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Against the wind

Conventional political wisdom says public officials facing re-election should throw money at voters. In preparing his executive budget plan for 2010-11, Gov. David Paterson apparently decided the conventional wisdom would be wrong this year.

That, or he confronted reality squarely and realized that he has no spare money to toss around.

Facing an Everest-like uphill struggle to win a full term as governor in the fall, Mr. Paterson released a budget plan this week that has something for virtually every New Yorker to dislike.

The governor, saying that "the mistakes of the past-squandering surpluses, papering over deficits, relying on irresponsible fiscal gimmicks to finance unsustainable spending increases-have led us to a financial breaking point," proposed a $134 billion spending plan that closes a projected $7.4 billion deficit through $5.5 billion in recurring spending reductions and $1 billion in increased taxes or fees, among other actions.

The spending cuts include:

  • a reduction of $1.1 billion or 5 percent in school aid, with wealthier districts taking the biggest hits;
  • $1 billion in Medicaid and health care savings, including reductions to providers; and
  • more than $1 billion in reductions to state agency operational spending, including across-the-board cuts.

The total budget, which includes federal funds, would increase $787 million, or 0.6 percent, from the current fiscal year. State spending would grow to roughly $80 billion, up $745 million or 0.9 percent.

While welcoming the spending restraint, the Business Council of New York State Inc. and other groups that speak for employers took aim at the higher taxes and fees. Other parties, ranging from education groups to health care representatives, said the governor had cut too deeply. And importantly, Mr. Paterson’s fellow Democrats in the Legislature exhibited faint support.

Does this all sound familiar? A year ago, the governor called for a fiscally responsible budget, then was overwhelmed by legislative opposition.

Mr. Paterson’s 2010-11 plan is by no means perfect, but it gets many things right. At crunch time, however, that may not matter.

1/22/10 (c) 2010 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.

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