BALCONY - Business and Labor Coalition of New York

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November 10th, 2008

By Frederic U. Dicker

Gov. Paterson is heading for his first major defeat, as lawmakers appear likely to reject his $2 billion in proposed state spending cuts aimed at containing a ballooning budget deficit, The Post learned yesterday.

Senate Majority Leader Dean Skelos (R-Nassau), smarting over last week’s loss of majority control to the Democrats, may even refuse to take up Paterson’s budget-cutting request at the “emergency” session called by the governor for a week from tomorrow, sources said.

Late last week, Skelos suggested in a little-noticed budget analysis that Paterson was exaggerating the seriousness of state budget problems, signaling to many he will refuse to act. And by waiting until January to take action, Skelos could leave Democrats with all the blame for what are expected to be widely unpopular budget cuts. That is assuming his uphill efforts to persuade two Democrats to defect to the GOP side in order to keep Republicans in control are unsuccessful.

Assembly Speaker Sheldon Silver (D-Manhattan), Paterson’s most important legislative ally, was described by sources as unwilling to pass the governor’s proposed cuts unless the Senate, which will be under GOP control until the end of the year, agrees to do so as well. “Shelly doesn’t want his members angering all the special interests by cutting spending unless there’s an agreement with the Senate and the governor to do so,” an Assembly insider said. “Look, it takes people around here a month to agree on how to spend $1 billion, so how are we going to have a quick session and agree to cut $2 billion?” declared one of the Legislature’s most powerful Democrats.

Skelos, Silver and even Senate Minority Leader Malcolm Smith (D-Queens), likely the next majority leader, all stiffed Paterson last Friday when they refused the governor’s request to submit their own proposals for budget reductions in advance of the upcoming session. Paterson has yet to reveal what cuts he thinks should be made, but is expected to do so later this week. Paterson, calling New York’s budget crisis the worst since the Great Depression, has repeatedly said the state must cut spending this year to control what could grow to an unprecedented $14 billion-plus budget deficit next year. The two largest areas of state spending – school aid and Medicaid/health care – are among the most popular programs with state lawmakers, who receive millions of dollars in campaign contributions from the teachers and hospital-workers unions, as well as from the health-care industry itself. Paterson is expected to hold closed-door meetings with Skelos and Silver on the budget crisis later this week. The governor has ruled out state tax hikes this year, but has left open the possibility that he would seek them as part of a package to balance the budget for the fiscal year beginning April 1.