Jan. 22 (Bloomberg) -- New York Governor David Paterson tomorrow will name his choice to fill the U.S. Senate seat vacated by Hillary Clinton, who became secretary of state under President Barack Obama.

Paterson, a Democrat, will make the announcement at noon tomorrow in Albany, his office said.

“The governor is now entering the final phase of his selection process. He has not informed any Senate candidates that they have not been selected,” his spokesman Errol Cockfield said in an e-mailed statement. “Any speculation to the contrary is both inaccurate and inappropriate.”

Caroline Kennedy earlier this week asked Paterson to remove her from consideration for the seat, citing unspecified personal reasons. Paterson’s office said the decision was Kennedy’s alone and he considers her a friend. No information “gathered during this selection process created a necessity for any candidate to withdraw,” the statement from his office said.

“I informed Governor Paterson today that for personal reasons I am withdrawing my name from consideration for the United States Senate,” Kennedy said in an e-mail sent early today by her political consultant, Stefan Friedman.

Taxes, Household Worker

Kennedy, 51, the daughter of President John F. Kennedy, had sought the New York Senate seat held by her slain uncle, Robert F. Kennedy, from 1965 to 1968. The vacancy formally arose yesterday when Clinton resigned after the Senate confirmed her to serve as secretary of state the Obama administration.

Kennedy’s decision to withdraw was due to problems involving taxes and household employees, the New York Times reported, citing an unnamed person close to Governor David Paterson.

The newspaper quoted the unnamed person as saying Paterson never intended to pick Kennedy because he had come to consider her unready for the job. An aide to Kennedy said today that while she hadn’t been assured she would get the job, an associate of the governor informed her that she was in “close consideration” as late as yesterday morning and dropped out after learning of an unspecified “personal situation.”

The governor has said he is considering as many as 20 candidates, including state Attorney General Andrew Cuomo and U.S. Representatives Carolyn Maloney and Kirsten Gillibrand. Cuomo, the son of former Governor Mario Cuomo, had the most support among New York State voters in a Jan. 14 Quinnipiac University Poll. Maloney got 6 percent and Gillibrand, 2 percent.

Kennedy learned of the unspecified “personal situation” late yesterday afternoon, and called the governor soon afterward to withdraw, said an aide. The governor asked her to take 24 hours to think about the decision, and she thanked him and agreed to give it more thought, the aide said.

Decision to Quit

“In the meantime the story broke in multiple outlets that she was dropping out,” the aide said. “She took some time to think and speak with people close to her, and then she called the governor between 10 and 11 p.m.” to tell him to remove her name from consideration.

The aide said the “personal situation” had nothing to do with the illness of her uncle, U.S. Senator Edward Kennedy, who has battled brain cancer since his diagnosis in May, and who collapsed during an Inaugural lunch honoring Obama on Tuesday.

“We’re not going to talk about it further except to say that it’s a ‘personal situation,’” the aide said.

Choice to Make

Political analysts say Paterson’s choice might have to raise as much as $80 million to wage two campaigns in two years: a special election in 2010 when Paterson, who became governor upon Eliot Spitzer’s resignation last year, is also on the ballot, and a second election for a full six-year term to be held in 2012.

Also running in 2010 are two-term Democratic U.S. Senator Charles Schumer of Brooklyn and state Comptroller Thomas DiNapoli of Long Island.

“Cuomo and Kennedy were the only two in the group who could be assured of raising the $80 million to $100 million it would take to win two elections in that short amount of time,” said political consultant Joseph Mercurio.

Paterson’s insistence upon waiting until Clinton’s confirmation wasn’t required by law. Colorado Governor Bill Ritter appointed Denver Public Schools Superintendent Michael Bennet Jan. 3 after Obama tapped former Senator Ken Salazar to become secretary of the interior.

Paterson, who has never run for office statewide on his own before, “has to approach the Senate appointment decision with deep concern about his electoral future, because the wrong choice could be a serious problem,” said political consultant Hank Sheinkopf, who has at one time or another worked for several of the candidates who have talked to the governor about the job.

To contact the reporter on this story: Henry Goldman in New York City Hall at hgoldman@bloomberg.net; Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net.

Last Updated: January 22, 2009 19:08 EST