ALBANY – The new state budget will create a whopping 50 percent increase in the projected deficit for next year, Gov. Spitzer’s budget director revealed yesterday.
Paul Francis said the dramatic new spending agreed to by Spitzer and legislative leaders would add about $1 billion to the already $2.3 billion projected budget gap for 2008-09 and even more to the $4.5 billion and $6.3 billion deficits projected two and three years from now.
“Our feeling is those out-year gaps are manageable,” Francis insisted.
“They are consistent with the out-year gaps in the last several enacted budgets.
“We’ll address those out-year gaps and reduce them when we get to” next year’s budget, he added.
But budget watchdogs warn that the large looming deficits leave the state vulnerable should the economy turn.
“We remain one cyclical downturn away from huge problems,” said E.J. McMahon, director of the Manhattan Institute’s Empire Center for Public Policy.
McMahon noted that the budget gap Spitzer inherited this year from Gov. George Pataki was $1.6 billion, meaning Spitzer actually more than doubled it in his first year.
Diana Fortuna, president of the nonpartisan Citizens Budget Commission, said that with Spitzer promising billions of dollars more next year for education and property-tax relief, he would have to look elsewhere within the budget for major cuts.
A defensive Spitzer held an hourlong press conference to respond to widespread criticism of the spending plan, which, he argues, curtails Medicaid spending, significantly boosts education aid, and provides for tax rebates that mainly will benefit the middle class.
“This is a good budget,” Spitzer said. “It is one that will serve the public well.”
Spitzer said he was getting a far greater share of his proposed Medicaid cuts enacted than Pataki did in his first year.
But former Pataki aides argued that, unlike Spitzer, the Republican actually held the line on spending in his first budget while closing a $5 billion deficit, enacting tax cuts and reducing Medicaid spending.
The Legislature is expected to begin passing the budget bills today, though it’s uncertain whether the entire package can be voted on by the start of the fiscal year tomorrow.
State lawmakers added as much as $1.3 billion to Spitzer’s record $120.6 billion budget proposal.
One Big Apple boost is the $1.3 billion statewide property tax rebate program approved for the new budget. The average New York City resident would receive $127, with the average senior receiving a $95 check, according to Spitzer’s budget office.
Meanwhile, a health-care industry source is claiming Spitzer manipulated the numbers to make it look like he is getting a larger percentage of the cuts than he is.
The source said that while Spitzer is taking credit for enacting 52.2 percent of his proposed hospital cuts, he only got 31.5 percent of the reductions he wanted.
Spitzer’s aides are sticking by their numbers.
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