Governor, Legislature fail to act on deficit
Delay shifts focus to bid for federal aid
ALBANY — Gov. David A. Paterson and the State Legislature collectively threw up their hands Monday and scurried out of Albany after failing to act on the state’s worsening fiscal crisis.
They agreed only to solve the problem another day and that the governor would lead a tin cup brigade to Washington today to try to wrangle federal funds to help close the gap they could not eliminate themselves.
Instead of remaining in the Capitol and trying to strike a deal, both sides — split by partisan squabbling and an aversion to deep spending cuts — said they probably will not attempt to reduce spending until later this year but more likely next year.
Paterson estimates the state’s deficit at $2 billion in the fiscal year that will end April 1 and at least $12.5 billion in the following year.
The lack of action surprised even hardened Capitol observers.
“They seem to be avoiding reality,” said Elizabeth Lynam of the Citizens Budget Commission, a business-financed fiscal watchdog group.
After 90 minutes of rhetoric, taunts and finger pointing during an open meeting, Paterson and legislative leaders sought to portray the intransigence in a positive note.
“Maybe we’ve made, amazingly, some progress here,” Paterson said at the end of the meeting, even as rankand-file lawmakers streamed out of the Capitol.
Including pay and travel costs for legislators and staffers, the meeting could cost more than $100,000.
The impasse effectively scuttled Paterson’s call for more than $800 million in midyear cuts in public school aid, big reductions in Medicaid reimbursements for hospitals and nursing homes, state university tuition increases and higher health care costs for government retirees.
Privately, lawmakers were buoyant that they did not have to cut programs that are popular with voters back home or with powerful special interests that pressed hardest for the stalemate.
Lawmakers argued that cutting school aid now would lead to big property tax increases next year.
They also contended that Paterson had options to raise state revenue to offset the need for spending reductions.
The alternatives ranged from collecting taxes on sales of tobacco to non-Indians on Indian reservations to raiding a rainy day fund and signing a final deal with Buffalo’s Delaware North Cos. for a casino at Aqueduct Racetrack in Queens.
Outside groups have called for raising the state income tax on the wealthiest.
For the governor, the session marked a substantial political setback because he was unable to strong-arm politically weakened Republicans or cajole fellow Democrats to back his plan.
It also makes his task of balancing next year’s budget that much more difficult.
His next step involves proposing a budget next month for the fiscal year that will begin April 1 and floating a new plan for the remainder of the current fiscal year. When the Legislature would act on that remained unknown.
The governor had requested that the Assembly and State Senate vote on his plan at Tuesday’s special session. But he drew back after the Republicans who now control the Senate agreed. Such a vote would have sent the plan to defeat in the Senate while posing political risks for Paterson’s fellow Democrats, who now constitute the majority in the Assembly and are set to take control of the Senate on Jan. 1.
Paterson said he did not want to go ahead with an effort he knew would fail.
“I think they thought they had us with our backs against the wall. They don’t realize the old Senate is still not down,” Sen. Dale M. Volker, R-Depew, said of lame-duck Senate Republicans.
With protesters chanting against spending cuts outside the Capitol, Paterson and legislative leaders sparred over who was to blame for the inaction. The session was well choreographed, with some lawmakers reading from scripts.
But the outcome was already known: Rank-and-file lawmakers already had been told they would head home without a deal.
Paterson angrily claimed that, in agreeing to the floor vote, Senate Majority Leader Dean G. Skelos, a Rockville Centre Republican, had “twisted” his words. He lashed out at the GOP lawmaker for not offering counterproposals.
Senate Minority Leader Malcolm A. Smith, D-Queens, called Skelos’ maneuvering a “charade” designed to create the appearance of action.
Later, in the presence of reporters, Skelos declared victory, saying he had persuaded the governor to deal with this year’s and next year’s deficits together — not piecemeal.
The meeting began with Paterson’s warning that failure to reach a deal would lead to a downgrade in the state’s credit rating, which would make borrowing more costly. He also suggested the state could run out of money before March 31.
And after several rounds of harsh words lasting more than 90 minutes, the session ended with warm words from Paterson and even an embrace between the governor and Skelos.
Democrats were united in trying to blame Republican senators for the breakdown.
“We will have to wait until January and we are in the majority,” said Sen. Antoine M. Thompson, D-Buffalo.
“You’ve got to have three partners, and one of those partners, the Senate Republicans, decided they weren’t going to play ball,” added Assemblyman Sam Hoyt, D-Buffalo.
