More than 2.4 million New York taxpayers due a refund this year are out of luck for a while.
The New York Department of Taxation and Finance has run out of postage. Until the politicians in Albany reach a truce -- an event which apparently happened today -- and pass the budget, the revenue folks won't be able to buy any more stamps. On one side has been Democratic Governor Hugh L. Carey and the Democratic-controlled Assembly. On the other is the Republican Senate and its majority leader, Warren Anderson.
Late today Assembly leader Stanley Fink and Anderson said they had reached an agreement and that work on a new budget, which was due on April 1, could begin as early as Monday. It still would be some days after that before postage appears in the tax offices.
If the latest agreement, to which the governor is also a party, breaks down, however, it won't be a surprise.
Last week a similar agreement was hammered out among Fink, Carey and Anderson. But within two days, Anderson claimed the deal he thought he had struck was not the one the Democrats said they agreed to.
State workers are being paid in scrip. School districts have missed their April payment from the state and probably will miss May's. The state's regular spring borrowing -- essential to keep it running until tax receipts come in later in the year -- has had to be postponed at a cost of about $60 million in higher interest.
Then the postage machines at the tax office ran dry Tuesday night.
As is often the case in New York politics, the battle lines are clear but the contested territory is not.
"It looks like the gubernatorial politics of two titans," said a top Democratic leader. Carey, who intimates say still has his eyes on the White House, is gearing up for a third run for the Albany mansion next year. The Binghamton Republican reportedly is interested in a try for the gubernatorial post himself.
The central issue became Carey's January proposal that the state absorb the costs of Medicaid that local governments now pay, a proposal that if enacted would be less than a rounding error in this year's $16.6 billion budget.
After promising to forego a honeymoon so he could bring the state a budget (the governor married on April 11), Carey instead spent most of April traversing the state to drum up support for his Medicaid proposal.
Anderson would have none of it. The Medicaid issue, which Anderson supported in the past, was not a budget issue, he argued, and should be considered separately.
Anderson had his pet, as well -- a $2 billion tax cut over five years, with $488 million coming this year. Although Carey himself proposed a similar-sized five-year cut last January, Democrats argued that $488 million was too much in the first year.
Carey and Anderson "played chicken" for most of April, but early last week Carey gave in. He agreed to postpone consideration of the Medicaid issue. In return, Anderson agreed to $75 million in tax cuts (about a third of which already have been passed by the Assembly) and gave other concessions, too. The way seemed paved for quick passage of a budget.
Two days later, the agreement unravelled. Anderson said that he believed the agreement still allowed for $2 billion in tax cuts over five years.The Democrats demurred. Like the Medicaid proposal, they said, the tax cuts were up for reconsideration.
Today, Fink said the two legislative leaders agreed to tax cuts totaling $1.15 billion over five years, with $75 million coming this year and $150 million next.
The New York budget is a blend of executive proposals and legislative changes. The legislature can cut the governor's spending. He has the right to veto any items that exceed his proposals and did so last year after Fink and Anderson agreed to the budget.
The governor's signature also is needed on a document asserting the budget is in balance, or else the state cannot raise its $3 billion.
"The budget realistically is a tripartite document," said a top Assembly Democrat. "We learned that last year when Carey walked away from Fink and started throwing vetos to look fiscally responsible."
Legislators said movement was inevitable. "Each day we go on without a budget makes it more difficult. You can only juggle and patch so long," one top legislator said.
That's what the tax officials discovered. They socked away extra postage before April 1 and have mailed 3.1 million refunds totaling $682 million -- tax refunds come from current tax payments and do not need to be appropriated. Now they can process the average $210 refund check, but for want of 18 cents cannot send them to their rightful owners.