Crisis mode declared on deficit
State is "running out of money,' governor says in plea for cuts
ALBANY — A somber Gov. David A. Paterson on Monday urged a rare joint session of the State Legislature to join him in making the unpopular decisions necessary to erase the state's $3.2 billion budget deficit.
"Frankly, we are running out of money," Paterson warned in a 17-minute address.
The governor has ordered the two houses into a special session at noon today to consider his deficit-reduction plan, which includes more than $1.1 billion in midyear cuts to public schools, hospitals and nursing homes.
"I will endure the heat from the special interests. I will mortgage my political career on this plan, but I will not mortgage the fate of the State of New York," he said. "We cannot borrow or tax our way out of this situation."
Paterson and legislative leaders then met for an hour in the office of Assembly Speaker Sheldon Silver, D-Manhattan, emerging only to say that no deals were made but that talks would continue through the night.
The session was attended by both legislative houses, despite an initial threat by some Senate Democratic leaders to boycott. State Comptroller Thomas P. DiNapoli, who has said the state's fiscal condition might be worse than what Paterson or lawmakers think, attended; Attorney General Andrew M. Cuomo, who may run against Paterson next year, did not.
The governor last week included a half-dozen other items on the agenda for today, including changes to the pension system for future state and local government workers, measures to make it easier for localities to merge services to save taxpayers money and improvements to the much-criticized, off-budget system of state authorities.
But the most ambitious nonfiscal issue — legalization of same-sex marriage — appeared to take a step back as Paterson opened the door for the Senate not to consider the issue today.
In his speech, the bill on same-sex marriage, which has been passed by the Assembly but not the Senate, was the only nonfiscal issue he mentioned.
Paterson told lawmakers that the issue of gay marriage rights "touches on the very core of our citizenship." He added that he wants the issue addressed immediately, noting, "Justice delayed is justice denied."
But after the meeting with legislative leaders, Paterson said, "I didn't specify the day, because we're trying to work on a number of different issues at the same time. But this is the week we're back here, and it's on the special session calendar. And, you know, I've made my case. That's as far as a governor can go. The Senate would have to take it the rest of the way."
The measure on same-sex marriage faces an uncertain future in the Senate, where a number of Democrats in the chamber that the party controls with a razor-thin margin are opposed to gay marriage rights. Senate leaders Monday were noncommittal about whether the bill would be raised on the floor today.
Paterson emphasized that the deficit is the most pressing matter statewide. DiNapoli said, "I think he's reminding everybody what the reality is. The situation is not going to take care of itself."
The governor asked for the joint session to try to convince lawmakers, for what he hopes is the last time, of the magnitude of the state's fiscal plight. He noted that other states have turned to closing libraries, cutting school days and issuing IOU's for state services. New York, he says, risks falling into major cash-flow problems in December unless lawmakers act now.
Paterson's plan calls for closing the deficit through a series of maneuvers, including politically easy sweeps of money from off-budget to the general fund, cuts to state agencies and politically challenging reductions of nearly $700 million to public schools and nearly $500 million to health care.
Schools, for instance, say the midyear nature of the cuts would force them to eliminate classroom programs or teacher positions; Paterson has said that most of the districts have enough in reserve to cover his cuts.
Senate Democrats have been the most vocal in pushing back against the education and health cuts. Senate Democratic Conference Leader John L. Sampson of Brooklyn said his colleagues believe that the deficit is less than what Paterson has projected and want to devise a plan that has "less impact" on individual New Yorkers.
But with more than half the budget funding education and health care, some lawmakers understood Paterson's dilemma. "Jesse James robbed banks because that's where the money is. The [budget] money is in education and health care," said Assemblyman Robin L. Schimminger, D-Kenmore.
Schimminger said he thinks the Assembly should pass Paterson's deficit plan whether or not the Senate joins in. "I think whether he was applauded or not, the gravitas of his message did come through," he said of the speech.
But even before the speech, some lawmakers were rejecting Paterson's approach. Sen. Carl Kruger, D-Brooklyn, chairman of the Finance Committee, said the Senate's "goal" is to reduce the deficit without midyear reductions to schools and health care.
For the governor, the special session and its outcome are a pivotal political moment. After months of sour poll ratings, a White House that doesn't want him to run in 2010, and Cuomo standing in the wings, Paterson — now more than ever — needs to persuade legislators to join him.
"Together, we must make the tough decisions to save our state," he said.
Without pointing fingers at anyone, Paterson delivered a candid response to the din from some legislative corners that the fiscal problems have been overstated.
"Some say the deficit is not even as deep as we have described it. Some say the revenues are coming back, and others say Wall Street will bail us out. I suggest to you that that is wishful thinking, my colleagues," Paterson said. "And we do not have time to engage in it."
As soon as the $132 billion budget was created in April, fiscal critics were warning that it was built on overly rosy revenue projections and inflation-busting spending levels. Monday, Paterson joined in, warning lawmakers against making spending promises that cannot be kept or resorting to "phony solutions" for the deficit.
The Senate took one formal action Monday: appointing a panel to investigate whether to sanction — possibly by expulsion — Sen. Hiram Monserrate, who recently was convicted of misdemeanor assault in which his girlfriend's face was slashed. The panel quickly convened later in the day for an introductory meeting, where lawmakers one by one dismissed claims by Monserrate's lawyers that some of them could be predisposed to act against the Queens Democrat.
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