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.

DaNews from DiNapoli

Am I the only one who thinks it is a little sad that Comptroller Tom DiNapoli essentially puts out his own newsletter? It's sort of like how Assembly Minority Leader Brian Kolb has a weekly address, except DiNapoli always seems to be touting a minor accomplishment or warning of impending economic doom. At least Kolb keeps it simple with his party's talking points.
One of the interesting highlights is the revelation that state tax collections still lag behind payouts for certain programs, which has resulted in a reliance on delayed payouts for programs like STAR.
On a different note, it appears that the state paid nearly $239,000 for health insurance benefits for deceased or ineligible retirees. ABout half that money has since been recovered.
And finally, if you're not sitting down you might want to, because DiNapoli is now releasing Weekly State General Fund Cash Watch Numbers!!!
“Taxpayers should know what’s going on with the state’s finances,” DiNapoli said. “Every week we’ll post the cash watch on the State Comptroller’s website.”
He said that people are focused on next year's budget gap, but are ignoring the challenges in the present fiscal year, which ends on March 31. "In the next three months, the state is facing a General Fund budget gap of well more than $1 billion. If no action is taken, the General Fund cash situation could become very precarious and next year’s budget gap could reach $11 billion. We have to monitor this situation very carefully," said DiNapoli.

For Week Ended January 7, 2011*
General Fund Balance on 1/1/11:
$3.142 billion
Receipts & Transfers from Other Funds:
$25.93 million**
Disbursements & Transfer to Other Funds:
($1.18 billion)
General Fund Cash Balance 1/7/11:
$1.986 billion

The State Comptroller’s office processes approximately 232,000 state payments daily. In State Fiscal Year 2009-10, it processed more than 76 million payments totaling approximately $107 billion.

*This information is a summary of weekly activity recorded in the state’s accounting system and does not include post-closing adjustments, which will be reflected in the Comptroller’s monthly Cash Report.

**General Fund receipts are reduced by $2.4 billion to reflect the deposit of personal income tax receipts into the State Special Revenue Fund to finance School Tax Relief Fund (STAR) payments to schools that were made on Jan. 3, 2011, which were delayed from December.

Remember BP? NY DOES

The New York State Common Retirement Fund will co-lead a class action lawsuit against BP, on the basis of its poor safety practices.
NYS Comptroller Tom DiNapoli is leading the suit with the Ohio Attorney General, who represents his state's public pension funds.
"BP publicly distorted its safety procedures and its level of preparedness to respon to a catastrophe such as the Deepwater Horizon explosion, thereby misleading investors and causing the value of BP's stock to plummet when the truth was exposed," said DiNapoli.
He argued that his responsibility to bring the suit on behalf of NYS was derived from his role as the trustee of the pension fund.
BP lost approximately 40 percent of its stock price following the incident in April. The state's pension fund held about 19 million shares at that time.
In July, NYS filed for co-lead plaintiff status in the lawsuit against BP. The suit also accuses the company of misleading investors in its ability to clean up the spill in a timely manner.