Public Employee Press

State budget would hit city hard

By DIANE S. WLLIAMS

Facing the daunting challenge of closing a $7.4 billion deficit for the 2010–11 fiscal year, which begins April 1, Gov. David A. Paterson proposed a state budget in January that would make deep cuts in revenue sharing, education aid, health care and social services.

If enacted by the Legislature, the governor’s cuts would be devastating to New York City and could cause layoffs.

In testimony before the state Legislature on Jan. 25, Mayor Michael R. Bloomberg called the budget cuts “appalling.” He said they would lead to 18,500 layoffs from the muncipal workforce, including 8,500 teachers, 3,150 Police Officers, 1,050 Firefighters, 900 Correction Officers and 500 Parks’ personnel.

As PEP went to press, Bloomberg was expected to provide further details when he unveiled his preliminary fiscal year 2011 budget on Jan. 28.

Paterson faces a tough fight over the draconian plan. In recent years, state lawmakers have worked with union and community forces to ameliorate the impact of numerous cuts. Many District Council 37 members were set to bus to Albany Feb. 8 to fight the cuts during the Lobby Day organized by DC 37’s parent union, the American Federation of State, County and Municipal Employees. Leaders of DC 37 and many locals are preparing to battle any layoff proposals in upcoming City Council budget hearings.

The governor’s drastic cuts would hit hard in a state and city already walloped by the Great Recession. Unemployment in New York City rose to 10.6 percent in December. The governor said his plan is the only way to curb patterns of reckless spending by the Legislature and prevent a lowered credit rating for the state.

In years past, working New Yorkers and robust Wall Street profits generated a substantial flow of taxes for the Empire State. But, without that steady revenue stream, the climb up from the most severe economic downturn since the Great Depression will be extremely difficult and prolonged. Economists do not foresee the state matching its pre-2008 income until 2013 or later.

Paterson’s proposed $134 billion budget would hold the increase in state spending for 2010-11 to under 1 percent and close the gap by:

• cutting funds for health-care providers and programs by $1 billion and raising some $923 million in dedicated taxes and assessments to stave off deeper cuts;
• raising over $1 billion from so-called “sin taxes” on cigarettes and sugared sodas to offset cuts in health care;
• generating $1 billion from increases in taxes and certain fees and possibly delaying state tax refund checks;
• increasing Medicaid spending to $51.5 billion, adding $900 million
  to cover cost increases over last year, and
• cutting the state operating budget by $1 billion, including lopping $500 million from state agencies across the board.

Cuts to NYC

The fiscal plan would have a seismic effect on New York City, cutting off $1.3 billion in state aid, including:

• eliminating the $650 million NYC AIM revenue sharing program;
• cutting New York City school aid by $500 million;
• reducing social services funds by $125 million and cutting $69 million from homeless programs, housing
  assistance and other aid to needy families;
• taking $56 million from community colleges, and
• chopping Tuition Assistance Program grants by $75 per student.

These cuts would come at a time when unemployment and the crippled economy have created record needs for safety net services among New Yorkers. The federal stimulus program, which helped the state last year with $4 billion, is scheduled to expire during the 2010–11 fiscal year, making this year’s cuts harder to cope with than any since the 9/11 disaster.