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EDITORIAL: Paterson's opening budget play

Gov. David A. Paterson's austere budget is the right response to our dismal state and national economy. After the near-implosion of Wall Street, New York is struggling with a $7.4-billion deficit; $1.5 billion of that is lost revenue from the financial sector alone. Now state leaders have to get the message and display some spending discipline, too.

Paterson proposes to increase spending by just 0.9 percent, which is very low considering the state's rising obligations for pensions and debt. But his previous budget started out just as stingily: He recommended a half-percent spending increase. Instead, by the time it was passed in April, the budget had rocketed to $131.8 billion, a 9 percent increase, on the fuel of the largest tax increase in state history ($8 billion), plus federal stimulus money ($5.5 billion).

This out-of-control spending can't be allowed to happen again. A flat budget - essentially what Paterson has proposed - should also be the legislature's goal. If lawmakers want to add to one column, they have to subtract in another.

While some of last year's budget-busting can be laid at the feet of lawmakers, Paterson has only himself to blame for others. Some of his numbers this year are pipe dreams, unless he's figured out a way to move past political opposition. A tax on sugary sodas? We heard that one last year, only to have the governor pull it off the table himself following a public outcry. For the second year in a row, the governor is counting on $93 million from wine sales in grocery stores. A good idea - that failed last year.

On the other hand, Paterson has shown a welcome consistency on shrinking the state workforce. The governor expects to shed 625 jobs next year through facility closures and agency mergers. Still, that's just 0.3 percent at a time when the state could be using this crisis to trim down to a more sustainable size.

The governor's plan includes several ideas that are clear winners: eliminating nearly 100 mandates that make it more expensive to operate local governments, taxing the middlemen who sell cigarettes to Indian nations, consolidating agencies, and giving SUNY and CUNY more financial flexibility.

Cuts of up to 5 percent for local governments and schools will be painful. But in times like these, everyone has to give. All but a few schools have reserves from the supersize increases of the past few years. It's a shame that a property tax cap - another abandoned Paterson goal - isn't in place to prevent the pain from being passed along to homeowners.

Other Paterson proposals will require scrutiny over the coming days, in particular, drastic cuts to Roosevelt schools, fees for early childhood intervention, and reductions for hospitals and the MTA.

Politics will play a bigger role than ever in this year's budget - and that's saying something. This is Paterson's chance to persuade voters to elect him in November. With the slim majority in the State Senate, Democrats and Republicans will be working every angle to control that house.

Scaling back spending increases is the right message at the right time. This governor must employ all of his political savvy if he's to get his way. hN