[NYAPRS Enews] Paterson Warns of State Layoffs, Provider Payment Delays, No Pre-K

[Harvey Rosenthal]

Paterson Warns Of 'Furloughs, Layoffs,' And More If State Can't Close
Huge $3.2B Budget Gap

By  <http://www.nydailynews.com/authors/Kenneth%20Lovett> Kenneth Lovett
NY Daily News  November 20th 2009

 

 <http://www.nydailynews.com/topics/David+Paterson> Gov. Paterson Friday
laid out his Doomsday scenario if the Legislature does not make
significant cuts to close its massive $3.2 billion budget gap. 

"Furloughs, layoffs, borrowing, downgraded credit ratings, delayment of
payments to schools, delayment of payments to local governments, delayed
payments to service providers, delayed payments to the workforce,"
Paterson told reporters. 

"I've been telling you what's happened in the other states, that's what
we're going to have to do." 

"Twenty six states shut down their early childhood education and pre
kindergarten programs, and that's what we're going to have to do, all of
the above." 

Paterson also revealed that
<http://www.nydailynews.com/topics/Moody%27s+Corporation> Moody's
Investors Service, one of the state's chief rating agencies, has warned
that the state's credit rating could be downgraded unless the budget gap
is closed. 

"The next three months will be critical to the state's credit rating,"
Moody's warned. 

It said the state's rating will be in jeopardy "if there is no action
taken by the state to close the gap, or if action is taken but is
largely one-time in nature (therefore increasing the structural
imbalance in the out-years)." 

Paterson said seven states had their credit ratings downgraded in recent
weeks. A lower credit rating would mean an increased debt load because
the state would have to paying a higher interest rate on borrowed money.


Paterson indicated the state's cash crunch will begin the third week of
December, when the bulk of the payments are due. "People have better get
serious," Paterson said. 

The governor complained that the Legislature's proposals don't cut
school aid and only reduce health care funding by $100 million. 

He is seeking more than $1 billion in such cuts. 

Paterson also said the plans he's seen from lawmakers do little to
address next year's projected $6.8 billion gap. 

"This is a lot more serious than the interests of some of the
legislators who would rather go home and be heroes saying, 'Look, I
didn't cut school aid. Look, I didn't cut health care." 

Meanwhile, state Controller
<http://www.nydailynews.com/topics/Thomas+DiNapoli> Thomas DiNapoli
urged the Legislature to balance this year's spending plan without
resorting to fiscal gimmicks or debt. 

Without timely action, he said, the state's general fund would go $1.4
billion into the red by the end of next month if all bills are paid. 

The state, he said in a report, only has "limited" options to deal with
the deficit, including delaying payments to local governments, school
districts, and service providers.

 Or, he said, the state can grab money from other parts of the budget,
which he urged would only provide one-time revenue. "A particularly
harmful option would be short-term borrowing, because it would only
postpone the time when the underlying problems must be addressed," his
report says. "This option also sends the negative message that the state
is unwilling to address its financial issues." 

 

http://www.nydailynews.com/news/politics/2009/11/20/2009-11-20_paterson_
warns_of_.html?print=1
<http://www.nydailynews.com/news/politics/2009/11/20/2009-11-20_paterson
_warns_of_.html?print=1&page=all#ixzz0XWCrWcFU> &page=all#ixzz0XWCrWcFU

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New York Furloughs, Firings Loom, Paterson Says 

By Terrence Dopp  Bloomberg News  November 20, 2009

 

Nov. 20 (Bloomberg) -- New York
<http://www.bloomberg.com/apps/quote?ticker=STONY1%3AUS>  may begin
furloughing or firing state workers in a month if Governor David
<http://search.bloomberg.com/search?q=David+Paterson&site=wnews&client=w
news&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&
getfields=wnnis&sort=date:D:S:d1>  Paterson and lawmakers can't agree on
how to close a $3.2 billion deficit in the current fiscal year. 

Paterson, 55, said cash will run out in the third week of December after
state comptroller Thomas
<http://search.bloomberg.com/search?q=Thomas+DiNapoli&site=wnews&client=
wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p
&getfields=wnnis&sort=date:D:S:d1>  DiNapoli reported that income-tax
collections slipped 21 percent in the past year and the U.S. recession
damped revenue. Payments also will be delayed to schools, towns and
vendors next month without a fiscal plan, Paterson said. 

The governor chided lawmakers, who left the state capital of Albany last
night following four days of unsuccessful meetings, for attempting to
score political points with constituents by resisting his proposed cuts
to education and health care. 

"This is a lot more serious than the interests of some legislators who
would rather go home and be heroes," Paterson, a Democrat, told
reporters in Albany after addressing Americorps volunteers today. 

Paterson proposed
<http://www.budget.state.ny.us/pubs/press/2009/press_release09_deficitRe
ductionPlan101509.html>  $5 billion of cost cuts and one-time revenue
solutions, such as a tax-penalty amnesty, on Oct. 15 that would
eliminate a $3.2 billion deficit in the 12 months ending March 31 and
make a $2 billion down payment toward next year's $6.8 billion gap.
Paterson's plan envisions $686 million in cuts to schools and $480
million in health care. 

Union, Lawmaker Resistance 

Darcy Wells, spokeswoman for the Public Employee Federation, the
second-largest state worker union with 59,000 members, said it has
worked with Paterson to offer buyouts as many as 4,500 personnel. The
federation has also estimated the state would save $417 million annually
by reducing outside consultants and replacing them with state employees.


"We would absolutely fight that," she said in a telephone interview,
referring to furloughs or firings. "Any time you put people out on the
street or on unemployment lines you increase the reliance on government
services, which is what the governor is trying to reduce." 

Paterson said he expects talks with legislative leaders to continue
through the weekend and he hopes a deal may be reached as early as Nov.
23. 

Moody's Investors Service wrote yesterday the state may face a cut of
its Aa3 rating if the deficit is not closed with recurring measures such
as spending cuts and Paterson and lawmakers too heavily rely on one-time
actions such as tax amnesty. 

Contentious Cuts 

Paterson's planned cuts to schools and medical expenses have proven
contentious, as lawmakers argue that education cuts coming in the middle
of school year may leave districts unable to pay bills or will translate
into local tax increases. Democrats hold a 32-30 majority in the Senate.


Senate Democratic Leader John
<http://search.bloomberg.com/search?q=John+Sampson&site=wnews&client=wne
ws&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&ge
tfields=wnnis&sort=date:D:S:d1>  Sampson, from Brooklyn, and Senate
Minority Leader Dean
<http://search.bloomberg.com/search?q=Dean+Skelos&site=wnews&client=wnew
s&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&get
fields=wnnis&sort=date:D:S:d1>  Skelos, a Rockville Centre, Long Island,
Republican, said yesterday that Paterson and lawmakers were "within 24
hours" of an agreement and had consensus on most of $2.9 billion in
deficit measures for the current year. 

"I think we'll get the governor to come around to our point of view as
long as we get to Paterson's total," Sampson said after a leaders'
meeting yesterday. 

The governor declined as recently as Nov. 17 to suggest that furloughs
or workforce reductions loomed. Borrowing to cover the gap would swell
deficits, expected to reach $10 billion over the next 17 months, he said
today. 

--------------


Governor, Senate Democrat Leader, Exchange Letters On Deficit

Empire State News  November 23, 2009

 

ALBANY - Gov. David Paterson is putting more pressure on state lawmakers
to deal with the deficit, by adopting a deficit reduction plan.
Paterson and Democratic Conference Leader John Sampson, traded letters
over the weekend.

 

One month ago, I presented a responsible $3.2 billion Deficit Reduction
Plan that contained reductions across every area of State spending,
including health care and School Aid", said Paterson, in his message. "I
proposed this series of difficult choices to help address the State's
severe revenue shortfall, which could threaten to delay State aid
payments to school districts, health care providers, and local
governments."

 

Paterson cited a report, released Friday, by the Office of the State
Comptroller . 

 

"The State's continuing failure to address its worsening structural
budget imbalance have combined to create a severe cash flow crunch",
Comptroller Thomas DiNapoli states.

 

"Put simply, the State is running out of money", contends Paterson.

 

Moody's Investor Services also issued an analysis of the State's
finances, saying that, "If there is no action taken by the State to
close the gap, or if action is taken but is largely-one-time in nature
(therefore increasing the structural imbalance in the outyears)" our
strong credit rating will be in danger of a downgrade. The Comptroller
has echoed these concerns, imploring the State Legislature not to resort
to "fiscal gimmicks or debt, which would only push the State's budget
problems into the future at a higher cost to taxpayers."

 

In our negotiations to date, Senate Democrats have agreed to more than
$1 billion in cuts to your agencies and in local assistance reductions",
said Sampson, in his message.  "We have advocated cutting with care, and
are committed to working with you in the coming days to balance our
budget in a way consistent with our values and the public interest."

 

A month later, Paterson presented his $3.2 billion Deficit Reduction
Plan containing deep cuts to health care, education, family planning,
and other social services vulnerable constituents depend upon for their
safety and stability.

 

Senate Democrats responded by pointing out what they claim would be a
devastating impact some of your proposed cuts would have on New Yorkers.


"We were the first to identify the damage your proposed $287 million in
Medicaid cuts would have on the health care system", said Sampson.  "The
loss of enhanced federal matching funds would have triggered a total cut
of $758 million - a devastating, job-killing cut in the middle of the
H1N1 health care crisis.

 

"We agree we must put politics aside and put the people of our State
first - and that is exactly what we are doing.  Senate Democrats are
fighting for taxpayers who already pay too much in taxes and fees, we
are fighting for the disabled, we are fighting for family planning
funding, and we are fighting for school kids and our seniors.

 

http://www.empirestatenews.net/News/20091123-1.html 

 

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