Gov plans deficit reduction, critics protest

BY NOAH ROSENBERG

Wednesday, October 28, 2009 2:52 PM EDT

Governor David Paterson has come up with a plan he says will erase the state’s “historic” deficit while instituting key structural reforms, improving the state’s long-term fiscal health and avoiding an increase in taxes.

In announcing his two-year $5 billion Deficit Reduction Plan (DRP) on Monday, October 19, Paterson solicited the cooperation of his colleagues in the state legislature. Rumors abound that the Governor will call a special session at the end of the month to push his proposal forward.

The plan, which would have an initial $3 billion impact in 2009-10 and an additional $2 billion impact in 2010-11, centers on across-the-board spending reductions. The $1.8 billion in spending cuts would include $687 million in school district reductions; $287 in Medicaid cuts; $184 million in other health and mental hygiene program reductions; a $28 million cut to social service programs; a $62 million reduction in higher education programs; and a $125 million cut to transportation initiatives, among others.

Additional elements that will contribute to the Governor’s DRP include a tax penalty forgiveness program, which would encourage individuals to resolve unpaid claims by partially forgiving accumulated penalties and interest; payments from the proposed Aqueduct Video Lottery Terminals; a regional greenhouse gas initiative; and excess revenues from the Battery Park City Authority and the Dormitory Authority.

“During a time of uncommon difficulty, we need to work together for the common good and enact a consensus plan that helps us avoid the severe consequences faced by other states that failed to swiftly address their budget problems,” Paterson said in a statement.

Meanwhile, groups in Paterson’s crosshairs are rallying to action. The Alliance for Quality Education (AQE) and the Campaign for Fiscal Equity (CFE) called such drastic cuts to education “unacceptable.” The reductions, said AQE executive director Billy Easton, “would send us backward at a time when two years of statewide improvements in test scores and graduation rates show that money really makes a difference.”

“Times are tough,” said CFE executive director Geri Palast, “but leadership requires vision and commitment to our fundamental priorities.”

For his part, Paterson acknowledged that his plan calls for “hard and painful choices.” But, he went on, “that is exactly the type of leadership New Yorkers deserve from their public officials.”