IT'S TIME TO TIGHTEN OUR BELTS

"The only way our State can put its long-term fiscal house in order is through significant, recurring spending reductions. In the short-term, however, plummeting revenues and record deficits have once again forced me to take extraordinary cash-management actions in order to ensure the continued orderly operation of our government. New York State is facing severe cash-flow difficulties at the close of the current fiscal year. This requires immediate action, and as a result, a $2.1 billion School Aid payment originally planned to be made on March 31, 2010 - but not statutorily due until June 1, 2010 - will be made at a later date. The State intends to meet the June 1 statutory deadline for making this payment, assuming sufficient cash is available at that time.
 
"The fact that extraordinary cash-management actions such as these are necessary underscores the dire nature of our State's fiscal circumstances. In December, I ordered the withholding of $750 million in payments to school districts, local governments, and other entities, in order to prevent the State from running out of cash. These withheld funds were ultimately paid in January when the State's operating margins temporarily improved. Deferring payments, however, does nothing more than delay an inevitable day of financial reckoning.

"Significant spending reductions must be made if we want to put New York on the road to long-term fiscal and economic recovery. Unfortunately, the spending plans that the Senate and Assembly have put forward did not include enough cuts to move us toward the goal of a fiscally responsible and sustainable State budget. In fact, in light of the State's worsening revenue situation, additional reductions beyond even those included in my original budget proposal may ultimately be necessary.
 
"In order to reach a consensus budget agreement, all sides must come together as soon as possible and make the tough choices necessary to reduce spending to more affordable levels. These are the types of difficult decisions that New York's taxpayers are demanding of their leaders."