NY Delays All Refunds Until April 1st

The income tax refund checks will be in the mail, but with a two-and-a-half week delay.

Gov. David Paterson has temporarily halted income tax refund checks, with the last batch going out March 12 and no more scheduled to be sent until April 1.

“We paid all the way up until we hit $1.25 billion (in refunds)” Budget Director Robert Megna said Tuesday, explaining approximately $500 million is being delayed in order to get the state through the cash flow crunch that comes every March and is particularly bad this year.

About 1.35 million New Yorkers already have their income tax refunds in hand. Those who file from about now on should get their checks in about a month, Megna said.

But those who filed in late February and early March will likely have to wait about six weeks rather than the usual four weeks.

Paterson earlier warned the checks might be delayed due to the state budget crisis, which includes a drop in tax revenue and a budget deficit projected at more than $9 billion through the next fiscal year, which starts on April 1.

A number of large payments to localities for expenses such as schools and Medicaid are due in March, spurring the need for a delay.

“We know that’s an inconvenience to people,” said Megna. “We didn’t want to do it, but because we were put in this cash flow position we had to do it.”

Typically, more than 5 million of the 9 million New Yorkers who file get refunds, averaging about $1,000 each, Megna said.

The budget director downplayed the delay, noting that last year, $1.75 billion was paid before April 1, as compared to the $1.25 this year.

“We’ve always set a threshold,” he said.

Paterson earlier said some of the blame should rest with the Legislature which failed to make cut as deeply as the governor wanted during a special session late last year.

Lawmakers, though, noted the budget problems go back farther than that.

“This is not new,” said Sen. Roy McDonald, R-Saratoga.

Assemblyman Jack McEneny, D-Albany, said other states have been forced to adopt similar delays. He said he hasn’t heard complaints from the public about the refund delays.

“They need the money,” said Assemblyman Tim Gordon, of Bethlehem, who is in the Independence Party but caucuses with the Democrats. Gordon said he’s heard a few complaints from constituents waiting for their refunds.

Democratic and Republican lawmakers alike said they were frustrated with the lack of progress in completing the 2010-11 budget, due April 1 but which most observers say will be late.

Over the weekend, Democrats who control both the Assembly and Senate said they would set up bipartisan joint committees to work on the budget but as of early Tuesday evening that hadn’t happened.

Republicans, meanwhile, complained they were shut out of a meeting Paterson held with Democratic leaders Assembly Speaker Sheldon Silver and Senate Majority Conference Leader John Sampson.

Who pays

New Yorkers who file state income taxes: 9 million

Number of refunds due: 5 million

Average refund: Approximately $1,000

Source: The Times Union