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STATE BUDGET CUT BY $1 BILLION LEGISLATORS REDUCE WORK FORCE, SLASH AID, HIKE SUNY TUITION, TRIM HOSPITAL BAILOUT

State legislators today approved an unprecedented midyear cut in state spending and a $300 annual increase in tuition at the State University of New York.

With cuts in the state work force and reductions in virtually every state agency, the package will save the state roughly $1 billion to help close a deficit in this year's budget that may open again before the end of the fiscal year.

After two weeks of negotiations on Gov. Cuomo's deficit-cutting plan, lawmakers straggled in to pass bills early this morning. The combined effects of the cuts mean a loss of $8 million for Erie County and $7 million for Buffalo.

Never before has the state cut so much money in the middle of its fiscal year. Cuomo called for the cuts last month to avoid a $1 billion deficit in the state's $50 billion budget.

State Comptroller Edward V. Regan is to release new figures Monday on state revenue collections that are expected to show a deficit at least $500 million deeper than Cuomo projected last month.

The package "ignores the undisputed fact that the problem which must be solved is at least a $1.5 billion problem -- 50 percent larger than this bill admits," said Sen. John Sheffer, R-Williamsville, who voted against the plan.

The package approved overnight calls for reducing state aid to local schools, firing state workers, raising SUNY tuition and trimming the size of a hospital bailout plan approved just months ago.

After resolving the few remaining disputes Thursday night, the Legislature rushed to approve the bills before those compromises had time to fall apart, said Saul Weprin, D-Queens, chairman of the Assembly Ways and Means Committee.

"There are some very severe cuts in this budget, and many people in all walks of life will be affected," said Weprin.

His committee sent the first major budget-cutting bill -- the Medicaid package -- to the floor about 1 a.m. today for action by the Assembly. That package includes a reduction of more than $450 million in the state's Medicaid costs this year and next and a temporary tax on the revenues of hospitals and nursing homes.

The Senate completed its work at 4:20 a.m. while the Assembly adjourned at 4:35 a.m.

The package includes:

The elimination of 6,000 state jobs, resulting in layoffs for nearly 2,000 state workers, largely in the state prison and mental health systems. Another 4,000 positions will be eliminated through attrition and a new incentives program to encourage early retirements.

A roughly $190 million cut in the state's $9 billion school aid package. Erie County districts would lose more than $8 million, including $1.84 million for Buffalo, while Niagara County schools would lose $1.8 million, including $429,313 for Niagara Falls. Cuomo had proposed a $200 million reduction in his budget-cutting package.

A $45 million, or 10 percent, cut in state aid to municipalities, including a $4.6 million reduction for Buffalo.

Another $64 million reduction in pension savings for municipalities, including more than $800,000 for Buffalo.

More than $8 million in cuts in state aid to Erie County this year and next, including Erie County Medical Center and other county agencies.

The major reductions for the county include a $3.5 million loss this year and next year in state aid for the transportation and education of handicapped students as well as a $350,000 loss in highway maintenance funds.

Erie County Budget Director Sheila Kee said she was uncertain about precise figures in the budget-cutting package. One area at risk, she said, is the entire $260,000 budget for a rape and assault prevention program.

A reduction in the state's Medicaid costs by $102 million this fiscal year and $350 million in the 1991-92 fiscal year, with Erie County Medical Center losing roughly $960,000 next year.

The package includes a temporary tax of 0.6 percent on hospitals and nursing homes, generating $148 million for the state during the 15-month life of the tax.

The plan essentially avoids the $453 million cut in state aid originally proposed by Cuomo for all hospitals and nursing homes statewide.

A $300 annual increase in the $1,350 tuition for the SUNY system.

The SUNY tuition increase would be the first in seven years. SUNY officials might seek another increase next year, possibly as much as $600 a year, according to state legislators.

A furlough is still a possibility for the State University system, which must adopt roughly $51 million in spending cuts. A $150 tuition increase scheduled to start in January will save about $16 million next semester.

Similar cuts are being made in other state agencies, many through layoffs.

A deferral of one week's pay for all state workers until the next fiscal year, when workers will receive an extra day of pay each pay period until the debt is repaid. This replaces the five-day unpaid furlough the governor proposed that state workers take before March 31.

Although state leaders agreed to the broad terms of the agreement Wednesday night, the budget-cutting package was not completed until late Thursday, when negotiators appeared ready to print the eight pieces of legislation needed to carry out the spending cuts.

Sheffer complained that package is unfair, hitting local governments harder than it hits state agencies and workers in mental hospitals and prisons worse than the meager cuts expected among mid-level bureaucrats. It was also wrong, he said, for legislators to order another one-week delay in the state's payroll without ordering the same lag for themselves and their staffs.

Legislators had incentives for getting the package approved by the weekend.

Regan had been expected to release figures today on the state's November tax collections but put it off until Monday.

While negotiators worked on nagging disputes and many legislators slept in the chamber, fiscal experts for Cuomo were trying to calculate how much money the package actually will save. Cuomo wanted the Legislature to cut roughly $600 million, while he would order $400 million in administrative cuts.

Instead, it appears the Legislature cut around $400 million, with more than $100 million being saved through the payroll delay.

Assembly Speaker Mel Miller said he is confident Cuomo can manage most of the remaining cuts through layoffs and other savings.

There were other signs, however, that the budget package may not be as large as originally proposed.

A small example is the $200,000 savings Cuomo recommended through the sale of surplus items in the state museum. Even though such a sale is against the state's own museum policy, the Legislature boosted that amount to a $400,000 savings in the final plan.

All of the budget-cutting bills must receive Cuomo's signature before they take effect. Miller and others said they expect the governor to sign all or most of the package.

In addition, the state is imposing a new fee that school districts must pay for services rendered by the state Education Department.

The new fee, which will raise about $2.5 million, will be used to save 48 jobs in the state Education Department, Sheffer said. He complained that another 59 jobs are being cut in the agency, but none in the units that oversee primary and secondary schools.

Also saved was $12.1 million in a highway aid program that includes $400,000 for road repairs in the Town of Evans.

The Legislature also did not abolish or consolidate the state commissions and authorities as Cuomo recommended.

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