No Deal on Deficit Plan Yet

By Karen DeWitt

Albany, New York – For the second week in a row, Governor Paterson has called state lawmakers back to the Capitol to try to resolve the state's financial crisis, but on Monday, they seemed further apart than ever.

The week began with the state's projected deficit growing, slightly. That's because Governor Paterson relented, and rescinded a plan to charge New York motorists $25 additional dollars for mandatory new license plates beginning next spring. The governor, in an interview, says now it's up to the legislature to find a way to make up for the $129 million dollars in revenue that the plan would have brought to the state's coffers.

"For all that New Yorkers are going through, I'd like them to feel that their governor hears them," said Paterson. "But now I want New Yorkers to hear me."

The governor says the replacement revenue must be "real and recurring".

But the governor seemed even further from getting some factions in the legislature to agree to his deficit reduction plan. While Assembly Democrats have been willing to negotiate, Democrats who control the Senate have given mixed signals. Over the weekend, several upstate and suburban Democrats said they were against Paterson's plan to cut school aid by nearly $700 million dollars in the middle of the school year, making it certain that there would not be enough votes for the proposal in the Senate.

On Monday, Senate Finance Committee Chair Carl Kruger hand- delivered a letter to the governor's offices, demanding that Paterson immediately begin collecting the tax on cigarettes sold on Indian lands to non-Indian purchasers. Senator Kruger, a Brooklyn Democrat, says no budget cuts should be considered until that occurs.

"We should collect before we cut," said Kruger.

Governor Paterson, like several previous governors, has delayed collecting the tax. Senator Kruger estimates that the state could reap as much a $1.5 billion dollars a year from the tax, an amount that the governor's budget spokesman calls "preposterous".

Paterson calls the proposal a "naked political act", and says he's growing frustrated with what he's called "phony" proposals from the Senate, including a plan to refinance the tobacco bonds and other one- shot revenue raisers.

"I look up every day and there's another distraction," said Paterson. "I'm just hoping that people are taking note of how ridiculous some of these proposals are."

Even Senate Republicans, who have long advocated for collecting the tax, seemed skeptical that the move would immediately solve the state's budget problems. Senator John DeFrancisco, of Syracuse, called the idea "unrealistic". GOP Senator Stephen Saland, of the Hudson Valley, called the Senate Finance Chair's proposal, and his plan to march to the governor's office to deliver the letter, the media in tow, "illusory, undignified, and divorced from reality".

So far, the governor has called special session only through Tuesday, but he says that if there's no agreement by then, he and the legislature may be seeing a lot of one another in the coming weeks, hinting that he may keep lawmakers in session until they agree on how to fill the $3.2 billion dollar deficit.