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Paterson calls for big budget cuts

August 11, 2008 3:43:27 PM PDT
Legislative leaders were noncommittal Monday to New York Gov. David Paterson's plan to cut at least $600 million from the state budget in Medicaid, pork barrel spending and aid to local governments. Paterson proposed $1 billion in spending cuts for the Legislature to consider at its special session Aug. 19, suggesting they try to find at least $600 million to cut. With about a week before the one-day session, Senate majority Leader Dean Skelos and Assembly Speaker Sheldon Silver had little to say about the governor's proposal, which they had just received on Monday. The plan would not include any reductions in school spending.

"We will review the proposals advanced today by the governor and will continue to work with the governor and with our colleagues in the Senate," Silver said in a written statement.

Skelos applauded the governor for taking steps to reduce spending, but offered a few reservations.

"It's important that the governor and Legislature not take any actions that would force local governments to raise their local taxes," Skelos said in a statement. Paterson suggested the state cut financial aid to local governments by $250 million, about 6 percent.

Silver pointed out that his chamber had forecast a recession months ago. Skelos noted that Senate Republicans had passed the governor's tax cap and said New York needs to do more to root out Medicaid fraud.

But neither specifically supported any cuts.

Among Paterson's proposals is cutting $50 million in funding for the City University of New York. He's already trimmed a similar amount in the State University of New York system.

The biggest proposed reduction would be $505 million in Medicaid funding, including $169.4 million cut from nursing homes and $99.4 million from hospitals.

The Greater New York Hospital Association and SEIU, a union representing health care workers, described the cuts as "staggering" and warned they "would devastate New York's health care infrastructure and severely threaten access to care."

"In just a few short weeks we have gone from suggestions of shared sacrifice to making hospitals and nursing homes into sacrificial lambs," said William Van Slyke, vice president of the Healthcare Association of New York State.

Comptroller Thomas DiNapoli said Paterson's proposed cuts come when "New York State is facing serious fiscal challenges and spending well beyond our means."

Paterson ruled out tax increases "for the time being," including the Assembly Democrats' call for a higher income tax on those making $1 million or more.

The proposal doesn't include reducing state school aid, which was boosted a record $1.8 billion in April to more than $21 billion. Education spending is pushed by the strongest lobbyists in Albany, including the New York State United Teachers union and the state School Boards Association.

Another $132 million in Paterson's proposal would come from postponing some legislative programs approved this year, but he didn't identify them.

He would also limit pork barrel spending by legislators and his office to $100 million for specific programs, charities and projects. Paterson said he wants cuts that will offset future years of overspending.

When Paterson called for spending cuts July 29, the majority Senate Republicans and Assembly Democrats immediately ruled out trimming their highest priority programs. Both chambers opposed cuts to school aid.

Any cuts to education, health care and pork barrel spending for projects lawmakers support in their districts will likely be tricky in this election year.

Without making the cuts, Paterson said the Legislature may be forced to return to Albany in November to address the deficit. His two-year plan would cut $2.6 billion, if supported by the Legislature.

New York City Mayor Michael Bloomberg said "the governor has taken the tough next step."

In April the Legislature approved a $122 billion budget that increased spending by $5 billion, or 4.5 percent, over the previous fiscal year and added $11.5 billion in new debt that will be issued over several years. That followed the 2007-08 budget that increased spending 8 percent.


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