Thursday, April 7, 2011

NY Continues if Fed Gov't Stops

Comptroller Tom DiNapoli has released a report on the ramifications to New York if the federal government fails to implement a continuing resolution by Friday at midnight. "A federal shutdown would be disruptive in the short term and damaging in the long term," he concludes.
His report notes that 126,500 full and part-time employees of the federal government who work in New York could be subject to furloughs, although a small percentage of that number are likely to remain on the job because they hold "essential" positions.
On the state level, though, New York relies on $687 million in federal funds to pay its employees.
Definitely impacted will be the state's 22 national parks, which would close on Saturday if there isn't a compromise. At the Saratoga Battlefield this will mean about 20 employees are put on leave. Regarding these 22 parks, the comptroller highlighted the fact that they generated $340 million in economic activity from non-local visitors in 2009.
Dinapoli warns that cash flow challenges in the state as the result of delayed or non-existent federal funds could result in delayed payments to contractors, municipalities and tax refunds for individuals. Regarding local municipalities and public authorities, which rely on funding for day-to-day operations, they may have to resort to temporary financing to make ends meet.
The potential of a long shutdown could be damaging for the economy of the state and local governments he concluded. "An extended shutdown could have negative economic implications for the state and its local government due to the loss of infrastructure and capital projects activities, the loss of income and sales tax revenue from furloughed workers and affected contractors, as well as the loss of tourism dollars from shuttered national parks and historic sites," Dinapoli said.

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