New York's budget cannot be sustained in the New Year. Numerical data for NY State below is taken from "Comptroller 2010 Report on Financial Condition of NY State.*" prepared in March 2009. In the State Fiscal Year 2009-2010 spending reached $126.9 billion*, or $6,493* per person according to NY Comptroller. But 4.5* million NY residents receive Medicaid(which is free and whose recipients pay no taxes) or 23% of the total 19,541,453 NY residents, thus raising the taxpaying share of NY expenditures per tax-payer resident and their dependents to $6,493 divided by 0.76 = $8,543 per tax paying resident and all dependents on that tax paying resident )
As of 3/31/2010, 16% or $9.8 billion* of NY's debt was issued as budget relief. This number was corrected by DiNapoli in an Albany Follies Sideshow by adding another billion dollars to this budget relief in Dec. 2010, thus $10.8 billion is claimed as required, but not funded in 2010, for budget relief. These chickens will come home to roost and greet Andrew Cuomo at the beginning of the New Year.
Moody's predicted federal treasury bonds will be downgraded if only $200 billion was added to federal debt, but Harry Reid added $1 trillion to the debt in pending Senate Bill today. Guess, if Treasury securities are downgraded and rates raised, will States borrowing rates rise? Usually, when federal interest rates rise, state rates rise at least proportionally or in the case of NY,CA,IL and MI even more.
Now back to NY where, "NY was 2nd most indebted state behind California and had twice as much debt as the 3rd most indebted state.*"
NY's State's funded debt is $60.5 billion*, or as of 3/212010 of $3,105* per NY person.
item #1 Debt Service Expenditure in NY in 2010 was $5.6*billion in interest payments (due immediately, see link).
Now what happens if debt service rises from 3.337% by an additional 4% added due to federal policy and Chinese reaction and Moody's devaluation of NY and federal debt as described above.
Or that increases of #1 above from $5.6* billion will be to more than a double $11.2 billion.
Now, where from will the governor and legislature take that additional $5.6 billion dollars?
Ignoring the spending budgeted for the sacred cows of education and medicaid from where do you take the $5.6 billion dollars from the remaining categories below:
From the $4.2* billion spent for public welfare
or the $4.8* billion spent for public safety
or the $5*billion spent for transportation
or the $0.8* billion spent for Environment and Recreation
or the $0.2* billion spent for business regulation
or the $6.4* billion spent for General government
or $5.6* billion from their above total of $21.4*billion or 26% from each of the above requiring dismissing (26%?) state work force in each of the above categories.
And if you think that 26% reduction is bad, look at all the other additional cuts required when other factors are included
The handwriting is on the wall
New York must and will pay the piper
*all data from Comptroller 2010 Report on Financial Condition of NY State.