ALBANY — With a fiscal gun to their heads, state lawmakers took the unusual step

Monday of approving a huge but still incomplete portion of this year's budget: the massive

health care component that accounts for about 40 percent of the state spending plan.

The package calls for about $775 million in health care cuts and other actions that hit

everything from state payments to hospitals to tobacco research efforts at Roswell Park.

With the budget 10 weeks late, Gov. David A. Paterson is turning the heat up on lawmakers

by forcing them to choose between cutting spending for certain programs or shutting down the

state government. After tackling health care Monday, the governor is threatening to force

through cuts to public schools next week if no budget deal is reached by then.

Monday's action was a considerable change from the usual path of not adopting any portion

of the budget until the entire plan is approved in secret.

"This is a new millennium — and a new way to do things," said Assembly Speaker

Sheldon Silver, a Manhattan Democrat.

Just two weeks ago, Paterson used the closing of 55 state parks and historic sites as

leverage to get lawmakers to cut a key environmental protection fund.

But in this election year, a number of contentious areas remain unresolved. They include

how much to cut funding for public schools; whether to borrow to help reduce the projected

$9.2 billion deficit; what taxes, if any, will be raised; and whether to do anything to slow

the increase in property taxes.

As part of the 10th set of weekly emergency bills since April 1, the Legislature voted

Monday night to approve many of the cuts the governor had proposed in January for the health

care industry.

Lawmakers agreed to cut state reimbursement rates to hospitals and nursing homes for

treating Medicaid patients, as well as payments for care provided for people without health

insurance. Funding for a variety of public health programs, such as one focusing on eating

disorders, as well as the state's poison control centers, also was reduced.

The Legislature acted hours after a small but noisy group of health care union members

protested outside the legislative chambers.

"The concern is not only are these cuts injurious by themselves, but are these the end of

the cuts?" asked John Bartimole, president of the Western New York Healthcare Association,

which represents hospitals and nursing homes.

The Healthcare Association of New York State said hospitals and nursing homes already have

absorbed $4.2 billion in various state cuts the last two years. The association and other

health providers have complained for several years that they have taken a disproportionate hit

compared with the other big portion of the budget: education.

"Why us again, and so much?" said William Van Slyke, a Healthcare Association spokesman who

called the cuts in health care "the fallacy of shared sacrifice" that Paterson is seeking from

all sectors that rely on state funding.

Morgan Hook, a Paterson spokesman, dismissed the criticism. "We need [the Healthcare

Association] to acknowledge there's a budget crisis, and so far they haven't seem to do that,"

he said. "All they do is complain about cuts."

But Michael Hughes, a spokesman for the Kaleida Health, said the cuts approved Monday will

mean a loss of about $4 million this year for the big Buffalo-area provider. As for impact,

Hughes said officials in Albany should keep in mind state budget cuts in recent years —

which already have reduced jobs and closed clinics and other facilities.

"It eventually adds up to an impact on patient care," added Hughes, who said he is not sure

how Kaleida will deal with to the latest round of cuts.

"Clearly, health care is a target. But they're going to see pretty quickly that there's

consequences for that," he added.

Besides reductions for hospitals and nursing homes, Monday's health actions include cuts in

state research and other programs involving stem cell, cancer and Red Cross funding. Other

cuts involve programs intended to keep elderly and others needing care at home instead of in

nursing homes, maternal and early childhood health programs and a $7.6 million reduction in

Roswell Park's anti-tobacco program.

The measure also envisions higher revenues — $1.2 billion in all — from

stronger Medicaid anti-fraud efforts. Also, a deal was reached to resume a state pre-approval

program for increases in most private health insurance premiums. Officials predict that will

reduce premiums and, in turn, help keep more people from having to turn to publicly funded

health insurance programs.

Beyond cuts, the measure actually authorizes spending for most of the state's health care

programs for the remainder of the fiscal year.

With Monday's actions, officials said, about $52 billion in health care programs, mostly

Medicaid, now has been approved — nearly 40 percent of the $135 billion or so that the

final state budget is expected to total. In all, since the state began using weekly bills to

fund operations for the fiscal year that began April 1, legislators and Paterson have approved

$63 billion in spending — all without adopting a full-year fiscal plan, state budget

officials said Monday night.

State Sen. John L. Sampson, Senate Democratic Conference leader, declined comment on the

new emergency budget bill.

But Silver, the Assembly leader, said the Assembly had embraced most of the health care

cuts in March. "I don't intend to stop government," Silver said of the choice of going along

with the emergency bill or leaving the state without authorization to spend money.

Lawmakers have little choice: They can't change Paterson's weekly extender measures, and if

they don't approve them the state government is unable to pay its bills.