Paterson fears budget may not work
ALBANY — Even before the final votes have been taken to enact the 2009 state budget, Gov. David A. Paterson on Wednesday said he fears the new fiscal plan could be in jeopardy because of the recession.
“I think that we could lose $3 billion to $4 billion more — because we lost $4.7 billion in the last two months,” Paterson said of the state’s deficit, which has been worsening since last year.
The governor said his administration is already making contingency plans for the new budget because of the recession’s erosion of tax revenues. Further tax hikes and spending cuts are possible.
The concerns of the governor, who crafted the budget in secret with two Democratic legislative leaders, were amplified by State Comptroller Thomas DiNapoli, a former Democratic assemblyman. The budget “does not adequately respond to today’s economic realities,” DiNapoli said.
He questioned whether the massive tax hike package—more than $8.3 billion— will generate the projected revenues, due to the weak economy.
“This is essentially a buy-time budget, based on a hope that the economy recovers quickly. It’s a very fragile basket to place all the taxpayers’ eggs in,” the chief fiscal officer of the state said.
Paterson this week said if the budget is revisited in the months ahead, it could mean another round of social service cutbacks and a return to the package of “nuisance” taxes he proposed — on items ranging from Internet music downloads and movie tickets to soft drinks — and which was later rescinded.
Wednesday, the governor said if the 2009 budget does not hold together, it could require cutting beyond the muscle and into bone. “But we’re on the line now. We’re in the place where if you cut any further, you’re really threatening the education of children, the safety of patients’ health care, the availability of housing for those that can’t afford it and employment issues,” he said in a Capitol hallway interview.
It is highly unusual that the governor and state comptroller would raise yellow flags even as the budget is still being debated.
Fiscal experts last week said the state could have better positioned itself if it had saved more over the years in a rainy-day fund to pay down the deficit instead of turning to things like health care cuts and a major tax hike.
Paterson said concern that the budget might not hold “is one of the more legitimate points” about the deficit situation.
He added that he wanted to add a few billion dollars “to create a cushion” in case the deficit does grow. But that did not happen in the final budget deal with lawmakers. The rainy-day fund remained flat at $1.2 billion.
The fact that the budget is not certain to remain in balance justifies the $6.5 billion in budget cuts, the $4 billion personal income tax surcharge on taxpayers starting at incomes over $200,000, and the use of nearly $7 billion in federal stimulus money. The budget failed to remain in balance several times during the 2008 fiscal year. Wednesday, budget deliberations in the Senate were thrown into chaos again as a Westchester Democrat — whose vote is needed to pass the budget — had to return to a nearby hospital for the second day in a row.
Sen. Ruth Hassell-Thompson, who was diagnosed with pneumonia Tuesday, stayed out of sight most of Wednesday during more than four hours of Senate deliberations. She was holed up in the lieutenant governor’s office but was taken to a hospital in an ambulance shortly after 3 p. m.
The budget votes can’t proceed because it takes 32 votes to pass each of the nine pieces of legislation in the plan. There are 32 Democrats and 30 Republicans; no GOP lawmaker is voting for the budget. The Assembly, which is controlled by Democrats by a 109-41 margin, passed the budget bills Tuesday night.
Senate sources said Hassell- Thompson was undergoing an MRI on Wednesday night in Albany Medical Center to determine if she may have had a transient ischemic attack, which is also known as a “warning stroke.” Lawmakers described her as appearing disoriented when she left the Capitol.
Senate Democrats were looking into the possibility of employing a procedure known as “unanimous consent” to get the budget adopted. Under that process, Hassell-Thompson, if she is physically able to and with doctor’s consent, could come back to the Capitol for a brief time at some point today or in the days ahead and be permitted to vote once and have the vote counted for all the remaining budget bills.
A Senate lawyer called it unprecedented. It would require the approval of all senators, including the 30 Republicans, and the suspension of rules intended to ensure senators are in their seats when voting.
Senate Republicans said Democrats at first asked if they could provide any GOP votes to get at least the one bill passed that was being debated at the time Hassell-Thompson was taken back to the hospital. The idea was rejected. Next, Senate GOP sources said, the Democrats asked if a video hookup could be set up between the hospital and the Senate floor to permit her to vote. That idea, said to be illegal, also was rejected.
After a couple of hours of uncertainty, the session then was called off Wednesday evening, with lawmakers due back this morning to try again.
“We have every expectation that the senator will be back [today], but our only concern is for her health,” said Austin Shafran, a Senate Democratic spokesman.
The Senate did manage to pass one of the nine budget bills Tuesday night, but only after Hassell-Thompson was brought back to the Capitol in an ambulance to cast her vote—as paramedics stood outside the chamber.
Besides wondering when the budget will actually be passed — the deadline was Tuesday — all eyes are now on April as a major indicator of whether things might improve or drastically worsen for Albany.
Besides being the month when tax returns—and income tax payments—are due, April is also the month when quarterly estimated tax payments are made by self-employed individuals or those who do not have enough tax withheld from their paychecks. The governor’s budget office said 15 percent of the state’s receipts come in during April.
The new budget also calls for:
• Closing six youth detention facilities, including the Cattaraugus Residential Center and Great Valley Residential Center in Cattaraugus County.
• Maintaining the annual $3 million payment to the Buffalo Bills, first made during the Pataki administration as part of a deal to help retain the team in Western New York.
• A scholarship program for dependents of those who were killed in the crash of Continental Connection Flight 3407 in Clarence Center.
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