Legislative leaders and Gov. David Paterson continued today to discuss ways they could close the state’s $3 billion budget deficit but don’t have a date for when all this would take place.
Paterson, who met for about an hour with members of the Senate and Assembly, said he would call a special session “within two weeks, perhaps next week.”
The governor emphasized that the state will be unable to pay a number of large bills that are due in December, such as $1.6 billion for school aid and $2.5 billion for the STAR tax-rebate program, if the state doesn’t cut spending very soon.
Paterson’s proposal to close the budget gap includes reducing education aid by $686 million through the end of the school year, cutting Medicaid by $287 million, and reducing spending on other health-care programs and mental hygiene by $184 million.
The governor was particularly critical of a proposal by Senate Democrats to refinance the state’s tobacco debt, which Senate Democratic Leader John Sampson, D-Brooklyn, said would create an initial savings for the state of $500 million. The money would help offset cuts to schools, health care and other areas that Paterson included in his deficit-reduction plan.
Tobacco bonds caused a downgrading of the state’s credit rating in 2003 and the refinancing wouldn’t produce $500 million in a year, much less six weeks, the governor said.
The Senate is “going to have to come up with real numbers,” he said, “and remember it’s six weeks away, so you can’t take an annualized projection, which is wrong anyway, and then try to use it to alleviate a problem that’s coming in six weeks.”