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Drop in tax revenues means state is out of cash: DiNapoli

The state will probably be forced to borrow from its other funds to continue paying its bills, officials said Monday as they tallied up the last of 2009’s tax revenue.

“New York state’s cash-flow is at historically low levels,” said state Comptroller Thomas DiNapoli in a statement. “The state’s general fund may end December with a deficit, which has never happened before. Right now the state is operating on a very thin margin.”

On Dec. 30, the state had $3.85 billion in funds and paid out a little less than $3.8 billion, DiNapoli said. After taking in $772 million in state receipts, the government was left with $833 million in its general fund, he said.

In the meantime, the bills are piling up. The state paid out $3.7 billion in aid to various programs Monday as the law required, including $384.5 million in education funding and $1.3 billion for Medicaid.

It started the day with a $174 million negative balance in the general fund. The state would borrow from other funds in its Short Term Investment Pool if the tax receipts from the last two days of 2009 did not cover the nearly $1 billion in payments not yet made at the end of the day, the comptroller said.

The state faced an estimated $3.2 billion deficit for the 2009-10 fiscal year, according to the state Budget Office. After two weeks of special sessions, the state Legislature approved $2.7 billion in cuts Dec. 2.

The state also faces a $6.8 billion deficit for 2010-11, Paterson has said. On Monday, the Manhattan Institute’s Empire Center, a financial think tank, called on the governor not to issue raises to any state employees as part of a larger deficit reduction plan, estimating it would save the state $1.6 billion.

Such a move would be vigorously opposed by state workers’ unions representing professionals like teachers and police officers.

Reach reporter Jeremy Walsh by e-mail at jewalsh@cnglocal.com or by phone at 718-229-0300, Ext. 154.

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