Paterson proposal calls for hike in welfare payouts, billions in cuts to health care, education

By Irene Jay Liu, Capitol bureau

ALBANY — Gov. David Paterson will propose millions of dollars in increased state spending to programs serving poor New Yorkers — including an increase in welfare payouts for the first time in 18 years — when he unveils his first budget Tuesday. But the plan also will include billions of dollars in cuts to health care and education to address the state’s looming $15 billion budget deficit.

“The nation and the state are in the midst of the greatest economic crisis we have endured since the Great Depression, and there are families struggling to provide basic needs for their loved ones,” the governor said in a statement released Sunday. “Even in the face of dwindling government revenues, we need to make critical investments to ensure that people don’t go hungry and families receive proper health care that is centered on prevention.”

Paterson’s proposals include: increasing the welfare grant to poor families by 30 percent over the next three years; expanding eligibility and reducing application requirements for the state’s health insurance program; calling for increased federal dollars to pay for expanded health insurance for adults, indigent care at hospitals and community health clinics; and increasing funding for food pantries, soup kitchens, cancer screenings, lead poison prevention, obesity prevention and services for veterans.

Paterson’s proposals come at a time when the state faces an estimated $15 billion combined deficit in this and next year’s budget. Paterson attempted to address this year’s $1.5 billion deficit in November, but instead of working together to make cuts, the governor and legislative leaders held a public meeting that amounted to little more than partisan bickering and finger-pointing.

Paterson’s budget proposal for the 2009-2010 fiscal year is expected to address the multibillion-dollar shortfall, including about $3.5 billion in cuts to health care. Additional cuts will be across the board and will build upon a deficit reduction plan Paterson proposed in November to amend the $120 billion budget negotiated for this year.

“Really, no area is without reduction” in Paterson’s proposal, said Kristin Proud, the governor’s deputy director for state operations, speaking on a conference call to reporters Sunday.

The most expensive aspect of Paterson’s plan is the increase in the welfare grant. If implemented, it would increase 10 percent each year for three years, beginning in January 2010.

When fully implemented, the average family of three on public assistance would be eligible to receive a basic monthly allowance of up to $387, up from the current allowance of $291. The basic monthly grant has remained the same since 1990, while inflation has increased by more than 65 percent, according to estimates from the governor’s office.

The annual cost to the state of this increase would be $8 million in 2009-10, increasing to $109 million in 2012-13, when it is fully implemented. The increase will cost counties an additional $76 million annually when fully implemented, as counties are responsible for a share of the costs of public assistance programs.

Assembly Speaker Sheldon Silver’s office declined to comment on the current budget plan, but the Assembly has included a welfare grant increase in its budget resolution every year since 2006. It has never passed due to opposition in the Senate, which has been under Republican control for decades.
“While we are concerned that New Yorkers are finding it more difficult to make ends meet and provide for their children during these challenging economic times, we will weigh each of the governor’s proposals within the context of an overall balanced budget that will not be released until Tuesday,” said Senate GOP spokesman Scott Reif.
The Senate will meet in special session today and is expected to vote on a bill that would phase out the Empire Zone program through 2011 and use the savings to provide tax breaks for companies, a move Senate Republicans say will stimulate the economy.

The Assembly will return to Albany on Tuesday to receive the governor’s budget proposal, but is not expected to gavel into session.

The fate of Paterson’s proposals is unclear, especially given the uncertainty over which party will control the Senate in January. Democrats won the majority in November, but three Democrats have withheld their support from Senate Democratic Leader Malcolm Smith.

Smith’s office declined to comment on the governor’s proposed budget until it is released Tuesday.

The cost of Paterson’s proposed spending increases are a small fraction of the state’s expected budget deficit, but some fiscal conservatives are saying that now is not the time to expand programs.

“Our role during the best and worst of economic times, in any budget process, is first of all to think of taking care of those most in need,” said Assembly Minority Leader James Tedisco, R-Schenectady. “But I also think that we have the Cadillac of welfare services in New York state. We have services galore for people in need. I don’t think now’s the time to expand them.”

Tedisco also noted that because counties share the cost of public assistance programs, property taxes might increase as a result of Paterson’s proposals.

Meanwhile, a broad range of advocacy groups are preemptively calling for “shared sacrifice” in anticipation of Tuesday’s budget proposals. Today, a statewide coalition of hundreds of nonprofit, labor and faith-based organizations will release a letter signed by 100 economists calling for an income tax increase on wealthy New Yorkers. On Sunday, 152 religious leaders, in collaboration with the Greater New York Hospital Association and the powerful health care workers union SEIU 1199, published an open letter to the governor and legislative leaders.

“A solution to our state’s budget deficit must not fall on the weakest and most vulnerable,” the letter reads.

Staff writer Irene Jay Liu can be reached at (518) 454-5081 or iliu@timesunion.com.

Paterson’s proposals

Paterson’s safety net initiatives for vulnerable populations

Increase the welfare grant to poor families by 30 percent over the next three years.

Request federal funding to pay for increased indigent care at hospitals and community health clinics, and to expand the Family Health Plus program to cover adults who earn up to 200 percent of the federal poverty level.

Increase funding for food pantries, soup kitchens, cancer screenings, lead poison prevention, obesity prevention, and services for veterans.