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Assembly restores $600M of Paterson's school aid cuts

ALBANY - As the Assembly passed a rival fiscal plan, Gov. David A. Paterson yesterday warned of "austerity spending" because he and lawmakers will miss the April 1 deadline for adopting a new budget.

Democrats last night adopted a 2010-11 budget plan that restores $600 million of Paterson's more than $1-billion reduction in school aid. The State Senate's Democratic majority backed the full aid cut on Monday.

This difference and others between the houses - as well as with Paterson - led the governor Wednesday to declare "we actually are farther away" from agreement by April 1. So, he sent lawmakers a spending resolution to keep state government running in early April while budget talks continue.

Unlike past years, however, Paterson's $4.6-billion biweekly resolution only authorizes necessary spending for Medicaid, employee salaries, school aid and other required expenditures.

"We will have to go to a very bare bones, almost austerity, appropriations plan," he said, adding residents were "in for some very, very tough sledding."

Such an austerity plan is likely to meet resistance in the legislature. Biweekly spending resolutions are commonplace in New York because only two of the last 25 budgets were adopted on time.

Still, with just two days before lawmakers break for Passover and Easter, Assembly Speaker Sheldon Silver insisted Wednesday "an on-time budget is possible."

In approving its budget plan, the Assembly paved the way for rank-and-file lawmakers to resolve differences in conference committees.

The Assembly plan differs from that of the Senate and governor, though all seek to spend around $136 billion. For example, the Assembly uses $2 billion in borrowing - first suggested by Lt. Gov. Richard Ravitch - to help close a $9.2-billion deficit.

Among other things, the borrowing keeps open state parks slated for closure and restores $826 million of the $1 billion in proposed cuts to hospitals.

Like the Senate, the Assembly rejected Paterson's call for a new tax on sugary beverages and wine sales in grocery stores. However, the Assembly backed a $1 hike in the cigarette tax.

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