Cash-Strapped New York State Halts $500 Million in Tax Refunds

Is it any wonder they want a soda tax?

"I apologize that we had to do this. I hope it serves notice on the public of how serious our financial situation is," Gov. David Paterson said.

Reports CBS Channel 2 (ViaDrudge):

Several hundred thousand New York taxpayers will be affected with most getting an average refund of $1,000. People who filed in late February and early March might have to wait as long as six weeks till the checks are in the mail.

The governor said the move was unavoidable. He's also planning to withhold $1.5 billion in school payments and aid to local governments.

State and city governments are shrinking before our eyes. Only, the Federal government has the power of the printing press that can prevent it from shrinking. Bernanke hasn't been forced to buy Treasury debt, yet, but the day is coming.