GOVERNOR-ELECT Andrew Cuomo joked earlier this month that Gov. David A. Paterson has promised to accomplish the herculean feat of closing next year's $9-billion budget deficit before leaving office in five weeks.
Paterson appeared taken aback, laughing nervously with reporters at the news conference. Minutes later, Cuomo, speaking gravely, said he expected Paterson and lawmakers to reach agreement on eliminating this year's $315 million deficit.
Stanching that smaller amount of red ink is among the steps Paterson can take to help his successor, fiscal experts said. They also want Paterson to implement the layoff of 900 state employees, abolish rules that increase the cost of government building projects and give the Health Department authority to set Medicaid reimbursement rates in place of the legislature.
On the agenda
Paterson has put some of these on the agenda for Monday's special legislative session.
"All the bad news that can be delivered now will set up for the new governor," said Elizabeth Lynam of the nonpartisan Citizens Budget Commission, referring to the many challenges Cuomo will face early on. "There are things that [Paterson] can still do, and he should try to do them."
However, Lynam and others noted Paterson cannot act unilaterally in most cases. Closing the deficit, for example, requires approval from lawmakers, which is never guaranteed.
Even in the best of times, relations between Paterson, a former state senator, and the legislature have been strained. What is accomplished at Monday's special session will likely depend on the State Senate, where Democrats and Republicans are sparring over election recounts that will determine who controls the chamber.
What would be helpful
Kathryn Wylde of the business group Partnership for New York City, said, "it's unclear to me any business will be transacted" at the special session. "But it would be helpful if they began to identify where the spending cuts could come from next year, assuming they don't reach agreement on this year's deficit," she added.
In a budget totaling $136 billion, the experts said cutting $315 million shouldn't be difficult theoretically. But lawmakers are loath to reduce expenditures on popular programs such as health care and school aid.
Postponing until January a remedy to this year's deficit only insures it grows, said Wylde, "and makes the 2011-12 deficit even more untenable."
Paterson and Cuomo both agreed with that sentiment last week.
Lawmakers "can tune me out if they feel like it," Paterson said. "But they cannot tune out that deficit. It will be growing and waiting for them next year."
Cuomo added, "Next year is going to be tremendously difficult and to address this year's deficit this year, makes all the sense in the world."
Besides the budget, Cuomo has publicly asked Paterson to tackle only one other issue: Abolish the one-year notification requirement before a state facility can be closed.
Not everyone is calling for Paterson to be an activist.
Frank Mauro of the union-backed Fiscal Policy Institute, said the layoffs plan should be shelved because it will increase unemployment insurance and Medicaid expenses. He suggested tapping the state's reserve funds to cover the 2010-11 deficit.
"The outgoing administration should do as little harm to the economy as possible and let the decisions be made next year," Mauro said.
While publicly pledging to work with Cuomo, legislative leaders were circumspect about his call for immediate deficit reduction.
Senate Democratic chief John Sampson of Brooklyn lobbied for bipartisanship in the narrowly divided upper chamber. "New York is facing difficult economic times and we must not allow the complications of political uncertainty to stand in the way of progress," he said.
GOP: It's up to Democrats
Scott Reif, a spokesman for Minority Leader Dean Skelos (R-Rockville Centre), said the GOP was "prepared to . . . act on important issues, including balancing the budget by making real spending cuts and without raising taxes. However, since Democrats are in the majority in the State Senate until January, they control what happens or doesn't happen on the floor."
Sources within the Assembly's Democratic majority said Speaker Sheldon Silver of Manhattan was unwilling to endorse controversial cuts without first knowing they would pass the Senate. Asked about Paterson's agenda, Silver aide Sisa Moyo said, "we are reviewing it."