Gov. Paterson proposes nearly $1B budget cuts to health care, education

By Kenneth Lovett

Daily News Albany Bureau Chief

Updated Thursday, October 15th 2009, 3:17 PM

[photo of Governor Paterson]

Gov. Paterson is proposing nearly $1 billion budget cuts to health care and education combined to deal with the state's $3 billion deficit.

ALBANY - City schools and the cash-strapped MTA are the biggest losers under Gov. Paterson's $5 billion fix to the state's ballooning budget gap.

Instead of complaining, Mayor Bloomberg praised Paterson for "trying to treat everyone fairly with evenly distributed cuts."

"One of the most serious threats to New York City's future is the possibility that the state will not get its fiscal house in order quickly," Bloomberg said.

Paterson Thursday proposed about $2 billion in statewide cuts and $1 billion in one-time fiscal gimmicks, including a tax amnesty program, to raise revenue.

The total plan would save the state $5 billion over the next two years, Paterson said.

He did not ask for tax or fee hikes or state employee layoffs.

He proposed rare midyear cuts of $223.2 million for city schools and $113 million for the MTA in an effort to plug a projected $3 billion deficit in this year's budget.

The city also would lose $26.2 million in municipal aid and about $732,000 in health care funds, not counting private city hospitals.

Not acting quickly will cause cash flow problems as soon as December, Paterson warned.

"New York is ground zero for the fiscal crisis," Paterson said. "This is a painful plan, but we will share the burden."

Paterson, looking to resurrect his political standing, faces an uphill battle with the Legislature, which has avoided making politically unpopular cuts.

"We're not going to succumb to his hysteria, nor are we necessarily going to accept his forecasting," said Senate Finance Committee Chairman Carl Kruger (D-Brooklyn).

Kruger and Democratic Conference Leader John Sampson, who is in China this week, indicated little support for cutting school and health funding.

Insiders said Assembly Speaker Sheldon Silver is unlikely to bring his members back to vote on a plan unless there are guarantees the fractured Senate is on board.

MTA board member Andrew Albert warned that proposed mass transit cuts could force fare hikes and service cuts.

City teachers union President Michael Mulgrew said the city must find ways to save without cutting programs.

"While we all recognize the state's fiscal condition, the children in New York City's classrooms should not have to bear the brunt of these cuts," Mulgrew said.

The powerful city health care union said the proposed cuts "will be aggressively opposed with every resource at our disposal."

Others, particularly in the business community, cheered the governor.

"While the 'spending lobby' will surely attack this plan with hysteria, Gov. Paterson is right to demand that New York end its culture of unsustainable taxing and spending," said Kenneth Adams, president of the state Business Council.

Paterson wants the Legislature to address the problem on Oct. 27.

klovett@nydailynews.com