Tax officials in New York insist the state will not join the ranks of other fiscally distressed states in delaying income tax refunds this winter and spring.
"Absolutely no talk of that," Thomas Bergin, a state tax department spokesman, said of suspending or delaying income tax refunds to help prevent any cash flow problems for the state budget.
But some tax preparers say they are starting to see refunds move more slowly in New York.
The state has issued $235 million in refunds during the first four weeks of tax processing as of last Friday, down just slightly from $236 million a year ago during the initial four-week processing period then, according to Susan Burns, a tax department spokeswoman.
But the number of refund checks issued has dropped from nearly 286,000 during the first three weeks last year to 231,000 so far this year. That means the average refund has jumped from $825 last year to $1,015 so far this year. Tax officials could not explain the increase in the average refund but cautioned that the numbers are early in the processing period and could change as the tax season goes on.
New York is facing a potential $14 billion deficit in the upcoming fiscal year and is just one of more than three dozen states with red-ink budgets. So far, three states -- California, Arizona and Kansas -- are delaying processing tax refunds as a way to manage cash flow problems.
But experts say there could be slowdowns in some states that the public would not really know about.
"It's not something that's popular to announce, so oftentimes you won't get that. It just sort of happens," said Jim Eads, executive director of the Federation of Tax Administrators, a Washington group that represents state tax officials.
"It may happen not so much as a total withholding of refunds, but a slowdown in the processing of refunds to more narrowly match cash flow," he added.
But state officials in Albany say the 2008 budget included $1.75 billion to cover tax refund payments in the first quarter of this year. Come April 1, however, a new fiscal year starts, and if there are delays or postponement of refunds -- depending on the outcome of state budget talks -- it could be felt after then. But officials cautioned there has been no discussion about any refund slowdowns.
New York customers of H&R Block are told it will typically take eight to 15 days to get a state refund if they file the fastest way: electronically and with a direct deposit of the refund to their bank account.
"It is taking longer than that. At this point, we're trying to figure out why," said Gene King, an H&R Block spokesman.
Edward Arcara, a Buffalo certified public accountant, said the tax season has been slowed a bit this year by delays in brokerage houses sending 2008 financial statements to investors. He said it is too soon to determine a trend in refund turnarounds, but he noted that getting refunds from New York always takes a bit longer than from the federal government.
If anything, so far, he said, it is taking a bit longer to get confirmations from the state Tax Department when his clients submit tax forms electronically.