Paterson Says New York's Broke, Stops Payments; Nobody Cares
Governor Paterson and his budget director warned over a week ago that we were about to go into the deep red, but the legislature continued to dick around, and now the Governor announces we will end the month with a bank balance of minus $1,000,000,000.
So Paterson has delayed state payments to schools, local governments, and various non-profits -- which may or may not be within his constitutional authority -- and will keep doing so until someone in Albany comes up with some cash....
"I will probably be sued for this," he told a no doubt astonished group of bankers today, "but I will not let New York State run out of money on my watch."
Now, experience shows that government money is more fungible than the kind you or we use, and even today Paterson "announced $25 million in homeless housing capital grants" to non-profits who will, presumably, be among those whose payments are being delayed. So maybe he expects someone to do something.
But what if they don't? It seems in Albany they're more preoccupied with the fallout from the Joe Bruno trial than will fixing the budget. Richard Ravitch sees this and complains, but we doubt the legislators who tried to keep him out of the Lieutenant Governorship will attention to him. And we know what they think of Paterson.
What has to happen before they get serious? Who'll be the first to stop accepting New York's IOUs? Photo (cc) Bob Zou.