Paterson gives lawmakers June 28 budget deadline, or else

ALBANY - Gov. David A. Paterson Wednesday gave lawmakers a deadline of June 28 to adopt a state budget or be forced to choose between accepting his deep spending cuts and shutting down government.

"This process has got to end," he said, referring to the budget being 78 days late as of today. "If this budget is not agreed upon by June 28 I will put the rest of the . . . [cuts] and the budget plan in the emergency appropriation" required to keep state offices open.

In a 20-minute public meeting with the four legislative leaders, Paterson also vowed to reject a budget deal that borrows money. He said this year's $9.2-billion deficit must be closed by spending reductions.

Paterson's declaration appears to scuttle a plan by Lt. Gov. Richard Ravitch to eliminate a $60-billion deficit over the next five years with $6 billion in borrowing, mandatory balanced budgets and less spending. The Assembly, but not the State Senate, has embraced Ravitch's scheme.

Paterson on Wednesday specifically ruled out a proposal from the Senate's Democratic majority to raise $700 million by refinancing bonds taken out against a 1998 tobacco settlement. Proceeds would help close the deficit and pay for property tax relief.

"I will not sign a budget that has any deficit financing in it," he said. "The people of New York deserve [that] we are not pushing any problem of today off into the future."

The legislative chiefs weren't fazed by Paterson's budget deadline, which he sprang on them at the meeting.

Assembly Speaker Sheldon Silver (D-Manhattan) and Senate Democratic leader John Sampson of Brooklyn both said they thought a budget pact could be reached soon.

"The momentum is there to complete the work . . . within the next five or six days," Silver said.

Sampson added, "Why not today? Why not tomorrow? . . . The end is very near."

Asked later about Paterson's dismissal of refinancing the tobacco bonds, Sampson pledged to win over the governor. But Silver said he "would prefer not to do tobacco bonds." He rejected increases in the personal income tax and other broad-based levies.

Lawmakers are expected to vote tomorrow on budget bills for spending on economic development, transportation and public safety. Together, they include $100 million in cuts but no tax hikes.

Paterson aide Morgan Hook said the administration was still considering what to put in Monday's emergency spending bills. For the past two weeks, Paterson has used the measures to win passage of components of the unfinished, $136-billion budget.

Still, Capitol observers doubted the bills would include taxes and fees because of opposition from the Senate's GOP minority. Its votes were needed earlier this week to avert a government shutdown.

Senate Minority Leader Dean Skelos (R-Rockville Centre) said he was pleased Paterson had rejected borrowing, but predicted "tax increases are on the way because they haven't balanced the budget."