Schenectady officials were staggered Monday to read the list of possible state aid cuts that could leave the city with a $700,000 hole in this year’s budget, reduce the Project Impact budget by 6 percent and could force the county to pay for more of the cost to run the Glendale Nursing Home.
Mayor Brian U. Stratton asked all city residents to write to their state representatives and beg them not to cut state aid. He is also drafting a letter with the City Council in reaction to Gov. David Paterson’s proposal.
“The governor tells me he has laid out more options than are needed,” Stratton said. “I think we should urge the Legislature to look at other options.”
Paterson has called back the state Legislature for a special emergency economic session Aug. 19 to help close a projected $6.4 billion budget gap, said Matt Anderson, spokesman for the Division of Budget.
Paterson wants the Legislature to cut at least $600 million in state spending this year. He offered a list of $1 billion in possible cuts for the legislators to consider.
The second-largest proposed cut is a 6 percent reduction in all state aid for the remainder of this year. That would save the state $250 million that had been earmarked for local governments, nonprofit providers, and “anyone who receives aid from the state,” Anderson said.
Paterson is exempting entitlement programs such as school aid, welfare, counties’ share of Medicaid costs, child welfare, youth detention and special education from the chop list. This leaves open for cuts dozens of programs such Project IMPACT, local child support administrative costs, the Tuition Assistance Program and foster care block grants, according to a 10-page list provided by the budget office.
“It is an across-the-board reduction. These difficult times require specific action,” Anderson said.
Other options include a 50 percent reduction in member items, grants handed out by individiual legislators. That would save $100 million in the current budget.
Paterson said the Legislature could also reduce spending for new legislative and executive programs by $132 million. He also proposed controlling the growth of Medicaid and other health programs, such as nursing homes and home care, by $506 million, and reducing funding for the City University of New York by seven percent, saving $51 million.
In addition, he is proposing an additional $1.6 billion in cuts in the 2009-10 state budget.
“If these savings were enacted in full, the 2009-10 budget deficit would be cut from $6.4 billion to $3.7 billion, a 41 percent reduction,” Paterson said in a press release.
Stratton, who made unpopular spending decisions while dealing with Schenectady’s deficit, was willing to support Paterson’s initial proposal for a 2 percent cut in the city’s state aid.
But, he said Monday that he can’t support a 6 percent cut — particularly for this year, when the money has already been budgeted.
“I applaud the governor for acting quickly,” he said. “But it would cause a reduction in our services, it would jeopardize our financial situation … We cannot afford a $700,000 cut in 2008 and $1.2 million, maybe more, in 2009.”
He said he was already faced with tough choices for the 2009 budget before the governor’s proposal.
“The rising energy costs and fuel costs, and the county’s fiscal situation that could reduce grants for hazmat and community policing, have already made budgeting a challenge — more of a challenge than it’s been in the last two years,” Stratton said.
Councilman Mark Blanchfield added that the cut will hurt Schenectady more than other municipalities because the city has historically received less state aid than other cities of similar size.
“This is like taking a meal from someone who’s already starving,” he said. “It will compound the inequity. It pushes more cost down onto the property taxpayer.”
At the county level, the proposal calls for significant reductions in state funding for dozens of local programs and services ranging from nursing homes and home care to foster care and assistance to the mentally disabled.
Saratoga County Administrator David A. Wickerham said cuts in aid to county programs aren’t really saving money, since the county must still provide the services and pay their costs regardless.
“As long as they’re mandating services we have to provide, all they’re doing is shifting the expense from the state income tax to the local property tax,” he said.
The county-operated nursing home, Maplewood Manor, already is expected to lose about $8 million this year before the proposed Medicaid cuts, Wickerham said.
“I can only assume the state is sending us a message that they want everyone out of the nursing home business,” Wickerham said. “As far as cutting expenses, we’ve squeezed the towel dry.”
Mark LaVigne, of the New York State Association of Counties, said the proposal jeopardizes optional programs, which the counties could cut back on so they could afford to continue expensive required programs. He also predicted that counties would have to raise taxes.
“Counties that have nursing homes are already operating in a deficit situation. So any cuts to nursing homes will add to their deficits and increase county reliance on taxes to close those gaps,” he said.
Schenectady County, for example, is providing an annual subsidy to the Glendale Home of approximately $7 million this year.
Stephen J. Acquario, executive director of the state association, added, “We still have to spend taxpayer money to deliver the state’s programs. We just have less of the state’s funding to pay for it. If we are going to make the hard choices than we need to be reducing state programs and services, not simply shifting more costs to property taxpayers.”
Assemblyman George Amedore Jr., R-Rotterdam, said he is also concerned the governor’s proposed cuts would shift state costs to county governments. “If the state cuts funding to counties, who is going to fund the programs and what is going to happen to them?” he asked.
“Property owners can’t afford to pay any more than they already are. This is something I would be extremely concerned about if the state Legislature or governor says it’s up to the counties to fund these programs.”
The cuts also could affect nonprofits, such as Cornell Cooperative Extension and Boys & Girls Clubs, that receive local assistance aid.
Paterson argued that although the cuts will not be easy to make, spending must be reduced quickly.
“If the economy continues to worsen, the spending reductions I have proposed will be necessary to help ensure the current year’s budget remains in balance. Either way, the longer we fail to act, the more painful and limited our choices will be,” he said in a press release.