by Reed Abelson

For these economically uncertain times, the UnitedHealth Group has a “first of its kind” product: the right to buy an individual health policy at some point in the future even if you become sick.

Called UnitedHealth Continuity, the product is not actual medical insurance, but is aimed at people who may have insurance now but are worried they may lose it — and may not be able to obtain replacement insurance on their own. They may expect to retire early, for example, before they qualify for Medicare. Or they are worried about the possibility of losing their job and their health coverage.

People who are already sick will generally not be eligible for the new product. Those who do pass a medical review, will pay 20 percent each month of the current premium on an individual policy to reserve the right to be insured under the plan at some point in the future. (more…)

The financial crisis could cost New York State and New York City 225,000 jobs and $6.5 billion in securities industry-related tax revenue over the next two years, according a report released today by New York State Comptroller Thomas P. DiNapoli. The Comptroller noted that the Governor and Mayor have been proactive in dealing with the crisis, but New York, like other states, may require federal assistance given the magnitude of the projected budget gaps.

“Wall Street is the engine that drives the economies of New York State and New York City, but the global credit crunch has slowed that engine down,” DiNapoli said. “This year is on pace to be one of the worst years ever on Wall Street. Through the first half of this year, broker dealer operations of New York Stock Exchange member firms reported a loss of nearly $21 billion.

“These numbers are translating into job losses. The securities industry in New York City has lost more than 16,000 jobs and the industry could lose a total of 38,000 jobs by next October, with another 10,000 jobs lost in banking, insurance and real estate. And those job losses translate into more job losses in other industries.

“The financial crisis highlights the need for greater transparency and oversight, but there has to be a balance. Overregulation could hurt the securities industry, which is vitally important to the State and the City.”

“This important report captures the substantial damage inflicted on New York by the collapse of global financial markets and underlines the importance of stabilizing the banking system in order to maintain our position as the world’s financial capital,” said Kathryn Wylde, president & CEO, Partnership for New York City.

Over the past year, the securities industry in New York City has lost 16,300 jobs. DiNapoli predicts the securities industry could lose a total of 38,000 by October 2009 and another 10,000 jobs could be lost in banking, insurance and real estate. The Comptroller estimates total private sector job losses could reach 175,000 in New York City but losses could be greater if the economic downturn is deeper and longer than currently forecast. In total, New York State could lose 225,000 jobs during this period.

According to DiNapoli, while top executives may not receive bonuses, lower level employees will still receive payments although the size of the bonus pool will be much smaller than in prior years. In the early 2000s, bonuses fell by 50 percent over a two-year period in the years following the bursting of the dot-com bubble and the events of September 11, 2001. According to the Comptroller, recent developments suggest that a decline of a similar or even greater magnitude could occur this time. By January of each year, the Comptroller issues an estimate of cash bonuses paid in the prior year.

“Top Wall Street executives ought to forego bonuses during this difficult time; it’s inappropriate to reward poor performance,” DiNapoli added. “But the public must keep in mind that bonuses paid to lower level employees are often used to purchase goods and services in other industries, which benefits the overall economy. New York will feel a lot pain from a shrunken bonus pool.”

The DiNapoli report also found:

• Broker/dealer operations of New York Stock Exchange member firms reported near record profits of $20.9 billion in 2006 but a record loss of $11.3 billion in 2007. These firms reported a loss of $20.7 billion in the first half of 2008 and New York City’s financial plan projects a loss of $25.5 billion for the entire year, but the Comptroller’s report warns that losses could be even greater.
• Securities industry revenues fell from $70.3 billion in the first half of 2007 to $32 billion in the second half of 2007. According to the report, total compensation averaged an unsustainable 97.4 percent of net revenues for the first half of 2008 (compared with an average ratio of 53 percent from 1990-2006).
• For the six largest securities firms headquartered in New York City, revenues fell by 63 percent in the second half of 2007 and by another 48 percent during the first three quarters of 2008. These firms reported write-offs of more than $140 billion during this period.
• As Wall Street contracts, the Comptroller estimates that jobs will be lost throughout the rest of the City economy due to the industry’s multiplier impact on jobs. DiNapoli’s multiplier effect estimates that for each financial sector job lost, two more jobs will be lost in other industries in New York City and 1.3 jobs will be lost elsewhere in the State.
• During the 2001-2003 recession, New York State lost 329,600 private sector jobs, of which Wall Street directly and indirectly contributed a loss of 173,500, or more than half of the decline. New York City lost a total of 232,100 private sector jobs during this period.
• The average securities industry salary reached a record high of nearly $400,000 in 2007 paying approximately 6.8 times the salary of all nonfinancial jobs in the City. Salaries averaged $150,640 in credit intermediation and insurance and $62,060 in real estate and related industries.
• Tax collections (personal income and business taxes) from Wall Street-related activities could drop by $4.5 billion for New York State and $2 billion for New York City by 2010. Wall Street activity generates a disproportionate share of State and City tax revenue because of high levels of compensation, profitability and capital gains.
• Wall Street-related activities account for 12 percent of New York City tax revenues and up to 20 percent of New York State revenues. Prior to the current crisis, the securities industry accounted for five percent of the City’s employment but nearly 25 percent of the wages.
• Hedge funds and private equity firms, which have also been hit hard by the crisis, play an important role in the securities industry and have a strong presence in New York City. According to a survey of large hedge funds and private equity firms conducted for the Comptroller by The Partnership for New York City, respondents leased nearly 1.5 million square feet of office space in New York City and paid more than $100 million in unincorporated business taxes to the City.

Click here for a copy of the report or visit http://www.osc.state.ny.us/osdc/rpt7-2009.pdf.

Would you recognize the face of the uninsured in America? It’s the 22-year-old recent college graduate who is no longer covered under a parent’s insurance plan, the 45-year-old professional who is between jobs and cannot afford high-priced continuation coverage, the single parents who can get government-backed insurance for their kids but make just too much salary to qualify themselves.

America’s broken health-care system is one of the largest obstacles to achieving victory over cancer. The people who need it most — nearly 46 million uninsured people — lack early and ongoing access to our nation’s health-care system, which studies have shown leads to poorer cancer outcomes. The failings of our health-care system directly contribute to needless suffering and death from cancer, which will kill an estimated 35,000 people this year in New York state. According to a recent Fiscal Policy Institute report, there were more than 46,000 nonelderly uninsured individuals in Orange County alone in 2006.

Fighting cancer is hugely expensive and can mean financial catastrophe for families with or without insurance. Almost half of uninsured cancer patients use up all or most of their savings fighting the disease. One in 5 patients who have insurance will face financial ruin in their battle with cancer. High costs and inadequate insurance policies cause nearly one-third of patients to skip or delay treatment for cancer.

Since lack of or inadequate health-care coverage has such a large impact on cancer survival rates and quality of life for those with cancer, the American Cancer Society is educating the public about the severity of the health-care crisis and its impact on real people. In the aftermath of a remarkable election, we need to make sure that health-care reform remains a top priority for the incoming administration. I challenge President-elect Obama to maintain the extraordinary level of commitment needed to push access to health-care reform over the finish line. Visit www.acscan.org to review where the presidents and newly elected state officials stand on cancer issues.

Cancer is potentially the most preventable and the most treatable of all life-threatening diseases. We have made tremendous progress in the fight against cancer, but we know not everyone is benefiting equally from those advances. Too many cancer patients are being diagnosed too late, when treatment is harder and more expensive and has less chance of saving lives. Screening tests and treatment that improves quality of life must be available to all.

Answers may be found in the private sector, the public sector or some combination of the two. The objective of the American Cancer Society’s public education efforts is not to propose a specific solution, it is to help define what the country needs and to encourage an open, productive dialogue about how to achieve it. Americans deserve access to health-care coverage that is adequate to meet their needs, affordable, available when they need it and administratively simple. The American Cancer Society will continue to fund groundbreaking cancer research, raise awareness about prevention and early detection, and advocate for tobacco control measures and programs that provide screening and treatment to the underserved.

Hold local lawmakers and state legislators accountable for pre-election health-care proposals and promises. The American Cancer Society Cancer Action Network will continue to defend funding for breast and cervical cancer screening and treatment programs, as well as funding for tobacco control programs. By building on our progress against cancer while working toward real solutions to the nation’s health-care crisis, we can help ensure that everyone has a fighting chance against cancer.

Sandra Cassese is assistant vice president for oncology and ambulatory services at Vassar Brothers Medical Center in Poughkeepsie and the state lead ambassador for the American Cancer Society Cancer Action Network.

By William Neuman

Deep cuts in subway, bus and commuter rail service could come as early as spring, followed by a double-digit rise in fares and tolls in June, transportation officials said on Thursday as they revealed a gloom-and-doom budget that came with a “cry for help” to elected officials to bail the authority out of its financial crisis.

But elected officials said they had no money to give and would wait to hear the proposals of a state commission that was seeking new revenue, which may include tolls on East River bridges and higher taxes, for the Metropolitan Transportation Authority. (more…)

In a move designed to meet New York City’s pressing transit fiscal needs, New York City Comptroller William C. Thompson, Jr. today unveiled a plan to impose a weight-based registration fee on private and commercial vehicles. (more…)

By James T. Madore

Gov. David A. Paterson is warning that next year’s budget will be “grim,” with retrenchment virtually everywhere, from schools and hospitals to building projects and social welfare agencies.

The cuts will probably be deeper because of last week’s failure by Paterson and lawmakers to close a $2-billion hole in the 2008-09 spending plan. That red ink now must be rolled into the projected $12.5-billion deficit for 2009-10, precipitating reductions in spending rather than slowing its growth. (more…)

By Malcolm A. Smith

Gov. David Paterson’s proposals for significant cuts to the state budget are a prudent acknowledgment that our nation’s economic problems and the continuing crisis on Wall Street will force big changes in the way we do business in Albany.

We’re going to have to slash state spending. We’re going to have to find unprecedented new efficiencies in government administration.

And we won’t be able to avoid cuts to some programs that provide valuable services. There’s simply not enough money available to pay for everything state government has funded in recent years.

But most of all, we’ll need bigger and stronger state-federal partnerships than ever. (more…)

By Rick Karlin

Amid crisis, state pays $21,000 for mansion rug

Gov. David Paterson’s energetic response to the state budget crisis has been the hallmark of his tenure, but even as he was ordering state agencies to cut their spending and warning of even tougher times ahead, his Office of General Services was buying a $21,000 custom-stitched 10-foot-by-15-foot antique carpet for the governor’s mansion. (more…)

By James T. Madore and Juliann Vachon

Unable to reach agreement with lawmakers on the budget deficit, Gov. David A. Paterson said yesterday he would act unilaterally while preparing next year’s fiscal plan.

“There are some ways that I can still undertake, and will, to try to save the state further money,” he said in Washington.

“But we’re talking about a few hundred million dollars, perhaps topping out at a billion dollars. The problem is that there are 14 billion dollars to go,” he added. (more…)

By Irene Jay Liu

Gov. David Paterson may have sounded the alarm on the state’s fiscal crisis, but it was drowned out Tuesday by partisan bickering and political rhetoric from state leaders, who did nothing to address the state’s looming $1.5 billion budget deficit in what was supposed to be a special session.

The governor and legislative leaders failed to reach an agreement on the $2 billion spending cuts that Paterson requested for this year in anticipation of the scheduled session, and said he does not expect the Capitol to address the issue until January, when Democrats will take control of Senate for the first time in 40 years.

Instead of the planned legislative session, the governor and leaders of the Senate and Assembly participated in a public meeting in front of the assembled media — an hourlong piece of political theater during which all participants voiced grievances, pointed fingers and argued over the reasons why they were not able to act, all the while acknowledging the severity of the problem that brought them there in the first place. (more…)

By Kenneth Lovett and Glenn Blain

A special fix-the-budget session fizzled Tuesday as Gov. Paterson and legislative leaders fought and bickered, but did nothing to remedy the fiscal crisis.

“If it looks like a dysfunctional government and it acts like a dysfunctional government, it may actually be one,” a frustrated Paterson said shortly before the brief session. (more…)

Full Story: Better Budget

BALCONY Co-Chair Alan Lubin was honored for his work on behalf of the Medicare Rights Center Wednesday Night November 12th in New York.

Lubin is seated in middle of photo along with other BALCONY supporters, Peter Slocum of the American Cancer Society (lower left) and attorney Jeffrey Krinsk (lower right) . Joining them are: Adria Linehan BALCONY Health Care Advocacy Coordinator, Lou Gordon BALCONY director, and Eleni Delimpaltadaki of Opportunity Agenda and a member of the BALCONY issues advisory council.

Paterson’s plan set for release today has “reductions across virtually every area of state spending”

By Casey Seiler and James M. Odato

Gov. David Paterson will unveil $2 billion in budget cuts this morning, less than a week before the Legislature returns for a special session to address the state’s ballooning deficit.

The proposal will include “reductions across virtually every area of state spending,” said Risa Heller, the governor’s communications director, in a statement.

“Given the magnitude of this crisis, the only way we are going to be able to get New York’s fiscal house in order is through shared sacrifice,” the statement continued. “Just as families across the state must adjust to changing financial circumstances, so must our government and those who rely upon state funding.”

The cuts will be discussed in detail at a news conference scheduled for 11 a.m. at the governor’s New York City offices.

Some details of the proposals emerged on Tuesday. Sources familiar with Paterson’s plans for reducing health care expenses said across-the-board cuts are planned, with hospitals, nursing homes and home care programs being hit to different degrees. Cuts to the funds provided to hospitals and nursing homes could reach 8 percent, while home care may escape with a 2 percent reduction in aid.

In education, Paterson has been proposing almost $100 million in cuts to public colleges. He also wants university professors and other public employees to increase their participation in health insurance costs, said Alan Lubin, executive vice president of the New York State United Teachers.

Insurers will also suffer some additional costs: The governor is expected to ask for another $120 million in fees called “covered lives assessments” on health insurance policies, bringing the total revenue derived from the fees to well over $1 billion. The assessments tend to drive up the costs of policies.

Former Gov. Eliot Spitzer sought $190 million in additional covered lives assessment fees. After legislative push back, Spitzer won just $70 million for this year’s budget, leaving the remaining $120 million for another budget fight — apparently the one Paterson is now waging.

“They’re going back to the well on everything that’s been rejected by the Legislature in recent years,” a top legislative aide said.

The cost controls Paterson will propose today will likely approach $500 million in Medicaid savings.

Tuesday afternoon, Paterson was in Syracuse discussing the fiscal crisis at a town hall meeting — his second in two weeks. While he would not discuss details, the governor described the cuts as both painful and necessary.

“We’ll be operating a big knife, but trying to operate it like a scalpel,” he told the audience.

In Tuesday’s appearances and interviews, Paterson apparently for the first time broached two ideas for future consideration: a repeal of the gasoline tax cap, which is currently set at $2 per gallon, and the possibility of targeting education cuts so that wealthy districts sustain the most reductions ­— a measure that would have direct negative effects on Long Island, where state Senate Majority Leader Dean Skelos has won significant additional funds for schools in his power base.

Following the hour-long town hall session — hosted by Susan Arbetter of WMHT — Paterson spoke to reporters on the likely reaction to his plan from unions, advocates and municipal leaders.
“I completely sympathize with the pain that they may have to ask of some of the members of their unions, some of the employees of companies, some of the operations of local governments that may be hindered,” he said.

“This is why I’m trying to make it clear how serious the situation is. And as long as I think I’m just dealing with those who haven’t fully understood the crisis yet, then I don’t mind doing it. But the kind of (criticism about) who’s winning and who’s losing, who got cut and who didn’t get cut — this is not a reality TV show; this is not a game. This is a very serious situation that involves the survival of the people of New York and the quality of their lives.”

Paterson had previously issued a call for leaders of the state Assembly and Senate to provide their ideas for cuts to his office, with a deadline of last Friday. None were offered.

“I think Republicans and Democrats have got to recognize how much the public is watching, how much citizens know how bad the budget deficit is,” Paterson said in his news conference. “So I think that whether you’re a lame duck, whether you’re a growing duck or whatever it is, that you don’t duck your responsibilities.”

“… This is not campaign time,” Paterson added. “During the campaigns, when I heard they weren’t going to cut this and they weren’t going to do that, I dismissed it — because nobody campaigns by telling you what they’re going to cut. But now it’s time for governance. And what leads to unsuccessful campaigns is a lack of good governance.”

Capitol insiders suggest that Paterson’s plan will be just the beginning of an elaborate back-and-forth with public-policy stakeholders — including the Legislature as well as labor unions and special-interest groups — that could continue well beyond the mid-December release of Paterson’s proposed budget and the installation of the new Assembly and Senate in January. The state budget has a March 31 deadline, although it has been exceeded numerous times in recent decades.

Next week’s special session will take place amid a thick fog of post-election politics. The Republican majority in the state Senate appears to be on its way out after last week’s losses, although the chamber’s Democrats have spent the last week dealing with a quasi-revolt by the so-called “Gang of Four,” an independent caucus that has threatened to withhold support from current Minority Leader Malcolm Smith.

One of the four, Senator-elect Hiram Monserrate, broke away from the group by announcing his support for Smith’s leadership over the weekend. The remaining three — Sens. Carl Kruger and Ruben Diaz Sr. and Senator-elect Pedro Espada Jr. — met Tuesday to discuss their plans; according to The New York Times, the three will not make their leadership pick until January.

Talking to reporters Tuesday, Paterson said any leadership dispute should be focused on the question of “who can govern better.”
“But I’m not hearing that in these conversations,” he said. “I’m hearing who’s going to get a better deal, who’s going to get a better committee assignment. One of [the four] said they want to be the majority leader. … And I would say that this is the sort of superfluous type of selfishness that’s gotten us into this mess in the first place. Right now, we need serious people who are ready to address this budget deficit.”

The Senate Republican conference is planning to meet at the Capitol today.

On Thursday, the Assembly’s Ways and Means Committee will hold its second hearings on the impact of the economic crisis. The committee will also review the governor’s proposals.

Casey Seiler can be reached at 454-5619 or by e-mail at cseiler@timesunion.com.

The knife

Likely elements of Gov. Paterson’s budget-cutting package:

Cuts to public colleges and universities of $100 million

Increased health care insurance contributions by state workers

An 8 percent reduction in aid to hospitals and nursing homes

A 2 percent reduction in home health care aid

For final detail of the governor’s plan, visit timesunion.com and the Capitol Confidential blog (http://blogs.timesunion.com/capitol) throughout the day.

“This is a very serious situation that involves the survival of the people of New York and the quality of their lives.”

Gov. David Paterson

Groups Providing Critical State Services Call on Paterson to Stop Exempting Wealthy New Yorkers from Budget Pain and to Use the Tax Stabilization Reserve Fund to Fill the Gap!

(Albany, N.Y)— On the day Governor Paterson is announcing billions in budget cuts, the Better Choice Budget Campaign and the One New York: Fighting for Fairness joined together to call on the Governor and legislative leaders to abandon a budget policy that calls on working families and vulnerable New Yorkers to bear the burden of the state’s fiscal crisis.

  (more…)

The Wall Street Meltdown was not created by working men and women and they must not be forced to bear the brunt of New York State’s Budget Crisis.

Destruction of the public workforce, schools, state services and health care would leave our state with a terrible economy, hasten our decline and dramatically impact the ability of small businesses to survive.

The state must be more realistic in its solutions to repair the budget shortfalls. Just as the federal government has moved quickly to support the financial sector with almost a trillion dollars, so too must Washington provide the assistance necessary for New York State and other states.

By Valerie Bauman

Three of New York’s most powerful public employee unions say they won’t reopen contracts to any concessions despite the state’s fiscal crisis, delivering an early blow to Gov. David Paterson’s plans to fill a $2 billion deficit next week.

“I don’t see any local leader wanting to come to the table to give something up,” said Richard Iannuzzi, president of New York State United Teachers. “So, if there’s an incentive being offered in exchange for what they would be giving up, then local leaders may entertain that.”

Civil Service Employees Association President Danny Donohue said reopening contracts is “not acceptable.”

It’s unclear what incentives may sway employee unions, which carry tremendous power with lawmakers in Albany.

Ken Brynien, president of the Public Employees Federation, said “nothing that comes to mind” would be incentive enough for his union to reconsider opening labor talks.

“I don’t believe that further reduction in staff would benefit the taxpayers of the state,” he said. “We’re having a difficult enough time providing services.”

Paterson wants $2 billion in spending cut from what remains of the $120 billion 2008-2009 budget. He just returned Monday to New York from Puerto Rico, where he was attending a conference sponsored by the Assembly Puerto Rican/Hispanic Task Force. Paterson said the recession, overspending by the state and Wall Street’s meltdown will result in $47 billion in deficits over the next four years if nothing is done.

“The governor will be releasing his proposals later this week,” spokesman Jeffrey Gordon said. “And he has said that, given the magnitude of our fiscal crisis, no area of state spending can be off the table.”

The governor is expected to issue further budget-cutting proposals Wednesday.

The biggest chunks of the state’s $120 billion budget are Medicaid and school aid, which have historically been protected by the powerful unions. But Paterson has said billions of dollars in cuts next year and midyear cuts to school aid are all on the table.

Even if the unions agree to contract talks, it’s unclear how much New Yorkers would know about the fiscal impact of contract negotiations before any agreements are ratified, said Lise Bang-Jensen, a senior fiscal policy analyst for the fiscally conservative Empire Center for New York State Policy. The state does often release a list of changes the contracts would include in advance, but that doesn’t always include fiscal details.

In New York, details of collective bargaining agreements with public employee unions are at times under a “shroud of secrecy,” offering local governments protection from public protest and the unions heavy sway during negotiations, Bang-Jensen said.

Johnson City, about 64 miles south of Syracuse, faced major shortfalls after the village board approved a new contract with the firefighters union to raise salaries by 33 percent in five years. Village officials later admitted salaries would actually go up by 41 percent in five years.

The village faces budget shortfalls and doesn’t have enough money to pay firefighter salaries after Jan. 29, 2009.

“We’re talking about a lot of money here, and the public should know in advance where it’s going and how much is being spent,” Bang-Jensen said.

Most of the biggest contracts in New York state spending are settled, including CSEA, PEF and the United University Professions.

Union officials say there are other ways to cut spending and supplement the budget without layoffs or concessions.

Those ideas would benefit unions by including tax hikes for the rich and eliminating the use of independent contractors instead of state employees.

By Danny Hakim

SAN JUAN, P.R. — Gov. David A. Paterson said in an interview on Sunday that he would almost certainly seek billions of dollars in cuts to Medicaid, as well as midyear reductions in school aid, to address New York’s worsening fiscal condition.

He also said he expected to urge labor unions to reopen the contracts they have struck on behalf of public employees as a way to avoid or decrease layoffs.

Such a step is reminiscent of measures taken by New York City in the financial crisis of the 1970s or moves made more recently by the Big Three domestic automakers to reduce their labor costs after years of granting steady raises and comprehensive health and pension benefits.

Those same types of wage and benefit concessions have long weighed on New York, though the catalyst for the state’s current predicament has been the collapse in tax revenue from Wall Street.

The governor, who spent more than two decades as a state senator representing Harlem, said he would be forced to cut even programs he sponsored as a legislator, and he expected to preside over a turbulent period for the state government.

“There’ll be protests, and because of the drastic nature of the cuts, those who protest will have very valid points, for which I don’t have any answer, other than ‘What’s your idea?’ ” Mr. Paterson said. “We’re not going to close a $12.5 billion deficit with 5 percent cuts to health and education.”

Asked if the cuts for education and health care programs would be in the billions of dollars next year, he said, “Unquestionably.”

His comments, made during an interview between sessions at a conference held here by Latino lawmakers from New York State, put to rest any doubts about the depth of the state’s fiscal crisis.

Some of the cuts will be sought when lawmakers return to Albany on Nov. 18 for a special session to help close a $1.5 billion budget gap for the current fiscal year, which ends in March, and to get an early start on next year’s budget. Any cuts would need support from the Legislature. And the governor will have to propose far steeper cuts when he introduces a budget next month for the fiscal year that ends in March 2010 — that budget will need to close a $12.5 billion deficit.

Cutting school aid in the middle of the school year, if it comes to pass, will represent an about-face from the sharp increases undertaken by former Gov. Eliot Spitzer to end years of court challenges by advocacy groups that contended that New York City schools were being shortchanged by Albany. The state has not made midyear school aid cuts since the early 1990s, and schools in New York City and elsewhere are already feeling the pinch as municipalities cut their own budgets.

Since taking over in March, after Mr. Spitzer’s resignation, Mr. Paterson has been aggressive in sounding the alarm about the state’s fiscal woes, at times even suggesting that his predecessor’s staff should have moved more quickly to prepare for the recession.

But the governor, who has sometimes made his liberal base uneasy with his newfound mantra of cost-cutting, has by far his toughest fights ahead of him. Reopening labor contracts would prove difficult, because state law bars the government from unilaterally altering the terms of such agreements, though the unions might face the threat of layoffs if they refused.

“They realistically see that it’s one of the options that I would have to examine, and I realistically understand that that really is a place that they don’t want to go,” Mr. Paterson said.

“There is only a harm if the union sees it as a harm,” the governor added. “As long as the union sees that as a viable option in lieu of layoffs, then I think you have a partnership.”

Mr. Paterson said he had not broached the issue with labor leaders in so many words, though he believed they knew it was a subject on the horizon.

“No one actually has said it, but we say things to each other like, what we said back in September was, ‘If this gets any worse, we know what we’re going to have to do,’ ” he said.

How the Legislature will respond remains to be seen; Mr. Paterson must negotiate with the Senate amid significant leadership turmoil.

Dean G. Skelos, the Senate majority leader and a Long Island Republican, has vowed to block education cuts in the Nov. 18 special session — “New York State must not balance its budget by offloading its costs to schools,” he said recently, and he has been hailed by teachers’ unions for ruling out such cuts.

But Democrats won 32 of 62 seats in the Senate in Tuesday’s election, winning a majority for the first time in more than four decades. Three Democrats, however, have yet to commit to supporting the Senate minority leader, Malcolm Smith, a Queens Democrat, as majority leader when the new Legislature is seated in January.

That leaves the Senate’s leadership uncertain at an inopportune moment. Mr. Smith said little to reporters this weekend. Both he and Mr. Skelos were here to woo two key Latino lawmakers who had not yet decided whom to support as leader.

Dan Weiller, a spokesman for Assembly Speaker Sheldon Silver, the Legislature’s top Democrat, said, “The speaker has said repeatedly that everything is on the table and that we’re prepared to work with the governor and the Senate to make tough choices.”

Cuts in school aid and Medicaid are sure to be contentious. Unions representing teachers and hospital workers are among the most powerful special interests in Albany and have waged high-profile publicity campaigns in the past to ward off such cuts.

“Obviously, we will argue strongly against it,” said Richard C. Iannuzzi, president of New York State United Teachers.

“It’s not like putting off a construction project or an investment; you’re talking here about a year in a child’s life,” he said. “It’s hard to make that up.”

Mr. Iannuzzi’s union also encompasses the United University Professions, a local that represents tens of thousands of faculty members at state universities. While he acknowledged that layoffs were “a threat the governor has the ability to make,” he was cool to the idea of reopening labor contracts.

“If the only purpose in reopening it is to take something out, I don’t see a lot of our locals entering into that conversation,” he said. “If there is some incentive that appeals to them, then we’ll enter into that conversation.”

Mr. Paterson also said a number of steps were being considered, including long-term leases of state assets; he has already set up a commission to study such proposals.

“I don’t want to do things that affect the ability of future legislators and governors to govern,” Mr. Paterson said, “but I do want to find ways to leverage some of the assets we have.”

In more flush times, raising money through gimmicks or “one-shot” infusions of capital raised by selling assets or privatizing state resources was frowned on by budget watchdogs. But, the governor said, “we’re in a one-shot period” because of “the sheer volume of the deficit.”

Mr. Paterson said he was girding for the backlash.

“I don’t need a protest for it to bother me; I used to fight for some of these causes,” he said, adding that the situation would only worsen by waiting.

“I’ll feel pain in my stomach,” he said, “but my conscience will be clear.”

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.

Political consultants and the media began creating labels for women voters eight years ago. First, it was the Soccer Mom, a symbol of the stress and rewards of prosperous women raising active children. Next was the Security Mom, a symbol of our nation’s fears after 9/11.

This election year, we met the Waitress Moms — mostly worried about keeping a roof over their heads and putting food on the table. Many are in dead-end jobs and raising children alone. Their lives are defined by overwhelming economic insecurity. The American dream — the fundamental belief that hard work can build a better life — isn’t on the menu of Waitress Moms.

The tie that binds the Soccer Mom to the Security Mom to the Waitress Mom is that presidential candidates have needed their votes. But, in prior elections, candidates offered few real policy solutions to address the stresses in the lives of these women. The same can be said of this year’s presidential candidates.

At the Heinz Family Philanthropies, we have identified three very real challenges Waitress Moms face. More important, we propose real solutions.

The challenges
First, Waitress Moms can’t depend on their jobs. All low-wage workers face limited opportunities for advancement. For women, residual sexism limits them further.

Second, Waitress Moms can’t depend on their families. More often, their families depend on them. Estimates suggest that caregiving middle-aged women experience 40% fewer paid work hours than those who don’t provide care. Also, women caregivers lose about 10% of their median annual incomes in related out-of-pocket expenses. This equates to less money saved, lower Social Security benefits, smaller (if any) pensions, and thinner resumes.

Third, Waitress Moms can’t depend on existing social safety nets. Medicaid is not a health care fallback for them. So they go without. But when they can no longer go without, they head to the emergency room. And Social Security fails Waitress Moms by not counting their years of caregiving toward the credits they need to earn a benefit.

Meaningful solutions
This is the tough reality for Waitress Moms. But it doesn’t have to be. Our next president has an opportunity to tackle their struggles and help them step toward the American dream.

• Improved access to child care: We can make accessible and affordable child care more available. We could provide tax incentives for employers to underwrite the costs of on-site childcare, or refundable tax credits for Waitress Moms to help defray expenses. Improved access means more women who can commit more hours to earning a paycheck.

• Equal opportunities for saving: It’s hard enough in this economy to save money. For women, out-of-date rules make it harder.

Take a look at the current rules for food stamps or Temporary Assistance for Needy Families (TANF). To be eligible, a woman who loses a job must spend down her assets to $3,000. If she owns a $125,000 home, she rightfully gets to keep it. But if she manages to put away $15,000 toward buying a home and then loses her job, she has to spend it down to $3,000 or risk losing assistance. Changing this law would help bring security to millions of Waitress Moms.

Further, few waitress jobs come with a retirement savings plan. Government should provide incentives for low- and moderate-income savers in the form of a matching contribution to a tax-deferred account.

• Protect and strengthen Social Security: The gender wage gap turns into a retirement asset gap due to women’s caregiving years out of the workforce. Waitress Moms must be assured Social Security will remain a reliable source of income. Today, benefits are calculated by averaging monthly income over the 35 highest-earning years. Women who take time away for caregiving get zeros factored into their calculations. This lowers their benefits.

We should calculate benefits for women caregivers based on their highest 30 years of income to give them five years’ credit. It increases the benefit and sends a message that our society values raising the next generation and taking care of the last one.

The candidates who emerged as the winners in Tuesday’s election need to get beyond the campaign label and commit to improving the lives of Waitress Moms.

When the media forget Joe the Plumber, these women will still be working hard to help their families stay afloat. Waitress Moms are real women with real problems. They work hard to make do, and always put family first.

TERESA HEINZ KERRY is chairman of the Heinz Family Philanthropies. Detroit native JEFFREY LEWIS is the organization’s president. Contact them at jlewis@heinzoffice.org.

By Clare Trapasso

Workers at a chain of city-supported Queens day care centers who said they were fired after forming a union are fighting to get their jobs back.

But a company official denied they were let go due to union activities.

Annette Olivero and 17 other Books & Rattles workers said they were fired several weeks after about 90 workers voted to join the Communication Workers of America Local 1180 in May. (more…)

By Valerie Bauman

New York Gov. David Paterson is ruling out borrowing as state leaders try to close a $1.5 billion budget gap in the last five months of the fiscal year.

Paterson says he fears rating agencies would downgrade the state’s credit standing if New York used loans to address the financial crisis. (more…)

Paterson, testifying before House committee, says government must pass an economic stimulus package to provide financial relief to states

By Juliann Vachon

As New York faces mounting budget shortfalls and a national financial crisis, Gov. David A. Paterson called on Congress yesterday for immediate aid, saying the federal government should help states cope with widespread economic turmoil.

Testifying before the House Ways and Means Committee, Paterson urged Congress to urgently pass an economic stimulus package that pours fiscal relief directly into New York.

Paterson’s testimony came a day after he announced the state faces a $47-billion budget gap over the next four years - the largest in New York’s history. State legislators have already started making spending cuts, but Paterson said federal help is still needed to reverse budget shortfalls.

“We are cutting all we can and we will cut all that we are able to, but inevitably, the deficit is too voluminous for us to address,” Paterson said. “We feel that targeted, sensible action by the federal government could provide relief for us now.”

Democrats in Congress are considering a second stimulus package - but one more focused on government spending designed to create jobs and not on one-time tax rebate checks. President George W. Bush has been cool to the idea, so Democrats may have to wait until next year, and hope they’ll have Barack Obama in the White House to support the plan.

Another governor, Republican Mark Sanford of South Carolina, disagreed with Paterson at the hearing and pleaded with Congress to avoid another stimulus package.

“If we simply add more money at this time and in essence bail out what are in some cases unsustainable programs, I think that we end up with real problems down the road,” Sanford said.

But Paterson said New York deserves federal help because it “has been shortchanged for years when it comes to aid from Washington.” In 2007, the state sent $86.9 billion more in taxes to the federal government than it got back.

Speaking to committee chairman Rep. Charles Rangel (D-Harlem) and other members, Paterson ran through a list of initiatives needing federal aid, such as repairing infrastructure, boosting the food stamp program, extending emergency unemployment benefits and putting a moratorium on federal regulations that harm state budgets.

Paterson, in his written testimony, also blamed the federal government for allowing financial institutions to go unregulated to the point of near-collapse.

“States didn’t cause this crisis and we shouldn’t be left to deal with it alone,” he said. “A rescue package from the federal government will help soften the blow for average Americans.”