By Jeremy Walsh
The state’s projected deficit has swelled to $10 billion over two years, Gov. David Paterson said last week as he again pushed a proposal to cut that gap.
This year’s deficit has gone from $1.1 billion to $3.2 billion, while next year’s deficit grew by $2.2 billion to $6.8 billion since July’s estimate. Paterson has called a Nov. 10 special legislative session to stem the red ink.
“The fiscal challenge we must address is clear and undeniable,” Paterson said in a statement. “Revenues have continued to plummet below already conservative projections and immediate action is needed to restore the fiscal integrity of our state budget. Delaying the tough choices we must inevitably make will do nothing besides make those choices more difficult.”
As it stands, the state Budget Office believes there may not be enough money in the General Fund to cover operating expenses between mid-December and January 2010 and it may have to borrow from other state funds to maintain cash flow.
“The state of New York has and will continue to meet all of its obligations to bondholders. Other expenditures, however, may ultimately have to be delayed past their currently scheduled payment dates in order to prudently manage cash flow,” Budget Director Robert L. Megna said in a statement.
Paterson proposed a two-year, $5 billion deficit reduction plan Oct. 15 that included $3 billion in current year savings. It was unpopular among elected officials.
“This budget has simply not held together,” state Comptroller Joseph DiNapoli said Oct. 15. “The Legislature needs to work with the governor to get the state’s perilous finances back on track and protect the interests of taxpayers.
State financial planners have proposed $200 million in additional current-year reductions, including further agency spending controls, using in-house information technology staff and tapping surplus funds like excess Workers Compensation funds.
Reach reporter Jeremy Walsh by e-mail at jewalsh@cnglocal.com or by phone at 718-229-0300, Ext. 154.
