As Paul Krugman put it, states that cut spending in a time of recession are like 50 little Herbert Hoovers.
Well, welcome to New York State, whose governor just slashed payments to schools and local authorities in a bid to keep the state solvent.
Saying the “day of reckoning” for cash-strapped New York state is here, Paterson announced Sunday he is unilaterally withholding 10% of nearly $1.9 billion in school and municipal aid funding that was to be paid Tuesday.
For the city that means its school aid payment will be about $60 million short and its municipal assistance payment $23.9 million lower than expected, Paterson’s budget office said.
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