Posted: Wednesday, 20 August 2008 4:11AM
Governor David Paterson, New York State Legislature Agree to $2 Billion in Budget Cuts
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ALBANY, NY (AP) -- New York's Legislature and Gov. David Paterson agreed late Tuesday on a plan to cut state spending by nearly $2 billion over the next two fiscal years to trim looming deficits.
Paterson said he believes a turning point of responsibility and courage to stand up to special interests has begun in Albany.
``The winds of change have hit Albany,'' Paterson told The Associated Press.
``In the last three weeks, the Legislature has shown a metamorphosis,'' Paterson said in the AP interview from his office in the Capitol. He noted that some lawmakers bristled at his unprecedented televised address to New Yorkers last month and criticized his comment that they were ``on vacation'' while billions of dollars in deficits deepened.
The Senate was expected to return Wednesday morning to give final legislative approval of the deal struck late Tuesday night to cut $426 million from the current state budget, according to an official close to the negotiations who spoke on the condition of anonymity.
The cumulative cuts over two years will be $1.7 billion, the official said, speaking on condition of anonymity because the agreement hadn't been made public. By the 2011-2012 fiscal year, the agreement will cut $2.35 billion in state spending in what appears to be unprecedented budget action during a fiscal year to create recurring savings.
Paterson had targeted $600 million in cuts for the current $122 billion budget in the emergency economic session of the Legislature that he called. The cuts of less than 1 percent of the budget will essentially reduce the growth in spending approved in April. The state is still projected to face about $20 billion in deficits in the next three years because of a recession that is cutting tax revenues including those from Wall Street, which provide about 20 percent of the state's revenue.
The deal was expected to include 6 percent cuts across the board in many areas of state spending. The bill would not cut basic school aid, but the City University of New York was expected to have as much as $50 million shaved from its budget.
Paterson is cautiously optimistic the cuts will be enough to get New York through until the next budget, the official said.
In March, Paterson got the Legislature to agree to cut $500 million from the budget presented by previous Gov. Eliot Spitzer. Paterson cut another $630 million from his state agencies this spring to close the state's first deficit this year.
The deal includes a $50 million cut to pork-barrel spending - money that legislators can put toward projects in their home districts this legislative election year.
The cuts will also include a cap on the rates of Medicaid reimbursement to hospitals. The move isn't expected to deliver big savings in the current fiscal year, but the savings are estimated at $170 million each year after that.
Paterson is also sweeping several executive funds, including extra money in the state's wireless Internet project, although that project will continue.
Cuts during the fiscal year and commitments to reduce spending in coming years are rare in Albany, where annual spending in recent years increased at two to three times the inflation rate.
``I think it's a start. They are recognizing there is a problem,'' said Elizabeth Lynam, deputy research director of the Citizens Budget Commission, an independent fiscal and government watchdog group. But she said the Legislature and governor need to get beyond across-the-board cuts to make the biggest programs - education and Medicaid health care - more efficient and affordable.
Paterson said lawmakers, long criticized as beholden to special interests led by public employee unions, stood up against the pressure this election year. He also said the special interests seem to have overplayed their hand by buying more than a $1 million in ads opposing his cuts and by withholding important union endorsements from lawmakers if they cut education or health care funding.
Meanwhile, the halls of the Capitol were filled with chanting by people opposed to any cuts in their health care programs. People in wheel chairs also held a protest outside the governor's office.
Paterson also said his rising approval rating, as reflected in statewide polls, has helped give him the authority to force fiscal restraint on Albany, which for decades has been known for little of it. But he said he would have done it anyway because it was the right thing to do.
``I am staking my own personal reputation and career on this,'' Paterson said earlier in the long day. |
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