[NYAPRS Enews] Paterson Seeks On Time Budget, Silver: You Can't Cut Way Out of Crisis

[Harvey Rosenthal]

Paterson Gives Up on Early Budget, Assembly Dems Predict Larger Deficit

Karen DeWitt  NY Public Radio  February 11, 2009

 

Governor David Paterson has now abandoned his goal of an early budget
agreement, as Democrats in the Assembly say the deficit has ballooned by
another billion dollars.

 

Governor Paterson, who originally said the state could save millions of
dollars if it completed the budget a month early, now says it's better
to wait for Washington lawmakers to approve the federal stimulus
package. He says he discussed the matter with state legislative leaders
in a private gathering Wednesday morning, and hopes to have a budget in
place by the new fiscal year on April 1.

 

"The leaders told me they just don't see any possibility of passing the
budget by March 1st," said Paterson.

 

Meanwhile, Assembly Democrats say their financial experts sifted through
the bad economic news from January, and have determined that the budget
deficit is actually one billion dollars higher than the governor has
estimated. Assembly Speaker Sheldon Silver says it now stands at $14
billion dollars.

 

"Essentially, we're finding that the economy is rapidly getting worse,
and without government action will become catastrophic," said Silver.

 

Paterson says he has no reason to doubt the numbers. The governor says
he urged legislative leaders to save the federal stimulus monies to trim
down future projected deficits, and not use the funds as a one shot to
simply plug next year's gap.

 

"We're going to have to use that money in responsible ways," Paterson
said.

 

Assembly Speaker Silver seemed to reject the idea of holding on to the
stimulus monies to use in future years, saying the funds will be needed
to offset potentially harmful spending reductions.

 

"You cannot cut your way out of this crisis," Silver said. "It is too
large."

 

The Speaker says his house continues to back an income tax hike on the
state's wealthiest residents. Governor Paterson and others have said the
tax could cause millionaires to leave the state. Silver disagrees, and
says the last time a temporary tax hike was imposed on the rich, after
September 11th, the number of millionaires grew.

 

Speaker Silver also brought up the possibility of a hike in the state
sales tax, in order to avoid deeper spending cuts.

 

Democrats who now control the state Senate have not taken a position on
the tax hikes, or other budget matters. While Majority Leader Malcolm
Smith says he's opposed to increasing taxes on the rich, several of his
members have signed on to a bill to impose new tax levies on New Yorkers
who make over a quarter of a million dollars a year.

 

Senator Smith says it's too early to count up the votes, but he says
he's ruling nothing out.

 

Republicans, who are now in the Minority in the Senate, say they will
not back an income tax hike on the wealthy, so the Democrats would need
all of the votes of their 32 members in order to agree to the plan.

 

And, while there's disagreement over whether or not to raise income
taxes on the wealthy, Governor Paterson is also getting some blowback on
his planned cuts to school aid, by both the Senate and Assembly
Education Committee Chairs. They say his spending proposals are too
drastic, and will work together in the legislature to restore the
proposed cuts.

 

http://www.publicbroadcasting.net/wxxi/news.newsmain?action=article&ARTI
CLE_ID=1468790&sectionID=1

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Paterson Counting On An On-Time, Not Early Budget

by Irene Jay Liu  Albany Times Union  February 11, 2009

 

Gov. Paterson said today that he no longer expects an early budget, but
has put his hopes on an on-time budget.

Speaking to reporters after the 5-way leaders' meeting, Paterson said:

 

"The leaders told me they just don't see any possibility of passing the
budget by March 1. That obviously will impact on the deficit to a
degree, but I think that the most important issue right now is that the
budget be on time and any days that we can save between April 1 and when
the budget is passed will enhance our position."

 

Paterson said in December that if the legislature passed the budget a
month early, on March 1, the state could save $1.3 billion.

 

The governor explained that he is no longer pushing for an early budget
because the details of the federal stimulus package, which is currently
being negotiated between the U.S. House and Senate, will impact how cuts
are brought down in this year's state budget.

 

"All indications are that the President wants to sign the budget on Feb.
16. If that happens, then we actually can count that money and that, in
some respects, will change some of the fashion that we resolve the
budget as opposed to Dec. 16 when I released it," he said.

 

This contrasts with Paterson's comments yesterday, when he said he
wanted to see cuts that real and recurring, irrespective of the federal
stimulus money.

 

"Whatever stimulus money we get is temporary, it's over a two-year
period. We should use that money in a way to create a surplus to protect
us... that's what I think we need the stimulus money - for something
that American households are doing now. Save. Save. Save. Save," he
said.

 

There's a bit of irony in this. Paterson has criticized the federal
stimulus package's proposed middle class tax cuts, because he said that
families will just save the money instead of spending it to stimulate
the economy.  The fact that he wants to pocket and save the stimulus
money, while making cuts that opponents argue will cost jobs in the
state, would appear to contradict the "stimulus" intent of the federal
package for the same reason that Paterson argues that tax cuts wouldn't
work.

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