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Furloughs, layoffs may be state's next steps

ALBANY - Gov. David A. Paterson and some lawmakers are raising the specter of furloughs - and even layoffs - of state workers to help close the growing budget deficit, as other big states have done.

"We've not had to furlough or lay off any workers, but the means of balancing budgets are becoming less and less available, and everything is on the table," Paterson said recently. "We are going to have to make sure New York can still meet its obligations, that we don't delay payments which would injure our financial status."

New York has been the exception among large states in not slashing its 200,000-person payroll. Four states and the District of Columbia have fired workers to close budget gaps. New Jersey, Connecticut and seven others issued furloughs. Fourteen states, including California, did both.

Paterson has acted modestly so far, in part because of the clout of state employee unions. This year's record $131.8-billion budget, already $3 billion in the red, was balanced initially by a workforce reduction producing savings of $260.3 million over two years. That goal was met by cutting 3,722 jobs, largely through attrition and abolishing funded vacancies. Barely 1,000 people took buyouts of $20,000 despite intense lobbying.

A call for more buyouts

Now, Budget Director Robert Megna is calling for another push to secure buyouts and reduce hours. A hiring freeze remains in effect but doesn't cover the legislature, courts, SUNY and other entities not under Paterson's control. Experts said the steps aren't likely to reduce the deficit significantly. Tax collections missed projections again last month.

"You cannot close this year's deficit, let alone those projected for the next three years, without significantly hitting the workforce," said E.J. McMahon of the conservative Empire Center for New York State Policy. The 2010-11 gap is projected to be $4.6 billion, followed by $13.3 billion in 2011-12.

"New York is like a vehicle running downhill toward the edge of a chasm," he said. "We should be doing what the other states are doing."

James Parrott of the liberal Fiscal Policy Institute disagreed, saying layoffs, and even furloughs, of state workers will slow the economic recovery. The state is the biggest employer in many places so the impact of job actions would be felt on Long Island and elsewhere, not exclusively in Albany.

Promises to unions

Paterson's hands are tied somewhat in terms of paring the payroll. In June, he agreed to a two-year ban on layoffs for members of the biggest unions, the Civil Service Employees Association and Public Employees Federation, in return for them not opposing lesser retirement benefits for new hires and supporting the buyouts.

"The governor has given us a commitment and we do hold him to it," said CSEA spokesman Stephen Madarasz.

PEF wants the buyouts to be more widely available, saying several hundred of its members were turned down because their jobs were deemed essential.

Ten other unions didn't sign the pact with Paterson, so their members weren't eligible for buyouts. But he is willing to give them a similar deal. "At least right now, they have a choice," he told Newsday.

Paterson also faces lawmakers who are loath to cut major spending areas. "If the legislature will not look at education and health care, cutting the payroll is the only way the governor can reduce spending," said Robert B. Ward of SUNY's Nelson A. Rockefeller Institute of Government in Albany.

Legislative leaders are divided over furloughs and layoffs.

State Senate chief Malcolm Smith (D-St. Albans) believes "we have to take into consideration all possible options with the exception of tax increases," said aide Austin Shafran.

But Sen. Dean Skelos of Rockville Centre, the GOP leader, balked at furloughs and layoffs, saying "that's not necessary because there's enough stimulus money."

Budget officials countered that all the federal dollars have been allocated. And Paterson warned that lawmakers couldn't delay much longer in addressing the growing deficit: "I would suggest that shortly everybody get their act together . . . or we will pay the penalties those other states have paid."

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