Budget doom and gloom

BY PETE DAVIS

Tuesday, November 17, 2009 5:32 PM EST

It’s a new week, but the same old story in Albany with legislators back in the capital but failing to close a $3.2 billion budget deficit as of press time.

For the second straight day, Governor David Paterson took to the airwaves imploring lawmakers to come to an agreement quickly because failure to plug the growing budget hole would put the state in jeopardy of not being able to pay its bills next month.

“Cutting now will be less damaging than gutting later,” Paterson said on Tuesday, November 17 on WWRL’s Errol Louis Morning Show – one of four live interviews he did that morning. “There comes a point that this kind of spending addiction we have in Albany has to stop.”

Last week, Paterson summoned legislators back to Albany to try to hammer out an agreement to plug the gap. Paterson’s plan includes cutting funding to state agencies by 10 percent and $1.3 billion reduction in local assistance program with $686 million in cuts to education and $471 million in cuts to health care. Legislators, predominantly from the State Senate, have challenged Paterson’s plan saying there need to be other ways to find the savings without cutting these areas.

“We are only putting off disaster, but we will pay the consequences in a very dire way if we don’t act now,” said Paterson, who has talked about keeping the legislators in Albany until they can come to some agreement.

On Tuesday afternoon, State Senate President Malcolm Smith told reporters that the Senate was making progress towards an agreement, but they would not return to session until a deal was hammered out.

“We have not resolved education or health care yet, but we believe, given what we’re doing right now, that we will get it done….the main thing is making sure that the cuts are fair [and] making sure that they don’t disproportionately hurt any group, and that’s where we are,” Smith said.

Although the State Legislature did not come to any agreements to close the budget gap on Monday, it did pass four bills, including one that gives additional measures to protect homeowners at risk of foreclosure and prevent similar crises from occurring in the future. The other bills include regulating the billion-dollar life settlement market in New York, creating a municipal energy sustainable loan program and making thousands of individuals eligible for an extension in their COBRA benefits.

While the state continues to grapple about a deficit reduction plan, the city is already making plans to deal with its own budget shortfalls for the 2010 and 2011 fiscal year. On Monday, November 17, Office of Management and Budget Director Mark Page sent a letter to all city agencies telling them that they would have to come up with cost-cutting measures and submit them by December 3.

For fiscal year 2010, the city is asking the Department of Education to cut their budget by 1.5 percent, uniformed service agencies by 2 percent and all other city agencies 4 percent. However, for 2011 those cuts go up to 4 percent, 4 percent and 8 percent for the respective agencies.

“It is hard to balance a budget of that size without dealing with the city’s workforce,” Deputy Mayor Ed Skyler told reporters on Monday.