Gov. David Paterson and legislative leaders failed to reach any agreement this afternoon on cutting $2 billion from the current state budget after an hour-long, often heated meeting at the state Capitol.

Barbs flew, accusations were logged and there was some yelling, but the state’s top leaders were unable to reach any compromise to deal with New York’s growing fiscal problems.

“I think it is clear that this special session on Nov. 18 will not yield the result that we want today,” Paterson said.

The Democratic governor tried to put a positive spin on the meeting, saying lawmakers made a step toward trying to grapple with the state financial woes.

Yet Paterson walked away with nothing that he hoped and heads into the next calendar year with an estimated $15 billion budget gap that threatens a wide array of services and school funding.

“I think this might be a valuable exercise for us,” Paterson said as the meeting ended. “This might actually be a lesson for all of us in government.”

Lawmakers and Paterson agreed to wait until Paterson releases his 2009-10 budget on Dec. 16 to consider any cuts to the current fiscal year, which runs until March 31.

Lawmakers said that they could come back before the end of the calendar year to make cuts to the current budget, but Paterson suggested that any cuts may not happen until January – when Democrats are expected to take control of the Senate.

Paterson has proposed cutting $836 million in school aid this school year and $527 million to health-care programs. His budget office estimates that the state faces a $47 billion budget gap over the next four years.

Paterson and Senate Majority Leader Dean Skelos, R-Nassau County, (seen above) jawed during the meeting as Paterson suggested Skelos was playing a political game by wanting to vote on Paterson’s budget cuts, allegedly that Skelos knew the vote would fail.

But Skelos fired back that the Republican majority wanted to do exactly what Paterson wanted: a vote on his budget cuts.

“Governor, today the Senate is prepared to honor your request,” Skelos said.

But Assembly Speaker Sheldon Silver, D-Manhattan, and Senate Minority Leader Malcolm Smith, D-Queens, said Skelos making a political move and had no intention of approving Paterson’s cuts.

Smith called it a “charade” and “basically misleading the public that we’re trying to produce something.”

Silver called Skelos’ attempt a “political game” and warned that the state’s fiscal crisis is real.

“The crisis is not, as the Senate majority suggested, exaggerated,” Silver said. “If anything the crisis is even greater than the governor projects and will get worse before it gets better.”
The Democratic governor said he wants a three-way agreement with the Senate and Assembly, saying anything other than that “goes contrary to the process.”