Residents eager to get their state tax refunds may have a long wait this year: The recession has tied up cash and caused officials in half a dozen states to consider freezing refunds, in one case for as long as five months.

States from New York to Hawaii that have been hard-hit by the economic downturn say they have either delayed refunds or are considering doing so because of budget shortfalls.

"It's an indicator of how bad it is," says Scott Pattison, executive director of the National Association of State Budget Officers. "You know things are bad when you have to do that."

New York, hit with a $9 billion deficit, may delay $500 million in refunds to keep the state from running out of cash, says Gov. David Paterson.

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Filed under: * Economics, Politics • Economy • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • State Government

1. Sick & Tired of Nuance wrote: Reduce your witholdings for next year.  Don’t give the government a free loan that they can fail to repay at their discretion. Another option is to amend your current filing and change the selection of being paid back this year to applying it to next year’s taxes, and then reduce your witholding.  Regardless, write to your state representatives and tell them what programs to cut spending on. March 15, 9:33 am | [comment link]

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