ALBANY — Gov. David A. Paterson wants to cut the growth rates in school aid and Medicaid in the current fiscal year rather than make actual cuts in those areas in his efforts to get the state's ballooning budget deficit under control.
At a televised press conference from Manhattan on Wednesday, the governor said his proposals to trim $5.2 billion from the state's ballooning budget deficit over current and next fiscal years are spread across every area of state expenditures.
The governor's plan is designed to serve as a blueprint for state Legislators, who will return to Albany on Nov. 18 to consider budget-trimming legislation. Gov. Paterson asked legislative leaders to release their own proposals last Friday, but none of them complied.
"As we move to special session it is important to recognize that the more we delay action the more we compound our problems," Gov. Paterson said. "We aren't going to get out of the quagmire we're in until we reduce our spending."
Highlights of the governor's plan include:
■ Reducing the annual growth of education spending from 9 percent to 5 percent. Individual districts would see their aid reduced on a sliding scale from 3.1 percent to 9 percent based upon the district's wealth percentile. Projected savings: $585 million in FY 2008-09, $844 million in FY 2009-10.
■ Growth in Medicaid spending would be reduced from 2 percent annually to 1 percent. Projected savings: $572 million in FY 2008-09, $1.2 billion in FY 2009-10.
■ Tuition at SUNY colleges would increase by $600 annually, beginning with a $300 increase in the spring of 2009. A percentage of the funds from these increases will be reinvested in the SUNY system. Projected savings: $115 million in FY 2008-09, $233 million in FY 2009-10.
■ Aid and Incentives to Municipalities for localities outside New York City would be frozen at current levels for FY 2009-10. New York City's AIM payment would decrease by $41 million. Projected savings: $134 million in FY 2008-09, $110 million in FY 2009-10.
■ A 3-percent raise for state employees in 2009-10 would be eliminated. Five days of employees' pay in the current fiscal year would be deferred until they leave state employment. Projected savings: $137 million in FY 2008-09, $167 million in FY 2009-10.
■ Other proposals include closing and downsizing several youth detention facilities, expanding the bottle bill, reducing Environmental Protection Fund spending, reducing library aid, and reducing arts grants.
If adopted as proposed, the plan would close the $1.5 billion shortfall in the current budget, while reducing the FY 2009-10 budget deficit to $8.8 billion from $12.5 billion, Gov. Paterson said. Deficits of $15.8 billion and $17.2 billion are still forecast for fiscal years 2010-11 and 2011-12, respectively.
The governor's budget director, Laura Anglin, said that further trimming and cuts are likely when Gov. Paterson presents his executive budget proposal for FY 2009-10 on Dec. 16.
"This is a preview for the difficult choices that we'll have to make this December in next year's budget," she said.
School funding and Medicaid costs comprise a combined 52.2 percent of the current budget. Ms. Anglin said that 57.2 percent of the governor's proposed savings come from these two sectors — 28.9 percent from school aid and 28.3 percent from Medicaid.
"Even after we take these actions, growth in school aid will still be 5 percent — this is not a reduction in school aid, it is a reduction in growth," she said, adding that Medicaid spending will still grow by 10 percent next year.