Written by Michael Moran on September 28, 2009 – 6:51 am
Empire Center Director E.J. McMahon writes in an op-ed today in The New York Post, that New York’s budget crisis is growing worse daily and could reach the point where the state is unable to pay its bills.
McMahon writes, “The stage for this looming disaster was set by the April deal on the 2009-10 budget. Paterson and his fellow Democrats in the Legislature agreed to a noxious stew of tax and fee increases, temporary federal aid and increased spending — all in the face of a severe economic downturn whose full impact had yet to be felt in New York.
Surprise, surprise: The tax hikes have brought in lower-than-projected revenues as the economy continued to weaken. Passage of a federal health-care-reform bill could make matters worse — either by raising federal tax rates on New York’s high-income households, or by increasing the state’s Medicaid spending or some combination of both.
Meanwhile, Paterson disclosed last week that the estimate of this year’s deficit has risen from $2.1 billion to $3 billion. His budget-crunchers were already projecting some cash-flow problems under the lower number; at this rate, New York will be stiffing vendors and inviting a credit-rating downgrade by spring.
California, here we come.”