New York state is in crisis, and everyone's going to feel the pinch.
That was the gist of Gov. David Paterson's Oct. 15 in Albany, outlining his two-year, $5 billion Deficit Reduction plan, which aims to eliminate the state's 2009-10 budget gap.
"The $500 million in agency spending reductions I announced earlier this month represented an important first step, but I cannot eliminate this substantial deficit without the cooperation of my colleagues in the legislature," Paterson said. "During a time of uncommon difficulty, we need to work together for the common good and enact a consensus plan that helps us avoid the severe consequences faced by other states that failed to swiftly address their budget problems. This will mean hard and painful choices, but that is exactly the type of leadership New Yorkers deserve from their public officials."
The Deficit Reduction Plan would have an impact of $3 billion in 2009-10 and a recurring impact of $2 billion in 2010-11. Over the state's five-year financial plan period, the governor says it would produce cumulative savings of $9.3 billion to help continue addressing the state's long-term structural deficit.
Major components of the plan include tax penalty forgiveness, more aggressive prosecution of Medicaid fraud, debt management and long-term structural reforms.
But for local superintendents and school boards, the most troubling aspect of the DRP is the call for across-the-board spending reductions, including a $480 million state fiscal year cut to school districts ($686 million on a 2009-10 school-year basis). The governor's office said the reduction would be structured progressively based on local fiscal capacity, student need, and residential tax effort. Prior to proposed mid-year actions, enacted 2009-10 school year School Aid was projected to total $21.9 billion, an increase of $415 million or 1.9 percent from 2008-09. After enactment of the DRP, overall 2009-10 school year School Aid would total $21.2 billion, a decrease of $271 million or 1.3 percent from 2008-09.