Paterson says Washington should help New York deal with budget deficit The Business Review (Albany) - by Adam Sichko
Print Article Email Article Reprints RSS Feeds Add to Del.icio.us Digg This Gov. David Paterson will ask national leaders in Washington, D.C., to boost New York's sagging economy by changing the state's Medicaid reimbursement formula and taking other steps.
New York is facing a $5 billion budget gap next year and deserves special attention since the financial woes on Wall Street ripple through the national economy, Paterson said during a July 21 press conference at the Capitol.
He said economists who claim the nation is not destined for, or already in, a recession are out of touch.
"That finally confirmed to me that flying saucers have landed and that people from outer space are in our midst and interfering with policy," he said.
The economy was the dominant theme of the press conference. Paterson, a Democrat, met earlier in the day with his executive cabinet, the first formal meeting with his advisers since taking office in mid-March following the resignation of Eliot Spitzer.
The governor said he is considering a trip to Washington to emphasize how important New York is to the nation's economic vitality.
"New York state is paramount among that elite group of institutions, because we have such an impact on the growth of the rest of the country," Paterson said. "We're going to need assistance in terms of our recovery.
The state bears the brunt of the sagging fortunes on Wall Street since 20 percent of New York's annual revenue comes from taxes on Wall Street income, bonuses and real estate deals.
"I hope the federal government sees us as a catalyst for recovery," he said.
He called the state's Medicaid reimbursements formula "anachronistic" compared with other states, which drives up the cost of health care for taxpayers in New York.
Paterson also said the state should not take comfort in last week's news that first-quarter tax revenue collections were greater than the projections in the $122 billion state budget. State Comptroller Thomas DiNapoli, a fellow Democrat, delivered the same message several days ago.
Since April, the state has received $1.6 billion in revenue from mergers, acquisitions, initial public offerings and real estate sales that all occurred in 2007.
Paterson echoed DiNapoli's earlier warning that such figures were "deceiving."
"It's run out," Paterson said. "Revenues are falling at a frightening pace.
"I just get the feeling, as I've gotten for the last year, that we are not embracing the difficulty of this economic situation," he continued. "It's a lot easier to embrace reality and then go forward and try to resolve it, than to not embrace reality and suffer the consequences of the added delay."
Paterson has previously said he could call the Legislature back at any time to address a number of issues, including measures to trim state spending or enact a cap on property taxes.
Maybe the NYS should try to cut spending and stop giving out millions of dollars in welfare payments to people who don't deserve it. It's time for the state to start solving it's own problems and stop depending on the federal government to bail them out.
NYS just got too big for it's britches! Over taxed and over spent. NYS is clearly no different than the mortgage company bail-outs. NYS continues to give money to most people who don't deserve it! And I'm not just talking about people who make a career from the welfare system. How about the white collar welfare? All of the nonsense public jobs? The benefits and retirements we pay for them FOR LIFE!!! And now NYS is going to the Feds crying!
And even if NYS does get a Federal bail out....it is STILL with our tax dollar due to poor political fiscal management.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
THAT '70S WOE IN RERUN GOV WARNING OF WORST ECONOMY IN DECADES By FREDRIC U. DICKER, State Editor
Please don't touch budget for Post-Op Tranny lifestyle education! posted by Katchy QuinlinClick here to comment
Last updated: 8:41 am July 28, 2008 Posted: 4:18 am July 28, 2008
ALBANY - Gov. Paterson, convinced the state faces its worst fiscal crisis since the mid-1970s, will deliver the grim news in an unprecedented special address to New Yorkers as soon as tomorrow night, The Post has learned.
The governor's address - which his aides hope will be televised by public and cable news stations - will say that plunging state revenues will force painful cuts in state services, necessitate a reduction in the state work force, possibly through layoffs, and require other difficult economic measures, source said.
Paterson is also expected to announce that he's ordered state agencies to slash spending beyond the relatively modest 3.3 percent cuts he ordered in late spring.
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He may also call a special session of the Legislature to propose reducing some of the record-high levels of spending that were approved as part of the state's new budget in April.
"The situation is worse than anyone realizes," said a source close to Paterson.
"The governor has said he's tired of the state going from deficit to deficit, spending like it has a credit card that never has to be paid, and that he's prepared to take action," the source said.
Paterson in recent days has huddled with budget planning officials from the administrations of former Govs. Mario Cuomo and Hugh Carey "to get their ideas on how to manage a fiscal crisis," the source said.
To make his concern even clearer, Paterson will hold a private meeting today with Columbia University's Nobel prize-winning economist Joseph Stiglitz, the former head of the World Bank, who has called the current worldwide financial crisis the worst since the Great Depression.
"The governor has been impressed with Stiglitz's work, and there have been staff discussions leading to the meeting Monday," said an administration source.
Paterson warned last week that Wall Street bonuses - a major source of state tax revenue - will likely drop by 20 percent or more this year.
A day later the state Financial Control Board said New York City's projected two-year deficit had grown by a whopping $4 billion because of Wall Street losses and the economy's overall decline.
The governor's own budget experts are slated to present an updated financial plan with sharply lower projected revenues on Wednesday.
Spendthrift New York City almost went bankrupt in 1975-76 and the state defaulted on some of its bonds at the same time in the worst fiscal crisis to face New York since the Great Depression.
While state and city leaders pledged to assure the prudence of future fiscal practices, that pledge was largely abandoned during the past 20 years as officials ran up state spending at two or three times the inflation rate because of sharp increases in education and health-care spending.
I would like to see the leaders of Schenectady take the lead by cutting unnecessary spending. All of the created positions and numerous duplicated government programs need to be dissolved. It is obvious that any municipality that relies on state monies to fund political/non profit positions or programs may be cut.
Schenectady County is already anticipating an $8M to $16M deficit. There should be a county wide hiring freeze. Also, they should take into consideration the possibility of a moratorium until the economy levels out.
Quoted from JoAnn: ... Schenectady County is already anticipating an $8M to $16M deficit. There should be a county wide hiring freeze. Also, they should take into consideration the possibility of a moratorium until the economy levels out.
The Democrats who comprise the majority party in the County Legislature can begin to cut costs by eliminating the patronage positions that have been created by them for those who are politically connected.
As for a hiring freeze or moratorium until the economy levels out, I would propose that permanent cuts in spending be identified.
A review of all non-mandated services needs to be performed. An austerity budget must be adopted.
Quoted from JoAnn: ... Schenectady County is already anticipating an $8M to $16M deficit. There should be a county wide hiring freeze. Also, they should take into consideration the possibility of a moratorium until the economy levels out.
The Democrats who comprise the majority party in the County Legislature can begin to cut costs by eliminating the patronage positions that have been created by them for those who are politically connected.
As for a hiring freeze or moratorium until the economy levels out, I would propose that permanent cuts in spending be identified.
A review of all non-mandated services needs to be performed. Tough choices must be made. Those who lack the courage and conviction to govern in the public interest should resign. An austerity budget must be adopted.
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