Budget Negotiations With Legislature Are Over: Paterson

Tuesday, Dec 1, 2009  |  Updated 6:46 AM EDT
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Just Your Average Joe-Bama

AP

Gov. Paterson speaks to a joint session of the Legislature at the Capitol in Albany, on Monday, Nov. 9. Paterson asked legislators to support painful midyear spending cuts to help close a $3 billion budget deficit.

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In the latest episode of Albany's failure to address a worsening state deficit, Gov. David Paterson says negotiations with the Legislature are over and its "last, best offer" falls far short of what's needed.

     Meanwhile, legislative leaders emerging from the same closed-door negotiations say progress is being made and a final deal is near.
    
As some rank-and-file lawmakers claimed a breakthrough had been made in the three-month old talks, Paterson said the Legislature's inaction was forcing him to take more extreme fiscal measures.
    
Paterson says he will reduce and possibly delay state aid to schools, hospitals and local government services to make sure there is enough cash for the state to pay its bills and protect its credit rating.

On Sunday, Paterson, again unable to get the legislature to agree to how to address the $3.2 billion deficit, said he was taking $1.6 billion worth of temporary, emergency measures to cover the state's December bills.

"I feel that we have to start making the deficit reductions on our own, hoping the Legislature will join us," Paterson said in a teleconference with reporters on Sunday. "This is the point where other states went off the cliff. This is where they should have acted and didn't."

He referred to even larger deficits in California and other states where officials were forced to borrow long term, miss payments that hurt their credit rating, issue IOUs, layoff workers, release prisoners early and close most libraries.

"Pushing any more problems down the road is unacceptable to me," he said, criticizing the Legislature for lack of action on the deficit since September. "My question is, when are they going to do their job?"

Not among Sunday's actions is Paterson's proposed 4.5 percent cut in remaining school aid that the Senate promised to block. Most of Paterson's immediate action involves shifting money from state agencies to the general fund, which must be returned to the agencies within four months under law. He also says he will temporarily use some cash from previously scheduled borrowing for capital projects. The plan includes his already announced cuts of $500 million through 11 percent cuts to state agencies, $150 million in improved Medicaid fraud collections and management efficiencies.

Two major pieces are less certain. He plans to get $200 million from the group yet to be chosen to put video slot machines at Aqueduct race track, a process delayed for years. He also seeks $250 million from the Battery Park City Authority, but that requires approval from City Hall.

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