Politics on the Hudson

Legislative leaders were meeting behind closed doors this afternoon with Gov. David Paterson to continue budget negotiations to close a $3.2 billion mid-year budget gap.

Senate President Sen. Malcolm Smith, D-Queens, said the two sides are millions of dollars apart on a budget agreement, not billions. While Smith said the sides are close, he said an agreement might come out to less than $3.2 billion.

“The main thing is making sure that the cuts are fair, making sure that they don’t disproportionately hurt any particular group,” Smith said told reporters. “And that’s where we are.”

Smith said health care and mid-year school aid cuts are among the issues holding up an agreement.
Senate Democrats remain opposed to school aid cuts, he said.

“What we will do is get to a point where we will sit down with our members (and) we will look through everything. Health-care right now is a sticking point, there’s no question about it.”

Assembly Speaker Sheldon Silver, D-Manhattan, told reporters that he’s ready to reach a deal “anytime they’re ready. Obviously, the hangup is not here,” referring to Senate Democrats.

Silver disagreed with the belief of some Senate Democrats that the state isn’t in jeopardy of running out of money.

“I don’t agree with them,” Silver said. “At some point, when there is $4 billion or $3.5 billion less cash than there is obligations, you’ll run out of money.”

He said schools can absorb some cuts but “obviously we have to be careful that we don’t burden the ones that can’t, but there are a number of them that have reserves.”

Assembly Republicans, meanwhile, presented a list of budget remedies this morning and dismissed Paterson’s criticism that lawmakers aren’t coming up with their own solutions.

“We believe the deficit is real,” said Assemblyman James Hayes, R-Amherst, the ranking Republican on the Ways and Means Committee. “The fact that majorities have retreated behind closed doors is an outrage.”

Kolb’s conference is rejecting cuts to education, health care and local aid mid-year, saying they could lead to property tax increases. They proposed a series of other measures, including:
—A 20 percent increase to out-of-state tuition for the State University of New York, which would raise $99 million mid-year.—An end to purchases of open space, which the conference says would save $30 million mid-year.—Agency efficiencies, which would cut $280 million.—A 5 percent cut to state contracts, which would save $300 million.—Elimination of extra spending by the legislature, which they say would generate $1.5 billion.—Allowing counties to decide which optional Medicaid programs to provide, which early estimates showed could save $1 billion, though conference staff thinks that figure is smaller with the amount of time that has passed already.—Elimination of the Indian Health Program, which would save $8 million.—Elimination of legislative earmarks, which would save $175 million.—Consolidate administrative agencies with overlapping functions, which would save $241 million.

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