Governor David Paterson Wednesday morning announced a plan to save $600 million by forcing all state agencies to cut their budgets by 7% and by freezing all hiring.
The details were announced at a morning news conference in Albany, one which came hours after his Tuesday afternoon statewide broadcast speech. That brief speech put state taxpayers on notice that the state’s budget is carrying a massive deficit, due to the recession, the home foreclosure crisis, and the sharp downturn on Wall Street.
When Paterson took office earlier this year, he inherited a budget with a projected $5 billion deficit. Tuesday, he announced that the projected deficit had ballooned to$6.6 billion.
“We certainly did not expect such a mammoth collapse in the revenues,” he said Wednesday.
The immediate 7% cut in state agency budgets follows an earlier cut of 3.35%. It will almost certainly result in job cuts among state workers. The hiring freeze will cut some jobs as employees leave voluntarily. Paterson called it a “hard” freeze, meaning that no job opening will be filled unless it is approved at a high level, which Paterson did not specify.
The first round of cutbacks reduced the state workforce by 1,000 jobs, according to the state’s budget director. This new proposal was immediately denounced by the head of the union representing most state workers, the Civil Service Employees Association. Danny Donohue, in a statement, called Paterson’s proposals “a sham” and a “knee-jerk political solution”. He added, “there are better ways to address fiscal challenges than laying off working people in a troubled economy.”
Paterson acknowledged that state workers did not create the economic downturn that has plunged the state budget into crisis, but said the only thing he can do as Governor without the approval of the Legislature is to cut state agency budgets.
Paterson also renewed his call for state lawmakers to return in a special session in mid-August to pass his plan to cap school property tax increases, to provide home heating aid for low-income residents this winter, and to cut another $600 million from the budget.
“We think everybody needs to take responsibility here,” he said.
Republicans, in control of the State Senate, greeted Paterson’s address enthusiastically Tuesday night. Paterson acknowledged that his own party’s response in the Assembly was much more reserved, largely because of the Assembly’s long-standing support for raising the amount of money given to school districts. Paterson repeated that no area of the budget should be immune.
“I want to hear self-sacrifice and self-awareness here. What i would like to hear is the proposals of where we should make adjustments,” he said.
The Governor said he would meet with his advisers and come up with ideas for the Legislature to consider.
One of Paterson’s ideas for saving money is to explore partnerships with the private sector over state assets. “We don’t want to sell the Thruway,” he said. Instead, the state will consider ways to let private companies manage or lease state assets. Some states have, for example, leased control of toll highways like the New York State Thruway to private companies. Private companies could also manage New York’s parks.
While he said that no idea for solving the budget crisis is off the table, the Governor is leaving one idea as a last resort: higher taxes. “The reason that I’m avoiding taxes is that taxes are addictive,” he said “In many respects, when we taxed in the past, we could have taken advantage of those revenues to pay down on the deficit or our long term debt and we didn’t do that.
“I don’t want to be on the list when future governors say, nobody said anything.”
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