Faced with the doomsday scenario of running out of money before Christmas, assemblyman in New York got together and produced–nothing that would reduce the state’s $3.2 billion spending gap.
New York state legislators took no votes on erasing the state’s $3.2 billion deficit…Legislators spent the day in closed-door meetings, attempting to hammer out a budget plan that can win a majority of votes.
Gov. Paterson called for Tuesday’s special session on Monday, warning that the state would have to spend every dollar it has when its $6 billion payment comes due in December–and that still will not be enough. Gov. Paterson called for some dramatic action that will negatively impact interest groups in the public sector, especially teacher’s union:
The focus is on cuts in health care and school spending that Paterson has suggested, prompting rebukes from powerful labor unions and industry lobbyists…Sixty percent, or $1.8 billion, of Paterson’s budget-balancing plan consists of controversial spending cuts in school aid, Medicaid reimbursements to hospitals and state operations. The rest would come from one-time raids of unused state funds and an expansion of investigations into Medicaid fraud.
The governor emphasized that such cuts would be hard to make, but that the state could not go on borrowing money and increasing spending, as it did at the start of the recession.
Paterson continues to remind legislators that the state cannot afford to borrow money to erase the budget gap. He singled out Senate Democrats for being unwilling to suggest any spending cuts, instead favoring more one-time actions to boost revenue, such as refinancing bonds.
“That’s what got this state into such a huge hole,” he said. “We’d just blissfully gone along with increases in spending, and we’re finally meeting our day of reckoning.”
The assembly will meet again next week to try to take another whack at making the needed cuts.
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