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Paterson: Stimulus funds would be put to work quickly

BY JAMES T. MADORE | james.madore@newsday.com

10:27 PM EST, December 2, 2008

ALBANY - New York would start a host of building projects "within a month" of receiving federal stimulus money, Gov. David A. Paterson said yesterday.

State officials have identified 40 "shovel-ready" transportation and 58 wastewater treatment projects that have been stalled because of the two-year, $15-billion budget deficit. But with money from Washington, as part of a second stimulus package, work could begin almost immediately, he said.

"What we would need is some federal assistance because our budget is so much in deficit we may not be able to afford it right now," Paterson told reporters in Philadelphia. "An economic stimulus should be translated into action in New York within a month."

Paterson's comments came after he and more than 40 other state chief executives met privately with President-elect Barack Obama in historic Independence Hall. Paterson described the session as "unscripted" and "refreshing."

He said Republican Govs. Rick Perry of Texas, Mark Sanford of South Carolina and Sarah Palin of Alaska, the running mate of GOP presidential nominee John McCain, led a spirited debate about the pitfalls of adding to the $10.7-trillion federal debt. They warned that the U.S. economy could collapse.

"That's a very salient point that we have to consider," Paterson said. "But for the short term, a stimulus package that puts people to work, brings money into the economy . . . is probably the best approach."

Picking up on a comment by Obama, Paterson said the nation was suffering from deflation, where the economy sputters because consumers hold back on spending. Such a circumstance exacerbated the Great Depression and was cured by an infusion of federal dollars by then-President Franklin D. Roosevelt.

"The issues of collapse of state economies are imminent unless there is federal action," Paterson said, noting 41 states have budget deficits. "The states are as important as a lot of the corporations and banks that we are bailing out because the states have people who live in them."