New York Legislators Seek to Restore Some School Aid in Budget Showdown

New York lawmakers, unwilling to approve a budget plan proposed by Governor David Paterson, prepared an alternative that cuts less aid to schools and universities and authorizes spending to avoid a government shutdown.

The plan drew criticism from the governor’s office. A statement by Paterson’s spokesman, Morgan Hook, said it lacked revenue proposals to close the state’s $9.2 billion deficit. The governor called for a special legislative session today to take up budget issues, including the need to prepare for a $1 billion revenue loss if the U.S. Congress doesn’t approve more Medicaid health-care funding.

“In typical Albany fashion, the Legislature is now touting its spending and restorations to the governor’s proposed cuts, while failing to provide a way to pay for them,” Hook said in a statement.

Assembly Speaker Sheldon Silver, a Democrat from Manhattan, said the state’s finances require spending cuts.

“However, we are committed to sparing our schools from the most devastating cuts and ensuring that our higher education system remains accessible to all New Yorkers,” he said in a statement.

Budget negotiations are continuing and a closing of state government will be avoided, Senate Democratic Leader John Sampson of Brooklyn said in a statement.

Paterson Plan

Two days ago, Paterson submitted a plan to finish the budget for the fiscal year that began April 1, in what would be the 13th weekly emergency bill to keep the nation’s third-most populous state running. In the absence of a comprehensive budget, the governor has shuffled funds between accounts and delayed payments to schools and contractors as cash dwindled. Lawmakers can’t modify the emergency bills, only pass or reject them.

The plan agreed to by Sampson and Silver would finish appropriations for most of state government not covered by Paterson’s earlier bills, eliminating the weekly threat that government would shut if the emergency spending measures aren’t approved.

Lawmakers would restore $600 million of the $1.4 billion of cuts in state aid to local school districts proposed by Paterson, according to statements the legislators issued. Paterson’s plan would reduce the cuts to $1.2 billion, Budget Director Robert Megna said.

School Funds

The legislators provided more money for the state and New York City university systems, their statement said. Silver has opposed Paterson proposals to give universities flexibility to increase tuition without legislation, and impose a cap on annual increases in property taxes by local schools and governments.

Paterson, a Democrat who isn’t running for re-election in November, said last week the budget plan needs $920 million to $1.2 billion of additional revenue.

Lawmakers last week approved plans to raise $440 million from higher taxes on cigarettes and tobacco, and collecting the cigarette tax on sales from American Indian Reservations to non- tribe members. Lawmakers didn’t endorse Paterson’s proposal to raise $330 million by applying the state’s 4 percent sales tax to clothing purchases of less than $110, which are currently exempt from the charge.

While Paterson can call lawmakers back to Albany, he can’t compel them to vote on the bill he proposed June 25, said Travis Proulx, a spokesman for Sampson. Paterson’s bill included measures that wouldn’t pass both chambers as required, so additional talks are needed, Proulx said.

Senate Majority

Senate Democrats hold a 32-to-30 majority that is the minimum needed to pass legislation. They have to placate members who oppose spending cuts that hurt low-income constituents, as well as Paterson, who said last week he won’t accept a budget balanced with borrowing or unrealistic revenue assumptions.

A two-thirds vote in each chamber would be required to over-ride a Paterson veto of any or all of the lawmakers’ proposals. In the Assembly, Democrats hold more than two-thirds of the votes.

“Governor Paterson will veto any new member items added” to the spending bills he proposed in January, Hook said.

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

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