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NY Gov. on the Hot Seat over Budget Cuts

Amsterdam News, News Report, Nayaba Arinde Posted: Aug 18, 2008

The number crunchers are scrutinizing Gov. David Patersons billion-dollar budget cuts and after the sharp intakes of breath comes the gasping for air.

David A. Paterson, New Yorks 55th and first Black (and legally blind) governor, proudly states that his 23 years in public office have been dedicated to serving the people of New York. This week, however, critics charge that his new $2.6 billion savings plan for consideration by the Legislature hurts more than helps the very same people.

This budget is being balanced on the backs of the states working people, charged Councilmember Charles Barron. An alternative would be to tax the rich and those who can best afford it, like the Steinbrenners and Ratners who are given huge tax breaks that could bring in hundreds of thousands of dollars. Why does Yankee Stadium warrant more consideration than the working - and middle-class people of this state?

Patersons aims to force the state to tighten its collective belt in this dire economy would have his administration slashing $1 billion this year and $1.6 billion in 2009-10 in government spending. The savings, Paterson maintains, would reduce next years predicted $6.4 billion budget deficit by over 40 percent, down to $3.7 billion.

Last month, Paterson called a special emergency economic session of the Legislature for August 19, also asking the Assembly and the Senate to make $600 million in reductions for the next year. This was followed by his no-question-asking freeze and cut of state agency spending by $630 million. And, as if anticipating a hue and cry, Paterson declared, As I said last month, my goal is to reduce spending in the 2008-09 budget by at least an additional $600 million. Today I have provided the Legislature with over $1 billion in current-year savings options as we begin a productive dialogue and work together toward the goal of ensuring the states fiscal integrity.

The governors measures include cuts or reduced spending to Medicaid of $506 million in 2008-09 and $1 billion in 2009-10. CUNY will bear witness to reduced general fund support by 7 percent, meaning a savings of $51 million in 2008-09 and $51 million in 2009-10. Why do we need to target the poor, Black and Hispanic communities instead of the special interest groups that have lots of money? asked State Senator Ruben Diaz in a statement.

He pointed out the politically obvious, As usual, no one wants to go after special-interest groups to solve these problems. The easiest targetsto no ones surprise nor concernare funding cuts for Medicaid, higher education and social services that will have a disproportionate effect on the lives of poor and less fortunate New Yorkers.

It is absurd to cut $51 million from CUNY and $506 million from Medicaid, said Barron. Come on, David! We need to tax the rich; dont punish the poor. The solution, he surmised, is simple and painless. If we do a millionaires tax, we dont have to hurt the poor and working class, who are already struggling to make ends meet. We could put a 2.5- percent increase on those who make $500,000; a 3.5-percent increase on those who make a million dollars; a 5-percent increase on those who make $5 million; and a 7-percent increase on those who make $10 millionthat constitutes 97,000 people, which is only 2.5 percent of the population, and that will generate $6.5 billion dollars, and you dont have to cut anything, Barron implored.

We need to have the courage to do that. CUNY students have suffered enough because of Mayor Bloomberg and the City Council passing the bill that I voted againsttaking away $5 million from their scholarships. Reports show that their graduates spend at least 10 years in the state and contribute billions of dollars to the economy.

How can you cut health care spending by reducing the monies you give to Medicaid? Thats money provided to hospitals to help struggling working-class families. Why would you cut Medicaid and monies for education when you can tax the rich?

The Amsterdam News was unable to reach a vacationing Gov. Paterson for a direct response to Barron and Diaz, but this week, in announcing his proposals, the governor said, On April 1, 2009, in just 232 days, we will have no other choice but to reduce spending and close a $6.4 billion budget gap. And if the economy continues to worsen, the spending reductions I have proposed will be necessary to help ensure the current years budget remains in balance. Either way, the longer we fail to act, the more painful and limited our choices will be.

During his July 30 announcement of his administrative savings proposal, Paterson said, Just like families across New York facing difficult economic times, our state government needs to scrutinize its spending carefully and acknowledge that we simply cannot afford everything we want or everything we counted on when we thought we had more money.

Additional proposals to further control state Medicaid spending, which he says is the largest area of the budget, will would produce $505.7 million in savings during the current fiscal year and $1 billion in 2009-10.

The proposed savings will affect areas including reducing reimbursements to pharmacies, hospitals, and nursing homes and going after the insurance industry for monies owed.

Saying that he wanted to add my two cents in helping the governor solve New York States fiscal crisis, Sen. Diaz noted the serious fiscal hallenges with our states next budget and has some difficult decisions to make regarding this enormous projected deficit.

"If the governor really wants to balance the budget and find some money to fill the gaps, Diaz announced, Id like to once again propose the following suggestions. These cuts will not have a serious impact on the basic needs of less fortunate New Yorkers: untaxed sales of cigarettes. Each year, New York State foregoes collecting $500 million on tax-free cigarettes sold on Indian reservations. Why cant the governor cut that support and impose taxes on those cigarettes? If he does, we will find $500 million and we wont have to cut health services, college education, and hurt the needy. Diaz continued that a tax surcharge on wealthy New Yorkers would go a long way to help the state.

According to the Working Families Party, if the governor were to propose a tax surcharge on wealthy New Yorkers who make in excess of $10,000 or more per week and eliminate corporate loopholes, the state can generate 6 to 7 billion dollars in new tax revenue per year. This will pay for middle-class and working-class tax relief and keep our transit, school and health systems in decent repair.

Furthermore, Diaz suggested that uncollected taxes are another accessible source of revenue. Presently, when people in New York make purchases with credit cards, the credit card companies send the taxes collected and owed to the state back to the merchants, instead of sending the money directly to the state. Why cant the governor force credit card companies to send this money already collected directly to New York State instead of to the merchants?

And finally, Diaz suggested a tax on the bulk purchasing of prescription drugs. Many food pantries across New York State wisely purchase food at bulk rate, saving millions of dollars. Why cant the governor propose bulk rate medication purchases for institutions instead of catering to the pharmaceutical companies? asked Diaz.

The states budget needs to be balanced, but not on the backs of the poor, proclaimed the state senator from the Bronx. Governor Paterson can take the path of least resistance and find solutions to our fiscal problems by hurting the poor and the needymany of whom are Black and Hispanicand taking away basic services they need to survive. Or he can attempt to solve our fiscal problems by having the political courage to go after special interest groups, by going after those who already owe, and by going after those who have more than they need.

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