State leaders near deal to cut spending by $1 billion

Gov. David Paterson and legislative leaders were nearing a deal today to cut state spending by about

Gov. David Paterson and legislative leaders were nearing a deal today to cut state spending by about $1 billion.

Although the deal wasn’t final, all sides appeared near a compromise around the $1 billion mark over two years. Details of what would be cut were expected to be released by this evening.

The governor said he expects the Legislature to agree to much of the $600 million in cuts he’s targeted for the current $122 billion budget. But the rare cut during a fiscal year could be part of a broader agreement to commit to cutting as much as $600 million in state spending in each of the next two years.

Assembly Majority Leader Ronald Canestrari, an Albany County Democrat, said the deal in the works would cut about $1 billion in spending over two years, including $500 million to $600 million in the current year. He said aid to local governments and Medicaid aid to hospitals and health care facilities would be mostly protected. Local officials had said cuts to their state aid would likely trigger local property tax increases, and health care lobbyists said cuts would increase patient costs.

Assembly Speaker Sheldon Silver said negotiations continue.

Senate Majority Leader Dean Skelos, a Long Island Republican, said he expects $400 million to $500 million to be cut from the current 2008-09 budget, and perhaps more. He also acknowledged talks with Paterson to commit to future spending reductions. He said $1 billion or more could be saved over the next two fiscal years.

“This is the beginning,” Skelos said.

Cuts during the fiscal year and commitments to reduce spending in coming years are rare in Albany, where annual spending in recent years increased at two to three times the inflation rate.

“I think it’s a start. They are recognizing there is a problem,” said Elizabeth Lynam, deputy research director of the Citizens Budget Commission, an independent fiscal and government watchdog group. But she said the Legislature and governor need to get beyond across-the-board cuts to make the biggest programs — education and Medicaid health care — more efficient and affordable.

Paterson said talks could continue for days following the emergency economic session he called Tuesday, but he believes a turning point of responsibility and courage to stand up to special interests has begun in Albany.

“The winds of change have hit Albany,” Paterson told The Associated Press.

“In the last three weeks, the Legislature has shown a metamorphosis,” Paterson said in the AP interview from his office in the Capitol. He noted that some lawmakers bristled at his unprecedented televised address to New Yorkers last month and criticized his comment that they were “on vacation” while billions of dollars in deficits deepened.

But he said in the last two weeks lawmakers from both parties, while debating his proposed cuts, offered other spending reductions. He said he anticipates a deal within a week to cut $300 million to $400 million from the current budget.

If the Legislature doesn’t, and deficits mount for the rest of the year, he said lawmakers will be haunted by his warnings and the fact that they didn’t act. But he expects cooperation.

He said lawmakers, long criticized as beholden to special interests led by public employee unions, are standing up against the pressure this election year. He also said the special interests seem to have overplayed their hand by buying more than a $1 million in ads opposing his cuts and by withholding important union endorsements from lawmakers if they cut education or health care funding.

Meanwhile, the halls of the Capitol were filled with chanting by people opposed to any cuts in their health care programs. People in wheel chairs also held a protest outside the governor’s office.

Paterson also said his rising approval rating, as reflected in statewide polls, has helped give him the authority to force fiscal restraint on Albany, which for decades has been known for little of it. But he said he would have done it anyway because it was the right thing to do.

“I am staking my own personal reputation and career on this,” Paterson said.

In March, Paterson got the Legislature to agree to cut $500 million from the budget presented by previous Gov. Eliot Spitzer. Paterson cut another $630 million from his state agencies this spring to close the state’s first deficit this year.

Categories: Schenectady County

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