ALBANY – Gov. Paterson today called for a 7% spending cut at all state agencies and said the state needs to reduce spending by $1.23 billion in the current budget.
Paterson said he will cut $630 million “administratively,” through agency cuts, a hiring freeze and reducing the workforce by about 1,000.
He called for the Legislature to return to Albany Aug. 19 and cut another $600 million to balance the current budget.
Paterson apologized to the state workers, acknowledging they are not to blame for the state’s fiscal woes.
Still, he said, cutting their numbers is “the only way I can adjust this problem without the Legislature.”
The 7% cut comes on top of a 3.5% reduction he imposed after taking office in March.
The announcement – details of which were first reported by the Daily News – comes the morning after he took to the airwaves to describe the state’s worsening financial picture.
In a nod to the New York City fiscal crisis of the mid-1970s, Paterson last night updated then-Gov. Hugh Carey’s memorable line that “the days of wine and roses are over.”
“The era of buy now and pay later and later is over,” Paterson said, also suggesting the state may have to sell or lease some of its “assets,” like bridges.
Paterson said his budget office projects a three-year, $26.2 billion deficit, up $4.7 billion, or 22%, from the $21.5 billion estimated three months ago.
Next year’s projected deficit is $6.4 billion, up from the $5 billion estimate 90 days ago.
A big reason is the decline on Wall Street, which represents 20% of the state’s revenues.
Paterson said the 16 banks that pay the most taxes on their profits paid $173 million to the state in June 2007 and just $5 million this June, a 97% decrease.
“The fact is, we confront harsh times,” Paterson said.
“This situation will get worse before it gets better, but the time to act is now.”
In calling the Legislature back to session, Paterson noted that a drop in state Thruway traffic is evidence many are feeling the need to cancel vacations and reprioritize spending.
“Your government is going to follow your lead,” he said. “We’re going to end legislators’ vacations and bring them back to Albany to reprioritize the way we manage state’s finances. . . . Government will learn to do more with less.”
Paterson’s speech – the latest in a string of dire economic messages since he took office in March – received praise from watchdog and business groups.
“The more he drives home this message the better,” said E.J. McMahon, director of the Manhattan Institute’s Empire Center for Public Policy.
Legislative leaders and public employee unions weren’t happy.
Assembly Speaker Sheldon Silver said his house is prepared to make “tough but thoughtful decisions that are necessary,” before ticking off a host of areas he doesn’t want harmed.
Danny Donohue, president of the Civil Service Employees Association, said, “When the governor talks about families who can’t afford to heat their homes, can’t afford to put gas in their cars and can’t afford groceries, he is describing his own workers and their families, who will only be hurting more after he takes away their jobs.”
Mayor Bloomberg called Paterson’s address “an urgent call to action” and said the governor “demonstrated he is ready to stand up to the interest groups.”
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