Politics on the Hudson

Gov. David Paterson called legislators back to the Capitol on Monday, but like last week the sides remained at odds over how to close the state’s $3.2 billion mid-year budget gap.

Paterson has indicated he plans to keep the state Legislature in Albany until a deal is complete, which lawmakers expect may still be days away. He has called another special session for Tuesday after ordering them to Albany last week for what ended up being a failed session.

Paterson has proposed $1.3 billion in cuts, mainly to education and health care, to close the gap. But Senate Democrats in particular have been opposed to the cuts and are seeking alternatives.

Senate Finance Committee Chairman Carl Kruger, D-Brooklyn, hand delivered a letter to Paterson’s office Monday asking him to start taxing cigarettes sold on Native-American reservations.

Kruger claims the tax could generate up to $1.6 billion in revenue for the state, but state officials said it would be much less. The state has tried unsuccessfully for years to collect the tax from tribes.

Sen. Stephen Saland, R-Poughkeepsie, said collecting the tax is not a short-term solution to the state’s fiscal problems. He warned, as Paterson has, that the state faces running out of money.

“At some point we will run out of money. Maybe it won’t be by December 31, maybe it will be by January 31,” he said. “It’s not a question of if; it’s only a question of when if we don’t close the deficit.”
Kruger and other Senate Democrats said cuts to schools mid year would hurt classroom education.

“It’s my hope that there will not be education cuts, but I cannot say that will not happen,” said Sen. Suzi Oppenheimer, D-Mamaroneck, Westchester County.

Some Democrats have floated raising $1 billion through a temporary surcharge on HMOs, but Kruger said that would be coupled with a cap on premiums charged to health insurers. The proposal was sharply criticized by business groups, saying it would hurt companies and be another tax on New Yorkers.

“They will be committing the same fiscal sins of the past if they raise the taxes on health insurance,” said Brian Sampson, executive director of Unshackle Upstate.

Sampson and other business groups said spending cuts are needed. Paterson continued to urge Monday that cuts need to be part of an agreement.

“This is why the state is in so much trouble because we have a spending addiction that has overcome Albany for the last couple of decades,” Paterson said on WVTL-1570 AM based in Amsterdam, Montgomery County.

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