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State sets April 1 for tax refunds

Published:March 18, 2010, 7:03 AM

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Updated: August 21, 2010, 5:12 AM

Hundreds of thousands of state taxpayers waiting for overdue refunds, one more consequence of New York’s budget meltdown, will start getting them April 1.

The Paterson administration announced a resumption of 2009 tax-return payments Wednesday and said the roughly two-week delay will help solve the state’s cash-flow problems.

“On April 1, we’ll be making payments again,” said Matt Anderson, a spokesman for Gov. David A. Paterson’s budget office.

By delaying $500 million in refunds until April, the start of the new fiscal year, the governor was able to close part of the current-year budget deficit.

Anderson estimated the number of taxpayers affected by the delay at less than a million.

“Clearly, we understand the inconvenience this caused taxpayers,” he said,

“but we hope they understand this was necessary, given the state’s extraordinary cash-flow problems.”

When Paterson first announced the refund delay, some media reports suggested it could be months before 2009 refunds made their way to state taxpayers.

Paterson’s budget office countered by pledging to get the refunds out by early April, a promise it seems on course to keeping.

There also were cries of protest from state lawmakers — Democrats and Republicans. Among the responses was an online petition by State Sen. William Stachowski, D-Lake View, opposing the delay.

“Taxpayers are struggling, and in economic times like these, people use their income tax returns to pay rent, their heating bills or put food on the table,” Stachowski said.

Republicans also lambasted the governor.

“This is the latest case of the perpetual nickel-and-diming of New Yorkers,“ Assembly Minority Leader Brian Kolb, R-Canandaigua, said at the time.

What Paterson did was to hold back about $500 million— out of a pot of $1.75 billion—for refunds during the first three months of the year and push those payments past the end of the 2009 fiscal year on March 31 and into the next fiscal year in April.

Paterson’s budget experts say the plan became necessary because the Legislature failed to deal with about $1.4 billion in red ink during a special session in December.

By delaying refunds, the governor simply carried that red ink forward into the next fiscal year. The state faces an even larger deficit—$9.2 billion—in the coming year.

Budget officials are quick to note that this is not the first time the state has had to delay payments.

In December, the state postponed $750 million in payments due school districts, cities, counties and insurance carriers to prevent the state from ending the year in the red.

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