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Paterson doubtful of deal on budget

The State Legislature's rejection of billions of dollars in spending cuts and tax hikes to balance the budget has prompted Gov. David A. Paterson to question lawmakers' commitment to control spending.

The governor signaled an almost-certain inability to strike a deal with lawmakers before an 11-day legislative holiday begins Saturday by submitting emergency legislation Wednesday to keep the government running for a couple of weeks after the 2010 fiscal year starts a week from today.

The governor said only the most essential programs, and those required by law, would be funded on a temporary basis as a way of "preparing the people of this state for some very, very tough sledding" in the coming year.

Two days after the Senate, Assembly Democrats released their version of a state budget, rejecting Paterson cuts totaling $600 million for schools and more than $800 million in health care. Money for colleges was hiked, as was funding for environmental programs. New York City is a big winner in the Assembly plan: more than $475 million in Paterson cuts were eliminated.

Like the Senate, the Assembly also rejected the governor's effort to hike revenues by permitting wine sales in grocery stores and hiking taxes on sugar-flavored beverages.

The governor, a lame duck, criticized legislative plans for rejecting tax hikes but not replacing the revenues with realistic cuts. He suggested the Legislature, which is up for re-election this year, produced populist plans that ignore the full extent of the fiscal crisis.

The emergency bill proposed Wednesday by Paterson calls for $4.6 billion in spending to keep the government operating through April 14. It includes $2.95 billion in Medicaid payments and $377 million for state worker salaries.

To deal with the state's $9.2 billion deficit, the Assembly plan relies heavily on borrowing: $2 billion worth.

"The borrowing has gotten us into this," Assemblyman James Hayes, R-Amherst, told his colleagues during the floor debate Wednesday night. He said the state's debt level already has soared to $57 billion; $10 billion of that still remains from past borrowings just to cover deficits over the years.

But Assembly Ways and Means Chairman Herman Farrell said the borrowing, a 10-year bond, will be done at a time of low interest rates in the marketplace. Farrell also insisted a budget deal can come together before this weekend.

Health care groups praised Assembly Democrats for restoring more than $300 million to hospitals, nursing homes and home care services.

The Democrats also proposed cutting $800 million in state aid to public schools -- $600 million below the level called for by both Paterson and Senate Democrats. The Assembly plan totals $136.7 billion.

The nonbinding Assembly resolution, passed Wednesday night, also includes Paterson's plan for a $1-per-pack cigarette tax increase, but rejects $600 million in revenues Paterson envisioned by imposing an excise tax on sugar-flavored beverages and permitting wine sales in grocery stores.

The Assembly plan restores money to a variety of social welfare programs, as well as the State University of New York system and financial aid for college students.

Assembly Democrats also accepted Paterson's call to cut state aid to cities, towns and villages from 2 percent to 5 percent, but restores $12 million in grants to Buffalo and Erie County.


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