NEW YORK, NY October 21, 2009 —In a public meeting with legislative leaders, Governor Paterson shot down a plan floated by Senate democrats to refinance tobacco settlement bonds. New York State is facing a $3 billion deficit, and needs to come up with revenue quickly. Senators predict their tobacco proposal could raise $500 million. But Paterson says the money isn't guaranteed and couldn't come fast enough to pay bills due this December. “We created phony revenues to finance falsely finance our spending, and we wound up in the place we're in and I'm stopping it,” Paterson said.

A spokesman for Senate Democrats says senators intend to pursue the idea anyway. They say it's better than Paterson's plan to cut education aid in the middle of the school year.