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Is this year's state budget crisis more of the same?

Stony Brook University students protest proposed education budget

Stony Brook University students protest proposed education budget cuts. The demonstration Wednesday was timed for a visit from SUNY Chancellor Nancy Zimpher who was attending a conference on how the state can attract more research and research money. (March 3, 2010) Photo Credit: Kevin P. Coughlin

ALBANY - Teachers fired. Hospitals shuttered. Parks closed. Services for the poor and elderly decimated.

For 40 years, interest groups have raised such dire prospects when governors proposed spending cuts to close big budget deficits. And usually it worked, as lawmakers fearful of offending voters rejected or reduced any cuts, often by rolling the costs into the future.

Will this year be any different?

Even though the state is facing a $9-billion deficit in Gov. David A. Paterson's proposed 2010-11 budget, many experienced Albany observers believe the State Legislature will do what it has always done: use gimmicks such as one-time revenue and borrowing to avoid the most serious cuts. That's particularly true because this is an important election year, which will determine who controls the State Senate and redraws legislative district boundaries for the next decade.

But other lawmakers and fiscal experts argue that this year has to be different. The state no longer can rely on the saviors that have bailed it out in the past - a booming Wall Street and federal aid - and so there are very few options other than deep spending cuts for schools, hospitals, parks and others.

Even though he wants lawmakers to make significant spending cuts, E.J. McMahon, director of the conservative Empire Center for New York State Policy, said that he doesn't expect it to happen and that Paterson, mired in ethics scandals, lacks the authority to compel lawmakers to do so.

"The special interests are crying wolf again. . . . I don't think the budget that the Legislature and governor finally agree on will be radically different from previous ones," McMahon said.

But some lawmakers in both parties counter that there are few other options left. "The cupboard is bare," said veteran Assemb. Harvey Weisenberg (D-Long Beach).

"It's the worst situation that the state's been in - worse than the [fiscal crisis] of the 1970s," said Sen. Kemp Hannon (R-Garden City), whose Albany career dates to his Assembly election in 1976.

Last year, Paterson and lawmakers closed the largest deficit in modern state history - $17.9 billion, or nearly 14 percent of the adopted budget - relying on a three-year income tax surcharge on the wealthy and savings due to ending STAR property-tax rebate checks. Federal stimulus money made cuts in school aid and Medicaid reimbursement to hospitals unnecessary.

This year, voters are sending mixed signals about what they expect from Albany, said pollster Steven Greenberg of the Siena Research Institute. A Siena poll last month found nearly three in five voters oppose cuts to school aid and Medicaid - even if it means tax hikes. In the same poll, voters called lowering state taxes a top priority.

"In the absence of clear direction from the electorate, I think legislators will do what they've always done," said Greenberg. "They will find a way to piecemeal together a budget that creates as little pain and disruption as possible, pass it, and go home and start campaigning."

Lawmakers' response to the fiscal crisis is tempered by the 2010 elections. "The Republicans will not provide votes on this budget," said Greenberg. "Looking at November, they want to have the ability to say, 'Democrats voted for a budget that cut education or cut health care or raised your taxes. It wasn't the Republicans that did that to you, it was the Democrats.' "

He said Democrats are at pains to remind voters of the deficit's magnitude and "as much as they don't want to cut services or raise taxes and fees, they are trying to be fiscally responsible."

A growing number of experts and lawmakers say there may be no way around big cuts this year.

While aid from Washington or a burgeoning Wall Street saved the day in the past, some doubt history will repeat itself. And most federal stimulus money is running out in December.

Senate Minority Leader Dean Skelos (R-Rockville Centre), a 25-year veteran, said the budget is veering toward a cliff because of overspending. "If it's not the worst, it's one of the worst," Skelos said of the state's fiscal dilemma.

Weisenberg said he believes the crisis is "absolutely real," that there will be deep cuts and that interest groups are not simply crying wolf this time. "I can't sleep at night," he said. "That's how bad it is."

With Bart Jones

and Thomas Maier

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