New York State Prepares for Government Shutdown, Just in Case

As New York lawmakers debate an emergency spending bill to keep the government running for another week, agency heads and their 150,000 workers are making contingency plans if the measure fails, leaving the state without authority to pay all its bills.

According to agency memos, employees were warned of the possibility that buildings might be closed and some of them wouldn’t be working tomorrow if the appropriation bill doesn’t pass by midnight tonight. There are exceptions.

“The state has an obligation to provide essential services to its residents, to protect their health, safety and welfare,” Richard Daines, the health department head, said in a memo. Shutdown or not, some workers will stay on the job. State Police Lieutenant Glenn Miner said troopers “directly providing public-safety services will be ordered to continue to work.”

State Senator Pedro Espada, the Bronx Democrat whose threats to oppose the spending bill ignited warnings of “chaos in the streets” from Governor David Paterson, said June 10 that the government will stay open and he will support the measure.

Even with Espada, the margin of approval is so narrow in the upper chamber that Paterson ordered state agencies to make plans for a possible shutdown. Democrats hold a 32 to 30 majority in the Senate, the minimum number needed to pass bills if all Republicans vote no as they have in the past three weeks.

New York, the third-most populous U.S. state, has been operating on weekly spending bills as lawmakers have been unable to agree on a comprehensive budget for the fiscal year that began April 1. Leaders of the Assembly and Senate say they can’t amend the emergency measures without shutting state agencies.

Deficit Narrowed

Paterson won $775 million in annualized reductions, mostly from the Medicaid program, and savings in last week’s bill. That narrowed a projected $9.2 billion deficit in Paterson’s $135.2 billion fiscal 2011 budget proposal, presented in February, to about $8.5 billion.

In the bill lawmakers will debate today, Paterson proposes an annual spending plan for human services, such as welfare, and mental health, including residential facilities for the disabled, that reduces expenses by $327 million, said Robert Megna, the state’s budget director. That’s less than the governor sought in January, Megna said, as it reflects adjustments to satisfy some requests from legislators.

‘Easy’ to Pass

The bill “will be easy” for lawmakers to approve, Megna said. It includes $3 billion of appropriations for expenses such as subsidies for the poor and summer youth programs “which we think are very important to the Legislature,” he said. The bill doesn’t cancel a 10 percent increase in welfare payments that took effect on June 1, he said.

“We are not going to shut down government and risk the safety and livelihood of millions of New Yorkers,” said Austin Shafran, a spokesman for Senate Democrats, who are led by John Sampson of Brooklyn, in an e-mailed comment yesterday. “As we continue to make progress on a final budget, we expect to pass the emergency extender and meet taxpayers’ needs.”

Paterson told a gathering of reporters last night in Albany that legislators’ comments that the spending bill will pass were “encouraging,” though he declined to predict the outcome of today’s vote. “One never really knows what’s going to happen in the Senate,” he said.

The governor said future weekly spending bills will include spending cuts that are even more unpopular with lawmakers, who want to narrow the deficit by selling bonds. Paterson proposed reducing aid to education by $1.4 billion in the budget he offered at the start of the year.

‘Last Resort’

He called borrowing “a last resort” this month, and said last night it was an option “we have to seriously think about” if the state doesn’t receive an additional $1 billion of federal Medicaid money it has been counting on since February.

The state has appropriated funds and has cash on hand to pay Medicaid and other health-care bills, its bonds, pensions and tax refunds, Comptroller Thomas DiNapoli said in a June 10 statement. State workers may not get paid on June 23 and jobless benefits may be halted, along with payments to contractors and others, should the spending bill fail today, he said.

The late budget is “due to the failure of Democratic leadership,” which has led to “doing a budget piecemeal so we don’t know how each provision in an extender relates to an entire spending plan,” Senate Republican Leader Dean Skelos said in a statement on June 10. He is from Long Island’s Rockville Centre.

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

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