Paterson Seeks Huge Cuts and $1 Billion in Taxes and Fees

Gov. David A. Paterson unveiling his budget in Albany on Tuesday, declared, “The age of accountability has arrived.”


By DANNY HAKIM and NICHOLAS CONFESSORE
The New York Times
January 19, 2010

ALBANY — Gov. David A. Paterson proposed on Tuesday what would be the largest cut to school aid in more than two decades and nearly $1 billion in new or increased taxes and fees as he unveiled his budget, a plan that is likely to be the first chapter in a prolonged battle with the Legislature.

Searching for new sources of tax revenue amid a fiscal crisis, the governor proposed legalizing mixed martial arts, allowing the sale of wine in grocery stores, taxing bottled soft drinks, taxing cigarette sales on Indian reservations and deploying speed-enforcement cameras in highway work zones.

He even proposed charging fees to many families that enroll in an early intervention program for children with autism, attention deficit disorder and other special needs, and delaying one of his signature achievements — a plan to increase monthly welfare allowances.

Facing a $7.4 billion deficit this year, the governor is presenting a relatively lean budget by the standards of a state government accustomed to unrestrained spending. His office also delivered more sobering news, projecting that the state’s income will not return to the levels seen before the financial crisis until 2013.

The overall budget, including federal matching funds, would grow to $134 billion, up $787 million, or 0.6 percent, from the current fiscal year, which ends on March 31. State spending would increase $745 million, or 0.9 percent, to nearly $80 billion.

“This is not a budget of choice; this is a budget of necessity,” Mr. Paterson said in a speech to the

Legislature on Tuesday morning. “Ladies and gentlemen, the days of continuing taxation and the days of continuous spending have got to end,” he added. “The era of irresponsibility has got to stop. The age of accountability has arrived.”

Several dozen lawmakers skipped the speech, which took place in a large egg-shaped auditorium here, and those who did attend greeted the governor’s remarks with polite, if tepid, applause.

Mr. Paterson has had a tense relationship with fellow Democrats, who control the Legislature, sometimes by design as he has sought to capitalize on voter discontent with the array of scandals emanating from Albany.

Lawmakers expressed a mix of caution and skepticism on Tuesday. “Some of the stuff is retreads from last year that never quite made it, and I imagine they’ll probably meet the same fate,” said Senator Diane J. Savino, a Democrat representing Brooklyn and Staten Island, who singled out the soda tax and the proposal to allow groceries to sell wine.

Senator Malcolm A. Smith, a Queens Democrat, said the governor should not have allowed for an even modest rise in spending. “I don’t think we really should be increasing it at all,” said Mr. Smith, the Senate president.

Senator Dean G. Skelos, leader of the Senate Republicans, said, “The greatest danger” was “the one posed by Assembly and Senate Democrats who no doubt will push to further increase spending and taxes just like they did last year.”

The leaders of the Legislature — Senator John L. Sampson of Brooklyn and the Assembly speaker, Sheldon Silver of Manhattan — said they needed more time to review the proposals.

As he faces an uphill election battle, Mr. Paterson’s budget is also a break from the typical practice of robust budgets in election years. With no money to throw at preferred interest groups, Mr. Paterson is betting that voters will reward him as a responsible steward instead of punishing him as a Scrooge.

His plan would cut school aid by 5 percent in a state with the highest per-capita spending on education. It would also slow the growth of spending on Medicaid, reduce by $1 billion spending on state agencies and eliminate $300 million in undesignated annual aid to New York City.

But Mr. Paterson avoided harsher medicine. He has made no significant cuts to the state’s work force and even assured union leaders that he would not seek layoffs this year, a risky move as the state faces huge deficits in the coming years.

His plan also assumes that there will be a significant recovery this year in the state’s tax collections and relies on a number of recycled proposals. A new tax on sugared sodas, $1.28 per gallon, would yield $465 million, similar to a proposal that Mr. Paterson made last year but dropped amid resistance from the Legislature and companies like PepsiCo Inc., which is based in Purchase, N.Y.

Mr. Paterson is also proposing an increase in cigarette taxes, raising the tax per pack by $1, to $3.75, a change that would bring total taxes in New York City to $5.25 per pack.

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