NY Senate Passes Deficit Reduction Plan

By JOSEPH SPECTOR
Gannett Albany Bureau

ALBANY _ The state Legislature on Wednesday approved a $2.7 billion package to help close the state's $3.2 billion mid-year budget gap.

The deficit-reduction plan includes $550 million in cuts to programs, such as social services, higher education and transit initiatives.  The Legislature also agreed to Gov. David Paterson's cut of $484 million to state agencies that was approved in April as part of the roughly $132 billion 2009-10 budget.

The rest of the reductions were largely one-shot revenues and sweeps of unused money from agencies, including $391 million in education stimulus funds that was originally slated to be used next fiscal year.  The state is also banking on $200 million from the sale of gambling rights at Aqueduct Racetrack in Queens.

Gov. David Paterson objected to the plan, saying it doesn't make enough cuts in the face of a potential $9 billion budget gap next year.  But he said he will approve it because it was as far as lawmakers were willing to go after four weeks of calling them to Albany to address the state's fiscal crisis.

The package excludes cuts to schools, but includes some reductions to health care and local governments.  Education advocates said the legislation avoids potentially devastating cuts in the middle of the school year.

But while advocacy groups said the Legislature's plan scales back many of the cuts first proposed by Paterson, the governor has vowed that he's not done cutting state spending.  He has ordered his budget office to delay payments to schools, hospitals and municipalities to ensure the state doesn't run out of money this month.

"Because certain legislators are unwilling to stand up and control spending for fear of the political consequences," Paterson said, "I will move forward and implement the tough choices they were unwilling to make."

Assembly Speaker Sheldon Silver, D-Manhattan, acknowledged the plan might not cover the entire mid-year budget deficit, which he pegged as high as $3.9 billion before the fiscal year ends March 31.

"Although these cuts do not cover the full scope of the deficit - which may be as high as $3.9 billion - we remain committed to making the same sacrifices that everyday New Yorkers have been making already, without allowing the cuts to fall disproportionately on one segment of the population," Silver said in a statement this morning.

The Assembly worked through the early morning Wednesday to pass the budget bills, finishing shortly before 7 a.m.  The Senate voted midday Wednesday.

The budget reductions were among a number of measures passed Wednesday by the Legislature.  The chambers voted to establish a less generous pension tier for new state employees. After receiving approval in the Assembly, the Senate also passed reforms to the state's public authorities and a bill that would make it easier for state agencies to use state workers for information technology services instead of private contractors.

"Overall, I think the thing was reasonably fair across the board. It's just too bad how we got there in the first place," said Sen. George Winner, R-Elmira, who voted for the plan but said more spending should have been cut in April to avoid the mid-year gap.

The Legislature rejected most cuts Paterson wanted to make to hospitals and Medicaid, as well as cuts in grants to the poor and disabled.  They also rejected a $120-a-student cut to the Tuition Assistance Program for college students and cuts to the school breakfast and lunch assistance program.

The legislation includes $107 million in health-care cuts, while Paterson sought about $1 billion in health care and education spending reductions.  The agreement includes a 5 percent cut to operating aid to state universities and colleges and a 5.4 percent cut to the Office of Mental Retardation and Developmental Disabilities.  It also includes cuts to state cancer service and tobacco-control programs.

Some Republicans agreed with Paterson that the cuts do not go far enough. 

"This is just the latest example of Albany's fiscal shell game and 'spend today, pay tomorrow' mentality," said Assembly Minority Leader Brian Kolb, R-Canandaigua, Ontario County.