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LIers brace for Paterson's proposed deep budget cuts

LI bus (Dec. 17, 2009)

LI bus (Dec. 17, 2009) Photo Credit: Newsday File / Kathy Kmonicek

ALBANY - If last year's spending plan from Gov. David A. Paterson was called a "doomsday budget," this year's will be known as the "Armageddon budget" for its deep cuts to virtually every part of state government.

Across Long Island, schools, hospitals, colleges and other institutions are bracing for the worst, knowing Paterson must close a $7.5-billion deficit. He is expected Tuesday to call for large reductions in school aid and Medicaid reimbursement.

Historically, less education aid has led school districts to make up the difference by cutting programs and increasing local property taxes.

Sources said Monday that Paterson would likely propose less revenue sharing for towns, cities and villages, and less direct support for SUNY and CUNY. He will outline plans to merge state agencies and require state workers to pay more for their benefits, but not call for layoffs, they said.

Paterson isn't expected to propose dozens of new taxes and fees, a hallmark of the 2009-10 budget.

Fiscal experts said New York's financial straits require actual cuts, not simply slowing the rate of spending growth.

"You are certainly going to see a school aid cut - the only question is whether it's big or enormous," said E.J. McMahon of the conservative Empire Center for New York State Policy.

Here's how five sectors important to Long Island may fare:

 

SCHOOLS

When it comes to state school aid, the governor proposes, but the Legislature disposes.

For that reason, any scary talk out of Albany about prospective cuts at this time of year needs be kept in perspective.

Last winter, for example, Paterson called for a record $880 million in aid subtractions, including $157 million on Long Island. By spring, lawmakers actually managed to boost assistance a little, with the help of more than $1 billion in federal stimulus dollars.

All the same, next year looks like a tight one for school spending. Educators expect Paterson to propose even bigger aid reductions for next year than he initially did for this year. Moreover, about two-thirds of New York's federal stimulus money for schools has been spent.

"Everybody has a very high level of concern regarding what the state-aid picture is going to be," said Wendell Chu, superintendent of East Islip schools and president of the Suffolk County School Superintendents Association.

Skeptics contend, on the other hand, that most schools have enough cash reserves to weather cuts with only minor reductions in teachers and student services. "They're going to cry 'Wolf!'" said Fred Gorman of Nesconset, a regional taxpayer activist.

 

HEALTH CARE

Long Island hospital officials are girding for nothing less than painful cuts from this year's state budget.

"Based on a good deal of experience, I'm expecting the worst," said Kevin Dahill, chief executive of the Nassau-Suffolk Hospital Council.

Dahill predicted more taxes and cuts in Medicaid reimbursements, which he hoped would not be so great as to imperil the ability of hospitals to serve an ever-growing number of people who are on Medicaid.

Arthur Gianelli, chief executive of the NuHealth System, which includes Nassau University Medical Center, said, "We hope that the governor will recognize that safety net facilities such as ours are most necessary when the economy struggles."

Robert Shapiro, senior financial officer at North Shore-LIJ Health System, was equally gloomy. But he said the health system, regardless, would look for ways to save and make money. "We have to look at how we spend money and make sure we collect all revenues. And we have to grow volume," he said. "If you don't get it on price, you have to get it on volume."

 

TRANSPORTATION

Still reeling from painful cuts in state aid last year, those in the business of roads and transit hope Paterson's budget will have some good news.

To address a large budget shortfall that was worsened by $143 million cut by the state, the Metropolitan Transportation Authority in December approved a budget that includes several unpopular gap-filling measures. Chief among them is a plan to eliminate free and discounted MetroCards for New York City public school students.

Transit advocates hope Paterson's budget will include additional state funding to keep the program alive.

Some money also could be set aside to get some important road projects off the ground, said Mark Herbst, president of the Long Island Contractors Association. Paterson has so far rejected a $25 billion proposed capital plan to fund road and bridge projects through 2014. But, Herbst said, the governor may include in his budget some money to fund the first couple years of the five-year plan.

That could mean that important roads projects on Long Island, including on Route 347 and Route 110, could move forward in 2010. And contractors could get back to work.

 

ENVIRONMENT

Advocates expect conservation spending to take a hit this year, with cuts to the state's Environmental Protection Fund and to the environmental and parks agencies. That could mean less money for environmental restoration, closures at some state parks and fewer people to enforce pollution, garbage and shellfish regulations.

The protection fund gives grants for local environmental and agricultural projects, open space conservation and coastal improvements. On Long Island, it has helped create a waterfront park in Port Washington, boosted recycling programs in Oyster Bay and preserved open space across Suffolk County.

"Tens of millions of dollars have been spent in our communities," said Lisa Ott of the North Shore Land Alliance. "These are really essential things."

Over the past two years, Paterson and state lawmakers have taken $185 million from the fund for general budget relief, according to a report by the Albany nonprofit Environmental Advocates.

"We're going to have to look to the legislature to restore cuts that the governor will make with the meat-axe," said David Gahl, Environmental Advocates' policy director.

LOCAL GOVERNMENTS

During budget season, New York's local governments live in perpetual fear of unfunded mandates - Albany requiring them to perform a function without passing through funds to pay for it.

And with Paterson's budget due Tuesday, concerns are heightened by a recession that has rocked the state's finances. "Because counties administer federal programs, the fear is that we would have to take more responsibility," said Mark LaVigne, spokesman for the New York State Association of Counties.

For instance, in 2008, then-Gov. Eliot Spitzer proposed increasing counties' share of mandated social services programs from 50 percent to 52 percent.

Suffolk County Executive Steve Levy said he hopes Paterson avoids such measures. "We would be most concerned if there were any state cuts to the county in areas where the state mandates that the county pick up the tab for the lost revenue," said Levy.

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