State of New York Playing Accounting Hide and Seek

Business Week 4/5/10
By Michael Quint

April 5 (Bloomberg) -- The state of New York’s history of budget manipulation is contributing to its chronic deficits and cash squeeze, Comptroller Thomas DiNapoli said.

“New York needs to stop playing games with the deficit,” DiNapoli said in a statement. By shifting money between accounts in a “fiscal shell game,” state officials and lawmakers “cover cash shortfalls and avoid making the difficult decisions needed to align spending with revenues,” DiNapoli said.

In the year ended March 31, the state used $6.4 billion of funds shifted and borrowed between accounts, and rolled $3 billion of payments into the current year, which began April 1, the report said. Lawmakers haven’t agreed on a plan to close a deficit of more than $9 billion this year in a $135.2 billion budget proposed by Governor David Paterson.

“We agree with much of the Comptroller’s report,” said Matt Anderson, a spokesman for the Division of Budget. “That’s why we are focused on recurring spending cuts to close deficits instead of one-time transfers,” he said. Paterson has said he wants 75 percent of the budget gap closed by reoccurring cuts that would also shrink future deficits.

New York has $54.8 billion of debt, second only to California, and plans to market $5.9 billion of bonds this year, according to budget documents.



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