will keep their current codes.

-Several education groups have sued Governor David Paterson for the release of money to schools that he has postponed until it becomes financially feasible for the state to pay the aid. Paterson called the move necessary because the State Legislature did not cut enough of the state’s deficit to prevent a large debt for next year.

-Mayor Mike Bloomberg has once again reintroduced the idea of congestion pricing to help solve budget shortfalls. Of course, with the city closing down lanes all around Manhattan, it seems hardly fair to charge drivers for being stuck in traffic that the city has itself created.

-The City Council voted nearly unanimously to stop Mike Bloomberg from turning the Kingsbridge Armory into another shopping mall. Bloomberg has vowed to veto the bill which will undoubtedly get overturned anyway. Earlier in the week, the city council overturned Bloomberg’s veto of the parking grace period bill.

-After several high profile exposes, the United Homeless Organization has been ordered to shut down after it was revealed that the non-profit was nothing but a scam.

Aw, The Poor Transit Union...

It’s tough to be a state agency that is among the most financially irresponsible and then endure a nearly $400 million budget cut but that is exactly what is going on with the MTA who will now be passing its financial irresponsibility woes onto New Yorkers. Meanwhile, transit workers will get a huge 11%+ raise.

In the MTA doomsday plan which will now take effect because of budget cuts (but more so because Albany can’t do math), the MTA will begin to get rid of free student metrocards, cutting two subway lines and dozens of bus routes, ...continue reading]]>

Aw, The Poor Transit Union...

It’s tough to be a state agency that is among the most financially irresponsible and then endure a nearly $400 million budget cut but that is exactly what is going on with the MTA who will now be passing its financial irresponsibility woes onto New Yorkers. Meanwhile, transit workers will get a huge 11%+ raise.

In the MTA doomsday plan which will now take effect because of budget cuts (but more so because Albany can’t do math), the MTA will begin to get rid of free student metrocards, cutting two subway lines and dozens of bus routes, and laying off hundreds of workers.

Here is a breakdown of the MTA cuts for next year:

-replace 500,000 free student metrocards with half-fare cards

-cut the W and Z subway line while cutting the routes for the G and M lines

-cutting 52 bus routes

-get rid of door-to-door Access-A-Rides

-10% pay cut for administration

Why aren’t any workers getting pay cuts while countless New Yorkers have to find new, longer ways to get to work and paying for their children to commute to school?

Better yet, why are they getting 11.3% raises when commuters will have to start paying higher fares in 2011?!

Earlier this week, a state judge ruled that the MTA workers have to get their 11.3% raises as promised in their contract with the MTA.

So will the union make a sacrifice to help out the MTA and millions of New York commuters? Of course not.

It is going to be one fun year if you are a New York City commuter…

David Paterson

After consistently pleading with the state legislature, particularly the state senate, to cut the New York State budget by $3.2 billion to prevent an economic collapse, Governor David Paterson has taken matters into his own hands and is now withholding 10% of the aid due to government agencies and schools.

Here’s a quick rundown of what’s been going on:

Seeing the state’s deficit rise to well over $3 billion, Governor David Paterson asked the state legislature to cut the budget by $3.2 billion to prevent the same type of economic collapse that happened in California ...continue reading]]>

David Paterson

After consistently pleading with the state legislature, particularly the state senate, to cut the New York State budget by $3.2 billion to prevent an economic collapse, Governor David Paterson has taken matters into his own hands and is now withholding 10% of the aid due to government agencies and schools.

Here’s a quick rundown of what’s been going on:

Seeing the state’s deficit rise to well over $3 billion, Governor David Paterson asked the state legislature to cut the budget by $3.2 billion to prevent the same type of economic collapse that happened in California from happening in New York.

After a lot of stalling and back-room politics, the state legislature came back with a deal that would only cut the state budget by $2.7 billion. Did I mention that the state deficit is at least $500 million more than that?

Governor Paterson vowed to take action into his own hands and it appears that he is doing just that; putting his political career on the line to make tough but seemingly necessary cuts to the state budget.

To begin with, Paterson is withholding 10% of the nearly $2 billion due to schools and government agencies tomorrow.

Paterson clarified that by “withholding” the funds, he is not impounding them but delaying their release until it is financially feasible for the state to release those funds.

While education groups are preparing to sue Paterson for release of the funds, it appears that the governor has full power to do so.

Paterson continued to blame the State Senate for dragging their feet and being more concerned about their own jobs than the financial future of the state.

Say what you will about Paterson but at least the guy takes responsibility and puts his money where his mouth is.

An All Too Familiar Sight

After legislators told the MTA that they would have $143 million less to spend in 2010, it was discovered that the number would actually be $343 million thanks to a very costly error.

As the legislature began to make cuts for next year to cut the state’s massive deficit, the MTA was told that their budget would be cut by around $143 million, a lot more than the MTA had expected. Today, it was learned that the MTA would not receive as much money as once thought from the payroll tax associated with ...continue reading]]>

An All Too Familiar Sight

After legislators told the MTA that they would have $143 million less to spend in 2010, it was discovered that the number would actually be $343 million thanks to a very costly error.

As the legislature began to make cuts for next year to cut the state’s massive deficit, the MTA was told that their budget would be cut by around $143 million, a lot more than the MTA had expected. Today, it was learned that the MTA would not receive as much money as once thought from the payroll tax associated with the bailout. $200 million less, to be exact.

MTA Chief Jay Walder is said to be sticking with his original claim that the MTA will stick to the fare increase schedule that the legislature had drawn up and not raise fares until 2011. It does mean some major service cuts.

The MTA is expected to bring back that cuts that it had originally planned before the state bailout. This means that a number of bus lines will get cut, trains will run even less frequently during non-peak hours, stations and routes will be cut down, and the fares will still be raised in 2011.

Because this was such a late development (and a costly one) that really came out of nowhere, the MTA will have to go into panic mode and begin to make cuts quickly. All in all, the MTA will have $343 million less next year and $220 million less than they expected to have even after the budget cuts.

NY Gov. David Paterson

While Governor David Paterson has been pushing the legislature to cut the state budget by $3.2 billion, top Democrats have been reluctant to make the tough cuts to education and hospitals, opting to push for bigger debt in order to keep their jobs.

While the State Assembly is on board, the State Senate, particularly the Carl Krueger-led finance committee, has been reluctant to make tough, unpopular, but seemingly necessary decisions.

In response to the stalling by the Senate, Paterson has proposed an emergency bill that would allow him to make the necessary cuts, ...continue reading]]>

NY Gov. David Paterson

While Governor David Paterson has been pushing the legislature to cut the state budget by $3.2 billion, top Democrats have been reluctant to make the tough cuts to education and hospitals, opting to push for bigger debt in order to keep their jobs.

While the State Assembly is on board, the State Senate, particularly the Carl Krueger-led finance committee, has been reluctant to make tough, unpopular, but seemingly necessary decisions.

In response to the stalling by the Senate, Paterson has proposed an emergency bill that would allow him to make the necessary cuts, and thus taking the blame for the unpopular move. A pretty gutsy thing to do for an unpopular governor running for re-election.

Paterson has continually warned that further delays will hurt the state, damage its credit rating, and make the interest payments on our debt much higher and thus putting New York into an even bigger financial hole.

The Governor has also promised to keep the Senate in Albany over Thanksgiving if they do not get something done by then.

Although no budget cuts are popular, Paterson is actually coming off as the good guy in all of this because he has shown that he is willing to consistently stick his neck on the line and make the decisions that he believes to be the right ones, even if it hurts his popularity and chances of re-election.

We’ll keep you updated on the state’s budget moves as the Senate continues to debate actually doing something to keep the state from entering a California-type collapse.