Politics on the Hudson

   Laura Anglin, Gov. David Paterson’s budget director, reminds the chief officials of the Senate and Assembly fiscal committees that the Division of Budget and the governor are open to suggestions about any proposals of their own for slashing $2 billion out of the state budget. The administration delivered copies of proposed legislation to the lawmakers last Thursday and has provided them and their staffs with nearly 50 “detailed briefings” on the proposal.

   Paterson has called lawmakers into special session tomorrow to cut spending. New York’s deficit is $1.5 billion and growing. Assembly and Senate leaders have not provided any of their own recommendations, and it’s possible that they may not get a lot done when they meet this week.

   Anglin reminded leaders that the process being used is the same one that was used for the “successful” budget-cutting session in August.

   “We remain available to discuss any questions. Additionally, as always, we will consider any alternative proposals or savings ideas you may have. We look forward to working together in cooperation to facilitate a consensus agreement that will bring our budget back into balance,” she wrote.

   More information is available about the governor’s proposed spending cuts at www.budget.state.ny.us.

   Pegging their argument to the poor economy, a group called New Yorkers for Real Recycling Reform put out a statement today calling Gov. David Paterson’s plan to expand the bottle-deposit program a “cynical food tax.” Implementing would unfairly hit New Yorkers “already struggling with increased food costs and other economic hardships,” said the coalition, which is made up of businesses, labor unions and retailers.

   In his proposal today to cut $2 billion from the state budget, Paterson called adding water bottles and other non-carbonated beverages to the bottle-deposit program. He also wants the state to keep unclaimed deposits.

   New Yorkers for Real Recycling Reform said expanding the 5-cent bottle tax would result in a price increase of up to 15 cents per bottle on beverages like kids’ juice drinks, iced teas and sports drinks because businesses would have to pass extra costs onto consumers. The new tax on those products would increase the number of bottles businesses would have to handle and remove money from the system that businesses use to pay for the state-mandated program, the group said.

   “And, at a time that thousands of New Yorkers’ jobs are at risk, the governor’s proposal will put even more New York jobs in jeopardy,” the statement said.

   Gov. David Paterson is not too happy with Senate Majority Leader Dean Skelos’ remarks on the governor’s proposal for $2 billion in budget cuts this fiscal year. Paterson unveiled his plan today on reducing state spending. The state has a $1.5 billion budget gap that is expected to grow.

   Skelos, R-Nassau County, said lawmakers need to see what the governor proposes in his 2009-10 budget before it can act on anything else. Paterson has called lawmakers back to Albany Tuesday for a special budget-cutting session. Skelos is opposed to raising taxes or passing costs down to school districts and local governments.

   Here is what Paterson spokesman Errol Cockfield said in response:

   “It would be fiscally irresponsible to delay addressing the current-year $1.5 billion deficit by tying it into next year’s budget. The longer we wait to reduce spending, the more difficult and costly it will be to confront these serious budget gaps later.

   “Governor Paterson will begin tackling next year’s $12.5 billion deficit—the largest in our state’s history—when he proposes his budget five weeks early on Dec. 16. Right now, what the state needs is immediate action to close this year’s $1.5 billion gap so we can ensure the state’s long-term fiscal security. I am confident the Legislature will partner with us and rise to that challenge.”

   Here’s a breakdown of where Gov. David Paterson has identified $2 billion in budget cuts and savings. He has called legislators to Albany Tuesday for an emergency economic session and is asking them to cut $2 billion. The state deficit is $1.5 billion and growing, according to the governor, and is projected to be $12.5 billion in 2009-10.

   Medicaid/health care—$572 million, 28.3 percent

   School aid—$585 million, 28.9 percent

   Higher education—$115 million, 5.7 percent

   Other education—$36 million, 1.8 percent

   State workforce—$137 million, 6.8 percent

   Local governments—$134 million, 6.6 percent

   Human services—$20 million, 1 percent

   All other—$424 million, 21 percent

   As anticipated, State University of New York students are protesting the state’s budget cuts this year and their effect on campuses—fewer class offerings, larger classes, unfilled faculty positions, etc. Perhaps less expected are the calls by a number of students for regular, predictable tuition hikes. SUNY’s Student Assembly voted last month to back tuition increases. Student leaders at SUNY Geneseo in Livingston County are organizing a pro-tuition increase rally at their campus. They have collected more than 1,000 signatures to back up their case (see photo).

   Here’s an excerpt from the letter they’re sending to Gov. David Paterson:

   “The students favor a responsible and reasonable tuition policy that will provide predictable increases that directly benefit the students. Due to the budget cut’s impact on SUNY Geneseo, which has added up to a total of over $2 million, students are now in fear that the academic opportunities that were once promised to them could now be in danger of diminishing. The students are taking a stand to protect SUNY Geneseo’s integrity and to preserve it for prospective students.” 

   Presidents of the 30 state-operated SUNY campuses recommended their own plan yesterday for regular increases in tuition. They want tuition boosted $1,090 a year to begin with. The first half of that would be due in the spring semester. The last time SUNY’s tuition was increased was in 2003, when it went up to $4,350.     

SUNY’s state funds have been cut a few times this year, with a net impact of $210 million on the school, and the 64-campus system could face more cuts before the fiscal year ends March 31. Paterson has called a special meeting of the Legislature Tuesday to cut $2 billion out of the state’s spending plan because of New York’s economic crisis.

   Meanwhile, the New York Public Interest Research Group continues to oppose a system of gradual annual tuition increases. Tuition hikes don’t necessarily guarantee that the university will receive additional funding or enough funding, says Fran Clark, a spokesman for the student-directed group. (more…)

For those craving more information on how what happens in Albany trickles down to your community, the New York State Conference of Mayors and Municipal Officials has launched www.StopTheTaxShift.org. Its purpose is to educate policymakers, the media, the public and, more specifially, New York’s overburdened real property taxpayer.

With New York’s fiscal crisis, mayors and other local officials are preparing to fight back any potential threats to state aid they receive. Last week, members of the New York Association of Counties and the County Executives Association cautioned that reductions in state aid could negatively affect communities and result in property-tax hikes. Gov. David Paterson has asked lawmakers to hold a special budget-cutting session in Albany next week. New York faces a $1.5 billion shortfall this year, which is expected to grow, and $12.5 million in 2009-10.

“New York is at a crossroads,” Cohoes Mayor John McDonald, president of the Conference of Mayors, said in a statement. “Will our leaders repeat the near fatal mistakes of the early 1990s, when local aid was slashed, and from which many communities have never recovered? Or will the governor and state legislators take the right approach and protect municipal property taxpayers from the devastating effect of cuts in AIM (municipal aid) funding?”

Features on StopTheTaxShift.org include a blog by “Joe Taxpayer” and a “Mandate of the Week” section.

In its mid-year economic and revenue-forecast report, the Senate Republican majority said the governor’s Division of Budget consistently overestimates future-year budget deficits. In the past three years, the executive has overestimated the out-year gaps by an average of $5.7 billion, according to the report by Global Insight.

Although recent events in the financial markets are likely to have a negative impact in the second half of the fiscal year, which ends March 31, state general fund receipts are $138 million higher than projected in the Budget Division’s first-quarter update and spending was $203 million lower, the report said. But Gov. David Paterson doubled the three-year deficit projection (through 2011-12) from $26.2 billion estimated three months ago to $45.5 billion, the GOP report said.

The Senate forecast said the general-fund spending for Medicaid will be less than predicted by the governor. Republicans estimate it will be $8.95 billion this year and $10.59 billion the following year, $265.8 million less than the Division of Budget projection.

Also in the report:—Tax collections are estimated at $61.6 billion this year and $61.1 billion in 2009-10.—Employment is expected to increase by 0.3 percent in 2008-09 and decline by 1.1 percent in 2009-10.—The 4.6 percent growth in personal income this year was primarily a result of economic-stimulus checks from the federal goverment. Income will grow at a slower pace the following year, at a rate of 1 percent. (more…)

Gov. David Paterson just released a statement urging Congress, President Bush and President-elect Obama to create a financial-assistance package for the auto industry, which includes thousands of workers in western New York.

“As it did with the financial industry assistance package, the federal government must act to secure the future of the critical domestic auto industry,” he said.

General Motors and Ford announced today that they are dealing with large losses this quarter and plan to make layoffs.

“Without a financial bridge from the federal government, already struggling western New York stands to lose more than 2,000 jobs, in addition to the tens of thousands of automotive jobs predicted to be lost across the country,” Paterson said.

“This region of our state cannot sustain another major economic loss, and I fear the harm to upstate New York will be irreparable and widespread, causing a further exodus of skilled workers and deeply rooted families,” he said.

Last week, Paterson was in Washington to ask for federal aid for New York and other states. New York faces a $1.5 billion budget gap so far this year and a $12.5 billion shortfall in 2009-10, in part because of the economic downturn and its effect on Wall Street.

   The Assembly just released its take on New York’s budget crisis. Like the report issued earlier today by state Comptroller Thomas DiNapoli, it doesn’t contain good news. Employment and wages are expected to fall in 2009 and the decline on Wall Street will drive down other revenues to the state.

   “The New York State economic outlook is bleak,” according to the Assembly report, prepared by the Assembly Ways and Means Committee.

   The mid-year update of revenues and the state’s economic outlook is required by the state budget process.

   Some of the other Assembly findings: 

  —Tax revenues for 2008-09 will be $61 billion, $252 million below the estimate by Gov. David Paterson’s Division of Budget. That’s $1.8 billion less than the Budget Division’s first quarter estimate. Anticipated revenues for 2009-10 are $59 billion, much of which can be attributed to the forecast for personal income tax.

  —A slowdown in consumer spending is expected to limit 2009-10 growth in sales tax revenue to 1.9 percent. Business taxes are expected to decrease by 1.1 percent from 2008-09.

   The Ways and Means Committee predicts state school aid will increase $1.33 billion. A report issued by Assembly Republican Ways and Means Committee forecasts that school aid will increase about $1.9 billion in 2009-10, bringing the total to $23 billion. 

   The mid-year update to the state budget makes some changes in estimated costs for 2009-10. In most cases, programs will be more expensive to operate, according to the financial plan. Examples include:

  —Higher projected school-aid costs of $13 million. The increase is primarily being driven by growth in building aid and excess cost aid for special education.

  —Less state Lottery money available for education. New games offered this year have not performed as well as expected.

  —The state’s share of child welfare services is expected to grow by $31 million because of projected growth in local child-welfare claims. The state pays 63.7 percent of certain services.

  —The cost-of-living allowance increase for human-services workers will cost $35 million more than expected because the 12-month consumer-price increase the raises are based on is 5.6 percent, not 3.5 percent as originally estimated.

  —Projected health-insurance costs for state employees and retirees have been reduced by about $100 million.

  —State University of New York and City University of New York community colleges will cost $28 million more than expected in 2009-10 because of growth in enrollment projections.

  —New laws passed this year are expected to add $1.7 million this year and $3.2 million in the future, including legislation that requires crisis-intervention and community services for sexually exploited youth; the creation of a statewide cancer-incidence map; and setting up guidelines to prevent “over-concentration” of sex offenders in communities.