Gov. to propose major cuts, tax hikes

December 12, 2008 6:35:21 PM PST
Sources tell Eyewitness News that Governor David Paterson is expected to proposed major budget cuts and tax increases when he unveils his plan to deal with the state's massive financial crisis.So who will be paying more? And which programs will be cut?

When Governor Paterson presents his budget Tuesday, it will be full of gloom and doom. Compare it to what the mayor faced this week. In Bloomberg's budget crisis, the city deficit stands at $1.4 billion.

But Paterson is looking at 10 times that, at least $14 billion worth of red ink.

"We're not going to be get out of this challenge overnight," likely Senate Majority Leader Malcolm Smith said. "It will take us several years to do so."

Sources say that will mean deep deep cuts to public schools, and much more chopped out of hospitals and Medicaid.

It also will mean higher taxes for many New Yorkers. One idea gaining steam is a millionaire tax on the wealthiest New Yorkers.

"I believe we have to look at the millionaire tax," State Senator Eric Adams said. "We can't keep going back to the same sources and cut those traditional sources...We're already down to the bone. Now, we have to look at other places."

Another place to balance the budget could mean selling state assets, like the lottery.

In the middle of this budget nightmare, Albany is a mess. Democrats gained control of the Senate from Republicans for the first time in 40 years.

Malcolm Smith will probably become majority leader, but there's plenty of infighting from Democrats.

And yes, that could make for dicey negotiations as the governor tries to hammer out a balanced budget.

"The whole point of the governor putting out his budget a month early was so the Legislature could hit the ground running and act as soon as it comes back," city budget commissioner Carol Kellermann said. "And it doesn't look like they're going to be able to do that at the rate they're going."

Also on Friday, one unhappy Democrat who has gotten cross with his party leaders said the gay community is now jamming his office phones and making threats. Senator Ruben Diaz, Sr., of the Bronx, an ordained pentecostal minister, opposes gay marriage and thought he had worked out a compromise on the issue so it never came to a vote in Albany. That's not so certain now.


STORY BY: Political reporter Dave Evans