ALBANY, N.Y. (AP) - Gov. David Paterson wants the Legislature to grant him emergency, one-time power to close a $3.2 billion deficit in the face of inaction by lawmakers.
The bill would give him power to make spending cuts and take other actions to provide enough cash for the state to pay its December bills.
It's unclear whether the special power would be granted by lawmakers who have so far balked at Paterson's proposed cuts. There was no immediate comment from the Senate and Assembly majorities
State Sen. Ruben Diaz, a Bronx Democrat, says he won't vote for Paterson's cuts or his proposed bill. Diaz says Paterson is trying to act like a "macho man" for New York voters.
The state has faced a $3.2 billion deficit for months.
GOVERNOR PATERSON PROPOSES EMERGENCY LEGISLATION IN ADDRESS TO NEW YORKERS
Executive Authority Option Grants One-Time Authority to Close Current-Year Budget Deficit
Permits Governor to Administratively Reduce Payments Across-the-Board by an Amount Needed to Bring the 2009-10 Budget Back into Balance
Legislation Provides Critical Tool to Protect State’s Finances during Unprecedented Fiscal Crisis
Governor David A. Paterson today submitted emergency legislation – the Executive Authority Option – that would grant the Executive Branch the one-time authority to administratively direct the reduction of 2009-10 fiscal year payments in order to close a $3.2 billion current-year budget gap. This measure would provide a critical tool to help protect the State’s finances during an unprecedented fiscal crisis, which was partly caused by a dramatic decline in revenues.
Governor Paterson announced the legislation in a web address directly to New Yorkers, saying the Executive Authority Option “would give me, as Governor, a one-time authority to close the current-year budget deficit – to maintain New York’s strong credit rating and keep our State afloat.”
“I want to make clear that this is not a cash flow problem that can be fixed with one-shots or creative accounting. This is a lack-of-cash crisis that threatens the financial stability of our State. Unless we take action, the State will run out of money,” Governor Paterson said. “For seven weeks, I have tried to persuade the Legislature to face this reality. So far, certain legislators remain unwilling to acknowledge the severity of the crisis or to do what must be done. The people of New York have waited long enough.”
Payment reductions directed under this legislation would be implemented in an across-the-board manner that is “uniformly applied to the extent practicable.” Moreover, these reductions would be limited to an amount necessary to bring the state budget back into balance. If the Legislature also approves the tax penalty forgiveness program, fund transfers, and other non-spending-reduction-related measures included in Governor Paterson’s original Deficit Reduction Plan, $1.3 billion in payment reductions would occur under this legislation based on current projections.
The proposed bill includes a legislative finding that New York’s current-year budget deficit “presents a genuine danger that the State will lack the funds necessary to make payments as they come due.” It also says that “the State’s extremely precarious and worsening fiscal situation” necessitates the payment denials permitted under its provisions.
This emergency legislation is only applicable to appropriations in the current fiscal year. The specific payments that will be reduced must be identified no later than December 31, 2009. Additionally, the law would explicitly exclude from reduction payments for debt service and collective bargaining obligations, as well as those for expenditures required under federal law, the State constitution, or the federal constitution.
Click here to watch the governor's full statement.
Sen. David Valesky statement
"The Governor just today sent us his 400-plus page DRP bill, which we will be reviewing over the coming hours and days. The Senate already has achieved bipartisan agreement on more than $2.8 billion in cuts and spending reductions, and we remain very close to agreement on a solution that will result in deficit closure while also protecting property tax payers from additional burden."
