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Cuomo Budget Proposes Painful Cuts, 10,000 Layoffs

MICHAEL GORMLEY   02/ 1/11 06:20 PM ET   AP

Cuomo

ALBANY, N.Y. — Gov. Andrew Cuomo on Tuesday proposed a budget that would cut overall state spending for the first time in 15 years as New York tries to escape crippling deficits, including up to 9,800 layoffs and massive cuts to schools and colleges.

The budget is being watched closely nationwide. Other states with fiscal years that begin after New York's April 1 start will also have to grapple with historic deficits, unsustainable spending and unaffordable work force levels without slowing already sluggish economic recoveries.

"New York state is functionally bankrupt," Cuomo said in his budget presentation to lawmakers, urging them to resist pressure from lobbyists and special interests. "In a down economy, this is a death spiral," Cuomo said.

Cuomo said the overall budget, including federal funds tied to state spending, is cut 2.7 percent under his plan, a reduction in spending not seen in Albany since the mid-1990s. That's $3.7 billion less than the 2010-11 budget. But most of the reduction reflects the automatic loss of more than $5 billion in temporary federal stimulus funds, which runs out this fiscal year. Cuomo actually increased the state funds by 1 percent.

Besides addressing a $10 billion deficit projected for the coming fiscal year, the spending cuts would reduce huge projected deficits in future years. Cuomo said the four-year total deficit would $9.2 billion, down from a projected $64.6 billion.

Cuomo's spending plan presented Tuesday addresses what the comptroller's office projected as a more than $10 billion deficit without new or higher taxes and without borrowing, a longtime Albany practice in hard fiscal times.

Cuomo's proposal would cut $918.4 million in state aid to New York City, more than half of it school aid, and provide no municipal aid to the city for the second straight year.

Although short of some expectations of a deeper cut in the state budget that jumped a record $14 billion since 2008, the proposal remains an uncommonly conservative plan for Albany.

"The question always was, would he 'walk the walk,'" said David Catalfamo, a GOP adviser and former top aide of Republican Gov. George Pataki, the last governor to reduce overall spending in a final budget. "This budget walks the walk."

Cuomo's $132.9 billion budget cuts education and health care spending and he said he seeks to avoid most layoffs through attrition and by securing concessions from unions in contract negotiations. The proposed layoffs would amount to roughly 5 percent of the state's 200,000 employees

"We are willing to sacrifice, but we will not be sacrificed," said Kenneth Brynien, president of the Public Employees Federation union, which represents 56,000 workers.

Cuomo's budget, which includes no new or increased taxes, calls for a 7.3 percent cut in state aid to schools, or $1.5 billion from the state's more than $20 billion in annual school aid. Cuomo said that means local school budgets will get 2.9 percent less state aid.

Operating aid to the State University of New York, City University of New York and community colleges would fall 10 percent. State aid to private colleges also would be cut 10 percent.

"Governor Cuomo's cuts to our kids' schools are the largest in history," said Billy Easton, executive director of the Alliance for Quality Education. "If they are adopted the damage to students will be permanent because children do not get a second chance."

Advocates for public schools, higher education and public worker unions will now take their case to the Legislature. The established practice in Albany is a governor proposes a low budget total in part by trimming areas the Legislature most wants to protect, then negotiating restorations.

Cuomo said he hopes to use attrition, estimated at more than 10,000 jobs a year, to help achieve $550 million in savings from the work force through contract negotiations to minimize layoffs. Last year, then-Gov. David Paterson had said he could have achieved almost half that total savings through union concessions without any layoffs.

The budget also would raise revenues by expanding lottery play, some fee increases, a few one-shot revenue raisers and a surcharge on horse racing in the state.

The proposed budget includes no new borrowing, but calls for another cut in the $50 billion Medicaid program that funds health facilities and programs and was cut deeply in the last two fiscal years.

"The magnitude of it is absolutely overwhelming," said Daniel Sisto, president of the Healthcare Association of New York State, which lobbies on behalf of hospitals and health care networks. "It's by far the largest cuts in our history."

Cuomo's budget doesn't call for extending a temporary income tax surcharge on New Yorkers making more than $200,000 a year, a measure Democrats in the Assembly are pushing hard to provide billions of dollars more in revenue to ease cuts.

Assembly Speaker Sheldon Silver, a Manhattan Democrat, said his conference needs to examine Cuomo's proposal, but he's concerned school aid cuts would hurt the poorest students.

"Clearly, we have a lot of things we have to look at," Silver said.

Senate Majority Leader Dean Skelos, a Nassau County Republican, said he could support the cut in school aid, a major issue for his Long Island district, because the state must curb spending and "that's where the money is ... and we're not going to raise taxes."

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Associated Press writer Michael Virtanen contributed to this report.

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