Paterson Will Face Plot To Boost Outlays
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While lauding New York’s governor-designate, David Paterson, for his conciliatory style of leadership, state lawmakers are quietly drawing up plans for a surge in spending that will force Mr. Paterson to choose between avoiding his first fight with the Legislature or risking a late budget.
With two weeks to go before a budget deadline of April 1, the Assembly and the Senate have passed piles of one-house resolutions and appropriations bills that provide only a hazy picture of their budget plans. Neither chamber has released any supporting financial documents with total spending figures.
Legislative sources say, however, that both chambers are aiming to expand spending on health care, public education, and a property tax relief program, adding as much as $2 billion to Governor Spitzer’s executive budget.
Mr. Spitzer originally proposed raising state spending by 6% — or twice the rate of inflation — over the previous year. The budget advanced by lawmakers may take that figure to 7% or 8%, sources say.
“The chances are the governor’s budget is the floor, which translates into current and future tax increases,” the president and CEO of the Partnership for New York City, Kathryn Wylde, said.
During budget negotiations, lawmakers typically add spending to a governor’s original plan. With legislative elections around the corner, the pressure on lawmakers to restore executive cuts is even higher, which could be a potential source of conflict for the new Paterson administration.
A top aide to Mr. Paterson said the incoming governor is concerned that troubles in the real estate and financial sector will depress revenues further and said Mr. Paterson, who is being sworn into office today, would try to hold spending to the level proposed by Mr. Spitzer.
“It would seem that the only appropriate response to an economic situation that is evolving would be greater fiscal prudence. It’s not rocket science. If the economy is going south, you can’t spend more money,” a source close to Mr. Paterson said.
A fuller picture of the Assembly plan has emerged in the last week. Democrats, who passed appropriations bills last week, want to restore hundreds of millions of dollars in public school operating aid — a good portion of it for New York City school — that Mr. Spitzer last year promised would be in his 2008–09 budget but ended up slashing.
They also are looking to eliminate many of the Medicaid cost-saving measures proposed by Mr. Spitzer and pump more money into a property tax relief program that gives rebates to middle-class homeowners outside the city.
The Assembly is financing the plan with a tax increase targeted at New York’s wealthiest residents that would generate an estimated $1.5 billion a year in revenue.
Senate Republicans appear to pushing for many of the same increases but say they will not support the Assembly’s tax proposal, which would raise the personal income tax rate of those earning more than $1 million a year to 7.7% from 6.85%.
It is unclear how the Senate intends to pay for those increases without tapping into revenue from a tax hike. Budget resolutions approved by Republicans last week call for vaguely worded cuts to agencies and public authorities.
“You can’t tell where the money comes from,” a Democratic state senator of Manhattan, Eric Schneiderman, said. “It’s virtually impossible to figure out what the total expenditures are. As far as budget documents go, this is garbage. It’s the ‘Ishtar’ of budget documents.”
The Assembly is expected to release a financial spending plan this week that would clarify exactly what its members voted on last week.
“Why did they vote on something and not give the public or their members any sort of summary or documentation to describe what they’re voting on?” a fiscal analyst at the Manhattan Institute, E.J. McMahon, said. “The real explanation may be that they appear to have added a lot of new spending to the executive budget, and they are reluctant to own up to it any sooner than they have to.”

