Paterson: Cash woes may continue despite deficit fix

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ALBANY - New York could face more red ink in March even if state leaders manage to close the current $3.2-billion budget deficit, Gov. David A. Paterson warned Saturday.

After speaking privately with Comptroller Thomas DiNapoli and experts on the 1970s financial crisis, Paterson announced there might not be enough cash to pay bills of $13 billion to $14 billion due at the end of the fiscal year on March 31. "We are in dire circumstances. . . . I need them to make [spending] cuts," he said, referring to lawmakers.

Paterson singled out state senators for criticism, saying they were "irresponsible" in opposing midyear cuts to education and Medicaid.

He said a lawmaker from Long Island had bragged about being a "hero" if the lawmaker didn't cut school aid. But Paterson said the lawmaker would receive no kudos if the state's credit rating was downgraded and money had to be diverted from schools to higher interest payments.

Paterson didn't identify the lawmaker and his spokeswoman declined to comment. But sources familiar with the conservation said Sen. Craig Johnson (D-Port Washington) made the "hero" remark.

Johnson aide Rich Azzopardi said the senator didn't recall speaking about school aid with Paterson "but thinks anybody who does not stand with children, parents and taxpayers during this process could be considered a villain."

Spokesmen for Long Island's seven Republican senators and Brian X. Foley (D-Blue Point) said none of them had such a talk with Paterson.

Paterson and Johnson are expected to attend a scholarship event at Great Neck Synagogue Sunday morning.

Five weeks ago, Paterson unveiled a plan to close this year's deficit and reduce next year's shortfall of $6.8 billion by sending $686 million less to schools and $471 million less to health programs. The Senate's GOP minority denounced the proposal and put forward alternatives, which were embraced by the Democratic majority.

Without spending cuts that would shrink next year's deficit, New York faces a potential downgrade of its credit rating and a cash shortage of $1.4 billion next month, according to DiNapoli. Lawmakers will return to the Capitol Monday for the third week of special session.

Paterson blasted the Senate Saturday for "fiddling while Rome is burning. . . . They have let their own personal political futures be favored over the value of serving the people." Democrats hold a two-seat edge over Republicans in the upper chamber and all 62 senators face re-election next year.

Sen. Dean Skelos (R-Rockville Centre), the minority leader, repeated his call for Paterson's deficit-reduction plan to be put into a bill so that it can be voted on. "Taxpayers are tired of the governor's podium-pounding act and are looking for him to provide some leadership."

Senate Democrats, though some bristled at Paterson's attack, held their fire. "We're working with all sides," said Democratic spokesman Austin Shafran. "We're optimistic that we can reach a deal next week."

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