Budget Director Robert L. Megna issued a statement following yesterday's leaders meeting in which he warned of the consequences of not acting quickly to solve the state's $3 billion budget deficit.
"Unless action is taken to address New York's current-year budget deficit, our state government is likely to face significant cash flow difficulties beginning in December. During that month, several substantial local assistnace payments are scheudled to be made, including $2.5 billion in STAR and $1.6 billion in School Aid funding for school districts, $500 million in funding for city governments, and $500 million in funding for county governments, among others."
Without reductions in state expenditures, he says, the state may not be able to meet these obligations. If the Legislature fails to act, "we will have to begin to make difficult choices about which payments to delay." Megna asserts this could "create a trickledown effect on local governments and service providers across the state."
He also says New York could face a downgraded credit rating as a result of inaction. A lowered rating would make it harder for the state to borrow money.