Governor Proposes New Round of Budget Cuts

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Governor Paterson is proposing $3-billion of budget cuts that he says are “very painful”, but necessary to avoid default. Karen DeWitt has more from Albany.

REPORTER: The governor's plan includes $480 million dollars in mid year school aid cuts, the first since time since the early 1990's that a governor has proposed cutting education funding half way through the school year. Paterson is also seeking $287 million dollars in reductions to aid to hospitals, nursing homes and home health care, cuts that he says he is loathe to propose.

PATERSON: I wonder if you could ever imagine how it feels for me, who's been an advocate for resources in all these areas, to actually participate in these cuts, It is pain that is indescribable. But it is the only way to keep this state from going into default.

REPORTER: Paterson says the state owes billions to schools, property tax payers who benefit under the STAR program, and payments to the MTA, all of which are due in a couple of months.

PATERSON: We do not want to put ourselves in a position of being unable to meet our obligations in December. We're right up against the wall because many of the options we use to close the out-year gaps last year, are no longer available to us.

REPORTER: Paterson also advocates raids on environmental and clean energy funds as well as some state authorities, including Battery Park City and the Dormitory Authority. He says New York should hold another tax amnesty program, and he counts on revenues from the yet to be built gambling facilities at the Aqueduct Race Track. There are no new taxes in the plan.

The governor says he expects "harsh criticism" for his ideas, and within moments, complaints were pouring in.

Billy Easton, an education advocate with the Alliance for Quality Education, says the mid year school cuts will effect the state's poorest school children the most, because less wealthy schools are more dependent on state aid for their budgets.

EASTON: The school children in the poor school districts will be hurt the most, they should be protected, we should look at every other option, including, you know, there's property tax relief programs that are targeted primarily at wealthier school districts, they should not be saved over what's going on in our classrooms in our poorest school districts.

REPORTER: Easton predicts that the plan will be a "difficult sell" in the legislature.

Laura Haight, with the New York Public Interest Research Group, says the governor's proposal to raid $10 million from the Environmental Protection Fund, and $90 million from the Regional Greenhouse Gas Initiative, represents an abrupt turn around from Paterson's past polices.

HAIGHT: The original greenhouse gas initiative comes from auction of credits from carbon dioxide polution issued by power plants. All that money was supposed to be going to fund energy efficiency and clean energy, and now a large portion of it is being proposed to be swept into the general fund.

REPORTER: Haight says New York would be the first state to raid the funds generated by the power companies, and could set a bad example for other states.

Hospitals and nursing homes and home health care agencies are also decrying the cuts, saying they will "destroy" services to the sick and elderly.

But Paterson seems determined to weather the criticisms, and he warned the legislature not to delay in implementing a budget cutting plan.

PATERSON: Not on my watch am I going to allow us to fritter around and make reckless decisions, At a time when the citizens of this state need leadership.

REPORTER: Legislative leaders did not immediately reject any of the proposed cuts. Assembly Speaker Sheldon Silver, in a statement, said the Assembly will hold hearings starting next week.

The Democratic Leaders of the Senate are traveling in China, and did provide a response, but the Senate Finance Committee Chair Carl Kruger said, in a statement, that he wanted to wait for another two weeks until the mid year financial forecast is issued, and then could proceed with hearings.

Governor Paterson says he could call for a special session as early as October 27th. in Albany, I'm Karen DeWitt.