DiNapoli says state deficit nears $1 billion

ALBANY - New York State Comptroller Thomas DiNapoli yesterday projected that the state's current deficit is nearly $1 billion, three times larger than estimated by Gov. David A. Paterson.

The executive and legislative branches' fiscal chiefs in their first public budget meeting yesterday agreed that although there are signs of slow recovery in jobs and wages, the end of the recession is going to be followed by painful years of recovery under Gov.-elect Andrew Cuomo.

Forecasts include deficits of more than $40 billion over the next three years as income, sales and business taxes slowly rise to pre-recession levels. For New Yorkers, that could still result in reduced state services, layoffs of government and school employees, and higher taxes.

The comptroller's view of the current fiscal year is more bleak than that of lawmakers and Paterson, who soon will have to make the cuts in spending to address the deficit. "We're not convinced that revenue will increase at the rate that they believe it will increase at," said Thomas Nitido, a deputy comptroller.

Paterson budget director Robert Megna said he doesn't agree with the comptroller's estimate.

Paterson is expected to announce a special session for the Assembly and Senate in the coming weeks with an agenda to cut spending to address a $315 million deficit. That could include cutting school aid midyear, a rare and disruptive action that can trigger higher local property taxes.

The deficit-reduction session is expected to draw fire from special interests protecting that funding. Public worker unions already face Paterson's plan to layoff 898 state workers by Dec. 31.

In addition to the current $315 million deficit, Megna projects a $9 billion deficit for the 2011-12 fiscal year beginning April 1.