Ed Cox, son-in-law to late President Richard Nixon, appears to be moving closer to running for state GOP chairman in the fall, sources close to him said.

“County chairman and former McCain delegates have been calling on Ed Cox to take a much more aggressive stance with the state Republican Party, meaning run for chairman, and Ed has agreed to sound out other Republican leaders as a way of going for the position at the state convention,” said Bill Nojay, a Rochester-area delegate for John McCain last year who is close to Cox.

Cox, who was the state chairman for the McCain campaign last year, has been talked about for a variety of elected and unelected positions over the years. He briefly ran for U.S. Senate in 2005 and has been discussed as a potential gubernatorial candidate.

Cox is expected to become more active in asking county GOP chairman for their support in advance of a western New York GOP fundraiser in Livingston County in a few weeks.

Cox would be challenging current state GOP chairman Joseph Mondello, the Nassau County chairman, for the post. Mondello has indicated he plans to seek re-election at the party’s convention in September.

Cox referred calls to adviser Tom Basile, who said, “It’s something being considered. He has been approached by several party leaders as well current and prospective donors to the party to consider running for chairman.”

   Following yesterday’s news that New York is facing a $2.1 billion budget gap, Assembly Minority Leader Brian Kolb, R-Canandaigua, is renewing his call for a meeting with Gov. David Paterson and other leaders of the Senate and Assembly. The last leaders’ meeting was 58 days ago, Kolb said in a statement.

   “As New York’s economy continues its alarming downward spiral, we cannot afford to wait until September, as the governor suggested yesterday, to outline and enact specific cost reductions for achieving the savings needed to bring New York’s budget into balance,” Kolb said.

   “The expanding budget deficit projections, declining state revenues, and 854,200 unemployed New Yorkers, the most since 1976, should serve as impetus for Governor Paterson to immediately convene a public leaders’ meeting as I have continually called for,” he said.

   In breaking the news of the budget deficit yesterday, the governor said he and Richard Ravitch, lieutenant governor, would be drafting a proposal on what cuts to make. It will be finished in September, and Paterson plans to call lawmakers into a special session to vote on the plan.

   Here’s a response from Paterson spokesman Morgan Hook:
   “Governor Paterson is working with Lieutenant Governor Richard Ravitch to develop an Economic and Fiscal Recovery Plan that will eliminate the current-year budget deficit and improve the State’s long-term fiscal health. Governor Paterson welcomes Minority Leader Kolb’s suggestions and looks forward to working with the leaders of the Legislature throughout this process.”

   Left unchecked, the state budget deficit will grow to $4.6 billion in 2010-11, $13.3 billion in 2011-12 and $18.2 billion in 2012-13, according to the state Division of Budget.

With the financial markets on the rise, the value of the beleaguered state pension fund is also up—7.7 percent, in fact, for the first quarter of the fiscal year, Comptroller Thomas DiNapoli reported today.

The fund, which pays the pension benefits for state and local government employees, is up to $116.5 billion, up from $109.9 billion in DiNapoli’s year-end report in May. The first quarter of this year ended June 30.

“We’re seeing some encouraging signs in the public markets, but we’re not out of the woods yet,” DiNapoli said in a statement. “It is good to see positive growth in the Fund after an especially challenging year for all investors. We are cautiously optimistic that the markets will continue to strengthen in what appears to be an improving economy.”

Attorney General Andrew Cuomo, a possible gubernatorial foe to Gov. David Paterson next year, said today that Paterson’s late-night partying Thursday was “totally appropriate.”

The Daily News and the New York Post reported this morning that in the hours before Paterson was set to announce the state’s declining fiscal condition Thursday, he was out until the early morning at the Manhattan nightclub Taj to celebrate the birthday of BET executive Rhonda Cowan, who is Paterson’s friend.

Also in attendance was rap impresario Russell Simmons and popular hip-hop deejay Funkmaster Flex.

But Cuomo, who may seek to run for governor himself next year, declined to knock Paterson.

“I don’t know the facts and the circumstances of the situation,” Cuomo said on Fred Dicker’s radio show this morning.

“The way I heard it, you know, what the governor was doing was totally appropriate. He was at a party, he was celebrating somebody’s birthday. He’s come to birthday celebrations for me. So from the facts that I heard, I thought it was totally appropriate.”

Cuomo went on to reiterate that he’s only focused on doing his job as attorney general, not politics. (He didn’t mentioned that he raised a whopping $5 million in campaign cash over the last six months.)

“I do my job better, I believe, when I stay away from the politics,” Cuomo said. “I work in a bi-partisan way, I’ve gotten a lot of legislation passed with Republican support.”

   The Associated Press is reporting that a mid-level appeals court ruled today that Richard Ravitch can continue serving as lieutenant governor until a lawsuit over the constitutionality of his appointment is resolved. There is one caveat—he is not authorized to preside over a Senate session. (The Senate is scheduled to meet in special session next week to take up the issue of New York City school governance.) The next court date is Aug. 18.

   Gov. David Paterson appointed Ravitch as lieutenant governor July 8, a month after a leadership coup that had paralyzed the Senate. The Senate dispute was resolved the next day, with Democrats taking control of the chamber after Republicans and two Democrats had put the GOP in power.

   Also on the next day, Senate Minority Leader Dean Skelos, R-Nassau County, and Sen. Pedro Espada, D-Bronx, filed a lawsuit challenging Paterson’s appointment. (Espada participated in the coup but ultimately went back to the Democratic conference.)

   A state Supreme Court justice in Nassau County had ruled that Ravitch could not serve as lieutenant governor until the lawsuit was resolved. Lawyers for Paterson and Ravitch went to a mid-level appeals court to protest the prohibition on Ravitch serving as lieutenant governor. Last week, the appeals court shot down the ban on a temporary basis. Today’s ruling extends that decision.

   Paterson said today that he wants Ravitch to work with him on a plan to eliminate the state’s $2.1 billion budget gap. The governor said he and Ravitch would present a recommendation to the Legislature this fall. Paterson has said he would call the Legislature into a special session on the budget in September.

   State Comptroller Thomas DiNapoli said the $2.1 billion projected deficit announced by Gov. David Paterson’s Budget Division today illustrates a bad habit New York has—spending money it doesn’t have. The comptroller said he brought up concerns in April about the budget.

   Here’s a statement the comptroller released this afternoon.

   “The governor’s Updated Financial plan confirms the concerns I raised in April when the state budget was adopted. New York has a very real and growing problem, and the state still has not made enough progress toward aligning recurring spending with recurring revenues.

   “The June cash report my office released last week indicated weaknesses in revenues for the first quarter that were offset by one-time payments and delayed spending. Those weaknesses have not been diminished.

   “The governor and Legislature need to focus on addressing this year’s problems. But they also have to look at the real and difficult choices necessary to solve New York’s bad habit of spending money we simply don’t have.”

Assemblyman Richard Brodsky, D-Greenburgh, Westchester County, was not about declare defeat today after a state Supreme Court judge in Albany ruled today that the New York Yankees do not need to comply with a broad subpoena issued by Brodsky about the new Yankees stadium.

Brodsky said that, “While we disagree with that conclusion, we remain committed to the conclusion of our investigation and are carefully examining the decision before announcing our next steps.”

He said the judge’s decision did confirm that the investigation by the committee he chairs, the Assembly Corporations, Authorities and Commissions, can legally subpoena the Bronx Bombers over the estimated $4 billion in taxpayer subsidies to build the new ballpark.

In a statement, Brodsky concluded, “Our examination of the decision and our own determination of what next steps are in the public interest will be based on our conviction that the truth must eventually come out, that the Legislature must pursue changes in law in this area, and that relevant documents are needed to that reach that goal.  We will announce our decision shortly.”

Brodsky has been hammering the Yankees over the use of taxpayer dollars to build the new stadium, taking the fight to court to order the Yankees to produce thousands of documents.

Members of the Westchester County Conservative Party, who have accused leaders of forging signatures to get Democrats including County Executive Andrew Spano on that ballot line, want the state’s chief Conservative to get involved. They’re asking New York State Conservative Party Chairman Mike Long to call for a criminal investigation into the matter.

“The integrity of the New York State Conservative Party, indeed, of the entire democratic electoral process in the state, is being jeopardized through what appears to be outright fraud in Westchester,” said Hugh Fox, Westchester Conservative Party corresponding secretary. “Forgery is a crime, and there is very good reason to believe that forgery is involved here. The rank and file Westchester County Conservatives are asking Chairman Long to request a formal criminal inquiry into this process.”

Westchester Conservatives have filed several lawsuits against party leaders alleging fraud and misusing proxy or weighted votes during two conventions.

The state Senate announced today that it will return to session next Thursday at 10 a.m. to tackle mayoral control of New York City schools and other legislation.

The other legislation isn’t expected to be controversial items, such as property-tax relief or same-sex marriage.

Assembly Speaker Sheldon Silver, D-Manhattan, indicated this morning on Talk 1300-AM in Albany that he will await Gov. David Paterson’s call of a special session before convening the Assembly and that he will discuss amendments to the mayoral control legislation with his members.

   The state Division of Budget announced this morning that, based on the first quarter of fiscal year, New York has an estimated $2.1 billion budget deficit. Left unchecked, it would grow to $4.6 billion in 2010-11.

   Gov. David Paterson said he would release an economic and financial recovery plan in September. He has already said he would call lawmakers into special session this September to cut the budget.

   “New York, like virtually every state in the nation, continues to experience historic economic difficulties and further action is needed to control spending,” the governor said in a statement.

   “Although the budget enacted in April took substantial action to close a $20.1 billion budget gap, the fact remains that revenues have continued to fall, and this will force us to make further difficult choices,” he said.

   General fund revenues are projected to be $1.97 billion, or 3.6 percent, lower than what was anticipated. The remainder of the $2.1 billion deficit is the result of $151 million in higher general fund payouts, including $90 million more for fringe benefits and $33 million for a settlement with the federal governent on school health care.