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For Albany, the tough times have arrived

      ALBANY -- For his entire seven months in office, Gov. David Paterson has sounded a common warning: bad times are coming.

   Now, they are here.

   The state's deficit for the current fiscal year is now projected at $1.5 billion. That gap must, by law, be closed, and supposedly will be -- and then some, Paterson hopes -- at a mid-November special session of the Legislature. Lawmakers already have insisted midyear cuts to public schools and tax hikes are off the table.

   Then there's next year: another $12.5 billion in red ink. At that point, no one is really flatly ruling out anything. In Albanyspeak, that means the possibilities are endless: big cuts to popular programs, like education and health, or tax and fee increases, or even deals to sell public assets. Officials insist there will be none of the fiscal gimmicks seen before. Recall the "sale" of Attica state prison in the early 1990s by the Corrections Department to an off-budget authority?

   The overriding question, and one that residents in California have already been facing with their state's fiscal crisis, is whether New Yorkers will have the stomach for real spending cuts.

   Will residents be OK with less state aid for schools? What if it then means higher property taxes to make up the difference? Or, if not, what if it means cutting classroom or after-school programs?

   Will New Yorkers be OK with cutting aid to hospitals? What if it means curtailing some health services or dealing with more crowded emergency rooms?

   Or will they, as some lawmakers think, be open to tax increases? What if they are just on the wealthy? And who would the wealthy be -- considering personal income wealth means one thing in Buffalo than it does on Long Island?

   These questions won't be answered for months. There will be an initial test in mid-November
with the special session to close a $1.5 billion current year gap. But the big test comes
early next year for the fiscal year beginning April 1.

   About the only thing that could change the nightmare scenario is if Wall Street -- whose
activities generate 20 percent of the state's revenues -- has a dramatic rebound based on some
cheery economic news in the next couple months. Unfortunately for Albany, the number of
optimists predicting such an event can be counted on one hand.

   -- Tom Precious

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