New York Local News

ALBANY (CBS) ― Tomorrow, Gov. David Paterson unveils his proposed budget that includes a $4 billion package of fees and taxes on everything from luxury items to healthcare, and drastic cuts almost across the board.

By doing so, the governor is hoping to close a $15 billion budget deficit. Still, the proposed budget cuts spare the neediest.

Paterson's budget can best be described as pain and suffering – pain for almost everyone except those who are suffering the most.

For them, he is proposing a 30 percent increase in welfare grants for the first time in 18 years, as well increased funding of food pantries, lead poisoning prevention, cancer screenings, and indigent hospital care.

Those increases comprise a fraction of the state's $15 billion budget deficit, and to redress that, Paterson wants to slash education, health care, economic develop programs, and raise new taxes.

Folks on the streets of New York seem to understand the predicament.

"They have to do something to fill the budget gap," says Paul Hogue of Sunnyside.

Adds Upper West Side resident Steve Erickson: "It's tough times. I think we have to do what it takes to keep the city floating."

If the Governor's budget is approved, SUNY and CUNY will be ordered to raise tuitions. The sales tax exemption on clothing under $115 will be eliminated, as will the Empire Zone program, which gives tax incentives for business development. Fees on everything from license plates to state parks will be raised. Hospitals, doctors, nursing homes and insurers will see taxes raised and funding cut. Cigarettes sold at Indian-owned stores will now be taxed. Even sugary drinks will be taxed. And some juvenile detention centers will be closed.

But Paterson does not want to raise income or business taxes, which has raised some eyebrows.

Government watchdog Carol Kellermann says his reasoning is sound.

"This is a time when we want people to be investing and spending their money to stimulate the economy," she says. "It's not the time to put another tax increase on them."

Paterson is suggesting a two-week tax holiday for goods under $500 as a shopping incentive. The budget is subject to approval by the Legislature, and since it offers equal opportunity pain, expect passionate debate from interest groups and lawmakers.

Increasing the welfare grant will cost the state $109 million when fully implemented in 2012-13. It will force counties to pay an additional $76 million by then. The New York State Association of Counties has warned any mandates on counties will likely force increases in property taxes, already among the highest in the nation.

There was no immediate comment Sunday from NYSAC.

When fully implemented, the average family of three on public assistance would be eligible to receive a basic monthly allowance of up to $387, up from the current allowance of $291.

A typical upstate family receiving welfare would see its grant increase to $685 a month in 2012, up from $589 now; a typical New York City family would see the grant go to $787 in 2012, from $691 today.

About 501,000 children and adults receive welfare in New York -- more than half of them children.

Paterson will also propose:

--Making it easier for the poor and working poor to get government health coverage by eliminating some anti-fraud measures, including face-to-face interviews, finger printing, and an asset test.

--Allowing 19- and 20-year-olds who do not live with their parents to be eligible to enroll in Family Health Plus, the state health care plan, under the same rules as if they did live with parents.

--Income-eligible public workers will also be able to enroll in the state's Family Health Plus coverage.

--Paterson will seek a federal waiver to allow adults at 200 percent of the federal poverty level -- about $20,800 a year -- to be eligible for Family Health Plus.

--Take $282 million in funding for graduate medical education and redirect to the state's pool to cover the care of indigents at teaching hospitals and to

--Increase funds for indigent care in clinics.

--Hire two workers to help alert returning veterans and their families of government services and to create a mobile outreach service that will travel the state to meet with veterans.

--Increase funding to food banks, pantries, soup kitchens and shelters.

--Increase funding in programs to prevent lead poisoning in children, mostly in poor city neighborhoods.

--Create a $1 million obesity prevention program.

The obesity tax on non-diet sodas reported by the Times Union would raise $404 million, according to the newspaper report. Additional costs for most New Yorkers would include require new license plates -- to trigger new fees -- and to act on a law passed by the Legislature that would require the collection of sales taxes on cigarettes sold by Indian tribes, according to the report.

Mark Dunelea of the Hunger Action Network applauded Paterson for the proposals, but said his welfare increase doesn't account for 18 years of no increases and won't end a class-action suit filed last by advocates for the poor.

Dan Weiller, spokesman for Assembly Speaker Sheldon Silver wouldn't comment on the proposals. There was no immediate response from the Senate's Republican and Democratic leaders, or from the Healthcare Association of New York, a lobbyist in the industry.

The association released a statement Sunday that said 80 percent of its hospital members are considering drastic cutbacks because of state cuts previously announced. 

 

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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