EDITORIAL: Paterson can still make a difference

David A. Paterson is, in his words, still quacking and still swimming. New York's lame-duck governor got a new lease on the future this week when he was cleared of accusations that he interfered in an aide's domestic violence case.

Paterson still faces questions about Yankees tickets and his handling of an Aqueduct racetrack casino contract. But much of his legal trouble appears to be behind him. His energies have been freed for the next five months to build his legacy.

Even as a lame duck, Paterson should try to leave the state in the best position possible. First, he must continue to push the legislature to agree on a state budget. Otherwise, cash accounts will run out next month, further squeezing local governments. Some have been waiting since December for overdue state funds.

To save sorely needed money, the governor should limit public pensions by vetoing an extension of the 8.25 percent taxpayer-guaranteed return for the teachers' retirement fund. He should enforce a more aggressive hiring freeze, draft a plan for state worker layoffs and order managers to halt overtime assignments for people about to retire - a ploy used to inflate pensions.

Paterson should also stop doling out jobs to his friends. He installed five cronies to the state Parole Board last month, to six-figure jobs that he had said the state could do without.

He should forge an agreement on ethics reform, which he once called a top priority. In ethically challenged Albany, that would be the ultimate feather in his cap. hN