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December 2, 2009

NY Legislature to vote on deficit cutting plan

ALBANY, N.Y. (AP) — New York's Legislature is scheduled to pass its $2.8 billion deficit reduction plan Wednesday, even as Gov. David Paterson said far more painful cuts will be necessary.

Paterson said he'll take the extreme steps of delaying aid to schools and hospitals as needed to make sure the state has enough cash to pay its bills and avoid a costly downgrade of its credit rating. The aid could be delayed until the coming fiscal year beginning April 1, effectively resulting in at least a temporary school aid cut that legislators refused to approve.

A vote in the Senate was postponed from Tuesday night because of delays in printing the bills, although the Democrat-led Assembly planned to remain in Albany to take its vote.

That means final legislative approval could be made in the Senate's session beginning Wednesday morning.

If passed, the deficit reduction plan shows the Democrat-led Legislature and the Democratic governor again failed to agree on how to address New York's fiscal crisis.

Paterson refuses to even call the plan an agreement because he said it falls far short of addressing the full deficit, although he will sign the measures into law.

The Democratic governor says the budget gap is more than $3.2 billion, while state Comptroller Thomas DiNapoli estimates it at $4 billion. The deficit is a result of the gap between dwindling revenues in the recession.

"This is short-term focus, rather than thinking about a solution that would take some leadership," said Elizabeth Lynam of the independent Citizens Budget Commission, a government watchdog group. "It buys them some time, but it won't help them in two months when they face a $6 billion to $9 billion budget gap."

Paterson says that court decisions support his plan to delay payments in a fiscal emergency.

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