As a sign of the fiscal squeeze pressuring state budgets all over the country, Gov. Paterson has frozen tax refunds for New Yorkers to the tune of a half-billion dollars.

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.

"The damage at this time would be far worse because if we do not pay our debts on time, it thrusts the state into a downgraded credit rating," Paterson said.

Now where could this have happened before, because it sounds familiar...

Oh yeah. Last year in California!

In 2009, Gov. Schwarzenegger froze tax refunds and welfare cheques worth $3.7 billion (things are always bigger in California) about this time last year while a budget was hammered out to close a massive deficit. I guess some government measures are just too good to keep on the west coast.

Gov. Paterson didn't need a crystal ball or an Oracle to see that paying your debts is important, particularly if you're going to need to borrow lots of money in the near future. In January of this year, Standards & Poor cut California's debt rating. This follows a drop in 2009 as well.

Some budgetary numbers for FY2010-2011 for comparison purposes (click on numbers for source documents):

Ouch.