BEHIND THE HEADLINES
Is Paterson’s deficit warning being heard?
The governor’s call to cut spending has the public’s attention, but he has yet to convince state lawmakers of its urgency.
ALBANY — Gov. David A. Paterson reacted with shock to last week’s headlines about the fiscal crisis in California that forced Gov. Arnold Schwarzenegger to eliminate 22,000 state jobs and slash to minimum wage the salaries of 200,000 remaining government employees.
“I cannot imagine cutting the state work force to minimum wage,” he said. “However, the desperate situations in California should serve as a warning.”
While New York’s budget dilemma is not nearly as dire as California’s, Paterson has spent the past two weeks alerting anyone who would listen to his singular message: The state is looking at a worsening fiscal storm that must be dealt with now.
Those least moved by his clarion call are those Paterson needs the most — legislative leaders who greeted his warnings with a ho-hum and lines-in-the-sand declarations for government programs they refuse to trim.
The response, the governor believes, could haunt the state. “They might want to reassess the whole thing,” Paterson, noting California’s problems, said of those wanting to take a wait-and-see attitude.
Over the past two weeks, the governor has taken his cut-now campaign from Albany to Buffalo to Washington.
“My message is definitely getting through to the public,” said Paterson, who seems less convinced that legislators are really listening. “The public can assess what everyone is saying, and the public can assess who will be right.”
In the coming months, New Yorkers will get to see if their governor is truly up to the task of persuading his former colleagues in the Legislature to join him in erasing spending — a task lawmakers loathe, particularly in an election year.
Should he fail, Paterson risks not only bigger fiscal problems next year when deficits are going to be far worse, but also a political fallout that could haunt him for the rest of his term in office.
The outcome will shape everything from property tax levels and public school programs to the condition of roads to staffing levels at nursing homes and even how many hours state parks are open.
To help his cause, Paterson has sought to engage the public.
“I’m trying to arouse the public interest because I think the public should know,” he said.
Whether a governor who has been in office less than five months can rally the public will be determined on Aug. 19, when both houses return for a rare midsummer session in an attempt to erase $600 million in spending that lawmakers approved in April, when they adopted the state’s 2008 budget.
The session also will serve as training for what is coming next year, when the state is looking at a projected deficit of $6.4 billion. Still, few expect the $600 million Paterson and lawmakers will try to shave to cause panic in the streets. But there will be some noticeable and painful cutbacks.
Albany has a long tradition of fiscal sleights-of-hand to soothe wounds otherwise caused by real spending cuts — such as swapping funds from off-budget accounts to the main state budget fund, “re-estimating” what services are expected to cost and simply delaying payments to everyone from local governments to vendors.
The governor has already met resistance to his characterization of the budget problems as a “crisis.” The leader of one top public employee union, whose group wields enormous influence in the Legislature, dismissed Paterson’s idea of reducing the work force as “a sham.”
And Senate Majority Leader Dean Skelos, a Republican, accepted Paterson’s description of the fiscal problem but then mentioned several costly programs — such as education — as ineligible for cutbacks.
In the Assembly, controlled by Paterson’s fellow Democrats, the list of untouchables is even longer. The Assembly is ready to start talking about next year’s fiscal problems, but, according to Assembly Speaker Sheldon Silver, wants to take a wait-and-see approach before acting to cut spending in the current budget. He believes more time will give a better picture of the economy.
“The first obstacle for the governor is getting everybody to believe the problem is real and serious,” said Dall Forsythe, budget director under former Gov. Mario M. Cuomo, who oversaw a far worse fiscal crisis that stretched from 1989 to 1991.
Forsythe praised the governor for moving now to head off a deeper problem next year.
“Elected officials historically have waited until the impact was much more tangible than this,” he said.
The state, Paterson said with the release last week of a first-quarter report, is facing a $630 million deficit in the budget for the current fiscal year, which ends in eight months. By law, it must be erased.
Paterson will close the gap with a hiring freeze and 7 percent cuts to agencies that will be outlined this week. In addition, he has asked the Legislature to trim another $600 million as a hedge against future fiscal news that could be worse.
Even if things stay as they are, he said, the additional $600 million he is asking lawmakers to cut on Aug. 19 can go to decreasing next year’s deficit, which is already projected at $6.4 billion.
The $630 million is modest in the framework of a $122 billion budget, and lawmakers have erased far greater deficits in the past.
Accused by some of jumping the gun, with just a third of the fiscal year expired, Paterson finds himself facing an entrenched Legislature not nearly as nervous as he is.
Forsythe, for instance, said that Paterson’s recent budget numbers show that while the deficit is growing, overall revenue projected for the state operating portion of the budget actually arrived as expected for the first quarter of the year.
“The difficulty is the impact has not yet shown up in the numbers. Until it does, people are going to say, ‘That’s all very interesting, but let’s wait,’ ” he said.
Paterson noted he is sympathetic to the Legislature’s concerns about cutting. “It’s a legitimate point of view the Legislature has,” he said. “The only problem is, the only other way to address this is to borrow, and we are already hopelessly into debt.”
The governor ruled out borrowing to erase the deficit.
