New York's Paterson Plans to Cut Welfare in Next Stopgap Spending Measure

New York Governor David Paterson said he’ll push lawmakers to cut welfare and mental-health spending in the next weekly appropriations bill needed to keep state government operating while its annual budget remains unfinished.

The reductions would help close an $8.5 billion budget gap for the year that began April 1. Paterson said the adjustments to the programs were part of the $955 million of cuts and savings he proposed for the two areas in his 2011 budget earlier this year. He intends to include them in the bill he plans to send to lawmakers for a vote June 14.

While shrinking the deficit by cutting programs in weekly spending bills isn’t normal, “piecemeal is better than no meal,” Paterson said today at a meeting in Albany with Assembly and Senate leaders. Without “emergency action” to reduce its costs, he said the state would eventually become “insolvent.”

With no spending plan in place 70 days into the fiscal year, the state has fewer than 10 months to cut costs or raise enough money to close the budget gap, Paterson said.

The next appropriations bill may include annual spending cuts and savings of $150 million in mental-health programs and $175 million from welfare and other human services, said Erik Kriss, a spokesman for the division of budget.

Casting Blame

Democrats and Republicans spent much of the meeting blaming each other for the budget impasse and saying which side would be responsible if Paterson’s next weekly spending bill doesn’t pass, leaving the state without authority to pay workers and some of its bills.

Senator Pedro Espada, a Bronx Democrat who helped shut down the chamber in June 2009 by switching his vote to the Republican side, has threatened to do so again on the next emergency appropriations bill.

“I will not continue to hurt the people in my district by voting for an extender with massive cuts to education and other programs,” he told the New York Post.

Senate Democratic Leader John Sampson of Brooklyn, after speaking with Espada late yesterday, said today he still will muster the 32 Democratic votes needed to pass the spending bills in that chamber. Democrats hold a 32 to 30 majority in the Senate and a 108 to 42 advantage in the Assembly.

Republicans’ Recommendations

Senate Republican leader Dean Skelos of Rockville Centre, Long Island, said the risk of a state shutdown could be reduced if Paterson included in next week’s bill additional spending cuts to Medicaid, human services and mental health recommended by Republicans. After meeting Paterson today, Skelos said the governor agreed to consider the proposals.

New York, the third-most populous U.S. state, has been operating under weekly spending bills as lawmakers haven’t agreed on a comprehensive budget to close the projected deficit. Leaders of the Assembly and Senate say they can’t amend the weekly bills without shutting down state agencies.

Earlier this week, lawmakers narrowed the gap from $9.2 billion by approving a stopgap spending bill that included $775 million of annual cuts and savings in other health-care programs and Medicaid, the state’s second-largest expense.

In his budget, Paterson proposed reducing spending on human services, including aid to needy families, by $821 million, to $9.7 billion. He sought cuts of $134 million in mental-health services, such as operating residences for the severely afflicted, bringing outlays for the year to $8.5 billion.

To contact the reporter on this story: Michael Quint in Albany, New York, at mquint@bloomberg.net.

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