Paterson, Back at Work, Says New York Faces Another Cash Crunch

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In his first appearance since he abandoned his campaign to be elected to a full four-year term, Gov. David Paterson told a crowd of business leaders in midtown that the state's most pressing problem was another looming cash crunch.

Paterson said that while next year's $8 billion to $9 billion projected budget gap is a major problem, the state's most pressing issue is yet another looming cash crunch similar to the one New York went through in December, which required that Paterson hold back payments to local schools and municipalities. Paterson says that, depending on how off the state's revenues are, New York may even have to delay sending out income tax refunds.

"We may have to delay payments to school districts again, we may have to delay payments to higher education, and we might have to take the formidable step of actually delaying tax returns by a few weeks," the governor says. Paterson and the legislature have until the end of April to reach a budget deal.

This is the first business day that Paterson hopes will represent the new normal for what will be the rest of his term. But that will be a tall order, with Paterson weathering press scrutiny over a special deal for Aqueduct in addition to an investigation by Attorney General Andrew Cuomo into Paterson's contacts with a woman alleging she was assaulted by a top aide to the governor.

The governor did demonstrate a style shift today, if not a major tone change. He took a more collegial tone, for example, when talking about the legislature. It's clear that Paterson finds it liberating that he is not going to have to engage in the campaign going forward.

Over the weekend, calls for Paterson to resign were eclipsed by a joint statement from Latino and African American elected officials, led by the Reverend Al Sharpton. They pledged to work with Paterson for the balance of his tenor.

Meanwhile, State Sen. Eric Adams and Assemblyman Hakeem Jeffries are set to introduce legislation this week that would investigate ongoing misconduct within the state police.