Senate Fails to Break Deadlock, City Could Lose $70 Million

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New York finds itself this morning, in what Mayor Bloomberg calls "uncharted waters."

With the state Senate still deadlocked -- several crucial pieces of legislation expired at midnight -- including mayoral control of city schools.

Governor Paterson ordered senators into one last special session, hours before the midnight deadline, in a last-ditch effort to force them to work out their leadership dispute and vote on over 50 pending bills. But the Senate adjourned after Republicans, led by Senator Dean Skelos, again refused to recognize any Democrat as the chamber's presiding officer.

SKELOS: Despite the fact that we don't formally recognize you as the acting president, we move that this extraordinary session be adjourned.

The Senate has been split since a June 8 leadership coup by Republicans and dissident Democrats.

City schools now revert to the defunct Board of Education system. And because the Senate failed to pass the city's half-percent sales tax increase, the city stands to lose up to $70 million this month. If the Senate standoff continues through the summer, the city may have to re-open the budget to make up for the shortfall.

Democratic senators are insisting that dozens of bills they passed in their own separate session yesterday are valid, because one Republican senator was in the chamber, giving them a quorum. But that senator disputes that he was present, and Governor Paterson is refusing to sign the bills.