New York finishes 2009 with cash, so Paterson orders payments to school districts

Syracuse.com reported that New York’s government finished 2009 with some cash on hand, and Gov. David Paterson said local aid payments he ordered withheld in December should be released in January.

A report from state Comptroller Thomas DiNapoli showed $883 million available at the close of business Thursday. He noted there was a $600 million year-end shortfall in the general fund, the account used to pay for state operations and local assistance, and said that was a first in recent history.

“I want to be sure everybody in the state understands we are not running out of money,” Paterson said. Bondholders were aware of the narrow margins and New York’s credit rating should not be affected, he said.

Paterson had withheld $750 million in aid to schools, local governments and nonprofit service providers, saying the government might otherwise run out of cash. On Thursday, he said that decision, which prompted a lawsuit by the teachers’ union and schools, was necessary.

“I would assume that in January, when the revenues come back, I would complete the payments that we delayed to the entities that have been afflicted,” Paterson said. “At that point, I will issue a budget that will project what we would think will be the necessary cuts.”

The state likely faces a deficit of about $8 billion in the next fiscal year, which begins in April, Paterson said. Some payments may need to be delayed again when major bills come due in March, he said. Read more here.