Another Reason Why New York Is Toast

New York is bankrupt - politically and fiscally. The state can't make its payments and a shutdown is possible as early as Monday if a budget extender isn't passed or a full year budget is adopted.

Part of the problem is that the state doesn't have the requisite payment for the already grossly underfunded state pension.

What have state leaders including Democrats Gov. Paterson, Speaker Shelly Silver, and Senate Majority Leader John Sampson agreed to do?

They've agreed to have the state pension fund loan itself the $6 billion it needs to meet its obligations.

Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.

And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.

Yes, read that again. The pension is paying itself the shortfall and calling it a balance. Where's Comptroller Tom DiNapoli to call them out on this and demand an actual payment rather than an accounting trick that doesn't actually provide funding for the pension funds?

New York has to cut spending sharply and make its actual pension payment obligations without the use of accounting gimmicks such as the one they're using in this instance. That's how the state got into the mess it is in.

This is yet another reason that New York is in such dire fiscal shape.