Deals to tackle $3.2 billion deficit elusive as NY Legislature meets in extraordinary session

No deficit deals in NY Legislature special session

ALBANY, N.Y. — With New York drowning in deepening deficit spending and running out of cash to pay huge bills due next month, the Legislature met in special session Tuesday and put off what Gov. David Paterson called the “tough decisions to save our state.”

Instead of acting on Paterson’s Oct. 15 plan to reduce the $3.2 billion deficit with politically dicey cuts to schools and health care protected by Albany’s strongest lobbies, the Senate and Assembly convened briefly.

Hours later, Paterson set two additional extraordinary sessions for next week to again try to act on the deficit.

“We are about to cross the Rubicon of fiscal responsibility to becoming irresponsible,” Paterson said. “I have come to the conclusion that in the three great lies that people tell we can add a new contender, which is, ‘We’ll work it out and we’ll vote on it when we get to Albany.’ Because it never seems to happen.”

He singled out the Senate’s Democratic majority, which he said “didn’t cut a dime from anybody” and proposed unwise and unrealistic one-shot revenue gimmicks.

“I can’t explain the dynamic of the Senate because nobody can,” Paterson told reporters. “I wish they would start thinking about the people of New York and what’s right for the people of New York. … They’ve got to get in there and reduce this deficit.”

A delay is costly because tax revenues continue to decline as payments are made on unaffordable levels of spending, Elizabeth Lynam of the independent Citizens Budget Commission said.

“Despite the best efforts of the governor … the message still hasn’t gotten through” to legislators, she said. “They seem to have forgotten the main purpose.”

Some of the fiscal year’s biggest bills — including school aid disbursements and payments to the pension fund — are due in December.

“It’s not surprising, but I guess it’s part of the perpetual disappointment,” Lynam said of the Legislature.

“Unless immediate action is taken,” Paterson told lawmakers Monday in a rare joint session of the Legislature, “we will have challenges to our state’s finances and to our cash flow in four and a half weeks.”

Assemblyman James Tedisco, a Schenectady County Republican, said Monday’s joint session that consisted of Paterson’s speech on the need to act and Tuesday’s extraordinary session cost taxpayers $24,000 an hour.

“Taxpayers are being insulted by being forced to pay $142,000 for what turned out to be a very ‘ordinary’ two-day legislative session in which nothing of importance was accomplished,” Tedisco said.

Without action, Paterson said, the 2010-11 budget due April 1 will face a $10 billion deficit. The budget adopted in April was about $131 billion.

Lobbyists, including the Greater New York Hospital Association and the New York State United Teachers union, kept pressure on lawmakers.

“We need to stop Gov. Paterson before it’s too late,” warned one health care advertisement, also saying workers and communities shouldn’t suffer more cuts in services. “Enough is enough.”

A New York Daily News editorial called the fiscal crisis “the functional equivalent of bankruptcy,” while the Democrat and Chronicle of Rochester said, “New York is living beyond its means. When citizens do that, they cut back on their expenses and give up things or eventually go bankrupt.”

Paterson’s deficit reduction plan includes cutting 4.5 percent in school aid for the remainder of the year and about a 10 percent cut in other areas, including aid to hospitals and nursing homes. State school aid is among the richest in the country, with 70 percent going to salaries and benefits. Yet the state’s top court has ruled the state had still underfunded New York City schools. That resulted in promises to increase funding for lower-income, urban schools.

Similarly, health care — primarily through Medicaid — is one of the state’s biggest programs and is richer and provides more services than most states. But cuts to it have already resulted in hospitals closing statewide, removing major community resources and sources of jobs for powerful unions that argued cuts were counterproductive during a recession with rising unemployment.