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Deficit reduction deal does not please all

After more than a month of sparring – both publicly and privately – over the $3.2 billion budget deficit that culminated in a three-way budget deal to reduce the gap, it is still not one big happy family in Albany.

Members of the State Senate and Assembly voted to approve a $2.7 billion deficit reduction plan that included a 12.5 percent cut to local assistance grants, a 5 percent reduction to CUNY and SUNY schools, cuts in education spending without implementing mid-year school cuts, reductions in health care spending and preventing the loss of 12,000 jobs.

“With some exceptions, far better than I ever expected,” said State Senator Toby Ann Stavisky, when asked about what she thought of the agreement. “We were able to resolve almost $3 billion in cuts without imposing any new taxes, without imposing mid-year school cuts, and we reduced the health care spending without losing the health care matching federal funds of approximately $700 million.”

However, Governor David A. Paterson, who was looking for $3.2 billion in cuts and called for further actions to address what he called a fiscal emergency, was not as pleased.

“While the deficit reduction legislation passed by the Legislature provides needed savings, it falls well short of what is necessary to put New York on the road to fiscal and economic recovery,” Paterson said. “It does not fully address our current-year budget deficit. It does not solve our severe cash-flow crunch. It does not address our long-term structural imbalance. And at $2.7 billion in current-year savings, it does not even achieve the $2.8 billion deficit reduction target that some have touted for two days.”

Meanwhile, Stavisky condemned the Governor’s statements, but said they were par for the course.

“None of his criticisms have been fair. If he wanted to be fair, he would not have suggested the cuts he proposed,” Stavisky said.

One of the items included in the deficit reduction plan is at least $200 million that the state is banking on in upfront money for the 2009-2010 fiscal year from a franchise to redevelop the Aqueduct Video Lottery Terminal.

“Now that this [deficit reduction plan] is over the Governor is really going to have to work in earnest to get the Aqueduct deal done,” said State Senator Joseph Addabbo said. “We need that money; we need the jobs; we need to make this decision right away.”

Addabbo said the Aqueduct saga, which has dragged on for years trying to select a bidder to develop the site, should have been addressed earlier.

“I think the Governor should have already made the decision by now, [and] we would have been in a much better situation financially,” Addabbo said.

Meanwhile, another area that saw funding cuts was the MTA – more than $130 million cut from this year’s budget. That reduction, coupled with a $200 million under-estimate in expected revenue from an increase in the payroll tax, could leave the agency more than $300 million short. Although MTA CEO Jay Walder said there would not be fare hikes this year to make up the difference, the agency may have to consider some service reductions or cuts before it votes on its final budget later this month.

 

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