State Senate urges Paterson to not delay tax refunds

ALBANY - Responding to criticism from Gov. David A. Paterson, the State Senate Tuesday called on him to scrap plans for delaying income tax refunds to prevent New York from running out of money next month.

A nonbinding resolution was adopted unanimously in a chamber known for bitter partisanship. The measure asked Paterson to forgo withholding $500 million in refunds to hundreds of thousands of taxpayers who file returns in the first half of next month.

A similar resolution hasn't been filed in the Assembly.

Paterson said last week he didn't want to delay refunds by a couple of weeks but would have no choice if lawmakers failed to adopt a 2010-11 budget by the April 1 deadline. That spending plan must close this year's deficit and next year's, which together total more than $8 billion.

By withholding income tax refunds, Paterson said, New York would be able to pay bills due at the end of the fiscal year on March 31. The state would become insolvent otherwise.

"This is the taxpayers' money, not the governor's," said Sen. John Sampson of Brooklyn, the Democratic chief who introduced the resolution.

Republicans heaped praised on him and scorn on Paterson. Sen. Carl Marcellino (R-Syosset) said, "These tax refunds should go back to the people as quickly as possible."

He and others called for adoption of a bill - from Sen. George Winner Jr. (R-Elmira) and Assemb. Richard Brodsky (D-Westchester) - that would require refunds to be paid in 30 days instead of 45. A petition signed by 38 senators is needed for the bill to be considered. Thirty Republicans and four Democrats had signed on as of last night.

Last year, New York paid $6 billion in refunds to 6.5 million households. Tax refunds were withheld three times in the 1990s under Gov. George Pataki.

Matt Anderson, a spokesman for Paterson's budget office, said if the Senate "had passed actual legislation to close the deficit, rather than [Tuesday's] nonbinding resolution, we wouldn't be in the position of determining which payments to delay."