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New York Governor Announces Budget Cuts

POSTED: November 13, 2008, 12:00 am

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Reflecting the nation’s dismal fiscal picture, New York Governor David A. Paterson announced on Wednesday a $5.2 billion, two year deficit reduction plan as the Empire State is facing a $1.5 billion shortfall in the current fiscal year. The State is also projecting a $12.5 billion deficit in the next fiscal year and a projected four year deficit of $47 billion.

In announcing the plan, Governor Paterson said, “The only way we are going to overcome this unprecedented crisis is through shared sacrifice. I look forward to engaging in a productive dialogue with the Legislature about the actions we must take at next week’s special session to address our State’s record budget deficit.”

The governor’s proposed reductions cut across virtually every area of State spending, from education and health care to human services and state workforce projects.

“The only way we are going to overcome this unprecedented crisis is through shared sacrifice.”

Among the many cost cutting measures Paterson in proposing the elimination of $41 million in additional aid for New York City that was added to the 2008-2009 budget; though the state’s largest city will still receive $205 million in municipal aid. Governor Paterson has also proposed a decrease in the rate of growth for school aid by $836 million. The governor is also calling for the elimination of a $3 million operating subsidy for the New York City Housing Authority (NYCHA), currently the only housing authority in the State that receives an operating subsidy.

In addition, the deficit reduction plan calls for reducing funding for grants by the New York State Council on the Arts by $7 million, aid to private colleges and universities by $2 million, and a one time reduction of library aid by $20 million. Consistent with his “share the pain” approach, Governor Paterson has also proposed an increase in tuition at state colleges and universities. Tuition at the City University of New York (CUNY) and the State University of New York (SUNY) will increase $300 in the coming spring 2009 semester and by $600 in the following academic year under the plan. It will be the first increase in tuition at both institutions since 2003-2004. Tuition at SUNY will be $4,950 and $4,600 at CUNY. In a prepared statement the governor’s office pointed out that tuition at both institutions is well below public colleges in the Northeast and Mid-Atlantic regions.

Governor Paterson is also seeking to close six underutilized youth facilities in the state’s juvenile justice system, downsizing two others and closing three evening reporting centers in upstate communities. All told the closings would result in a reduction of 255 full time positions in the Office of Children and Family Services.

In one of the more controversial proposals in the deficit reduction plan is to withhold a 3 percent salary increase previously negotiated with unions. The governor is also proposing that new state retirees pay a greater share of their health care costs and requiring state employees and retirees to contribute to the Medicare Part B premiums. He is also delaying salary payments for five days work of worth during the current fiscal year until an employee leaves State service.

Noting the severity of the cuts, Governor Paterson said, “The unfortunate reality is that many worthy programs with laudable goals, some of which I have supported in the past, will have to experience reductions in funding. These are not decisions I have made lightly. With the State facing the largest deficits in its history, we have no other option but to make these tough but necessary choices. In times like this, government needs to put the public interest ahead of special interests – this budget plan tackles this financial crisis head-on and addresses the State’s collective needs for fiscal responsibility.”

The New York State Legislature is expected to return to Albany on November 18 for a special session to deal with the fiscal crisis.

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