Last year California delayed their tax refunds because they simply ran out of money to pay them. This year problem is going to be much more widespread.
As New York weighs a potential delay, two other cash-strapped states, North Carolina and Hawaii, have already announced they will put a hold on refunds until June and July, respectively, allowing them to retain funds longer and cover their budget shortfalls with hundreds of millions of dollars owed to individuals and businesses.
"The refund checks amount to money that belongs to taxpayers. They haven't given the state permission to manage it for them," said an editorial in North Carolina's News and Record newspaper. "[The state] should have anticipated and planned for shortfalls. Time is money, and the money should be returned to its rightful owners on time."
Time is indeed money. That's why I never understood why people put off filing their taxes until the last minute if they expected a refund. That procrastination basically amounts to giving the government an interest-free loan.
We have nearly two months before the tax filing deadline, so don't be surprised if several other states implement refund delays.