Paterson Sets Budget Deadline Of June 28

News

Paterson said to legislative leaders yesterday that he would not sign any budget with deficit financing in it, and that he is setting a deadline of June 28th for the budget. Now, budget deadlines have come and gone in the past, but yesterday Paterson said he would put his budget plan into an emergency spending bill (a bill proposed by the Governor to the legislature, that they have to more or less approve up or town), giving the legislators the choice of adopting his budget or a government shutdown.

Lawmakers and Lt. Gov. Richard Ravitch have urged the governor to a consider a range of borrowing plans. Mr. Ravitch, whom Mr. Paterson appointed last year, has sought to link a bond sale to tighter fiscal controls, but legislators have balked.

The state has been running without a budget since the beginning of the fiscal year on April 1. The Paterson administration has pressured lawmakers to approve chunks of an estimated $130 billion spending plan. But lawmakers have adopted only a fraction of the cuts and taxes that Mr. Paterson has proposed.

But the governor will have none of it: “I will not sign a budget that has any deficit financing in it.” Why?

The rejection of borrowing to close the gap is needed to show the public that “we are not pushing any problems of today off into the future,” Mr. Paterson said.

Mr. Paterson, who isn’t seeking election in November, said the state will continue to face budget pressure after his term is completed at year-end. Federal stimulus money runs out this year and in 2012 the three-year increase in the top tax rate for individuals earning more than $200,000 will expire, he said.

Assuming this year’s deficit is bridged as Mr. Paterson proposed, the budget gap for the year beginning April 1, 2011, would be $5.39 billion, according to state projections. That gap would be larger if this year’s deficit was closed by additional one-time actions not sought by Mr. Paterson, such as bond sales.

Attorney General Andrew Cuomo, a Democrat like Paterson and front-runner in November’s gubernatorial election, also opposes selling bonds to close the deficit.