Nov 13, 2008 6:23 am US/Eastern
Gov. Paterson Announces Massive Cuts Across Board
Says The Plan Is To Raise Costs Of State Public Colleges
Paints Dire Picture Of State's Economy And Its Projected Course
NEW YORK (CBS) ―
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Gov. Paterson delivered dire news about New York State's economic situation on Nov. 12.
Zack Seckler/Getty Images
New York Gov. David Paterson's announced Wednesday his plan to slash $2 billion from the state budget.
He also issued a warning: More severe cuts will be unveiled next month
Needless to say, the Wall Street meltdown has taken its first bite out of the state budget.
"The well has run dry," Paterson said.
The governor sought to reduce state spending by $2 billion. Some proposals raise money, but most require cuts. Health care and education suffer the most.
"All areas of government are going to have to suffer some of these cuts," Paterson said. "They will be painful."
Cuts to schools amount to $585 million in this school year. Cuts to hospitals, nursing homes and other health programs equal $572 million.
Even with the reductions, schools, nursing homes and hospitals will still get more money than last year.
"He's not cutting school aid, he's reducing the increase in school aid from 9 percent to 5 percent," said E.J. McMahon of the Manhattan Institute. "He's not cutting Medicaid; he's reducing the increase in Medicaid from 25 to 1 percent.
The governor wants to raise money by expanding the current 5-cent deposit on beer and soda to include bottled water and other non carbonated beverages. And tuition at the state and city universities will go up $600.
So far no layoffs are planned for the state's 230,000 employees, but the governor wants them to:
* Defer five days pay this year.
* Agree to forgo a 3 percent pay hike next year.
* Have retirees pay more of their health care costs.
"He's really touching one of the third rails of governance and politics in New York," McMahon said. "You're not supposed to do that. Having done that, he really didn't ask that much of them."
The governor was asked if he and his commissioners should also take a pay cut in these tough economic times. He hemmed and hawed and then he said, "Well, I guess we could talk about that."
However, all the governor's proposals may be in trouble.
Senate Republicans don't want to approve them unless they see a long-term budget plan that includes a proposal for next year.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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