Fiscal Challenges Roiled By Leadership Stalemate

The upcoming special session in Albany called by the governor should prove to be quite frustrating-at least if Paterson believes that his partners in government are going to step up and help him resolve the current fiscal mess. The bleak forecast makes for a wide range of unpalatable choices.

As the NY Times tells us: "Gov. David A. Paterson said in an interview on Sunday that he would almost certainly seek billions of dollars in cuts to Medicaid, as well as midyear reductions in school aid, to address New York’s worsening fiscal condition. He also said he expected to urge labor unions to reopen the contracts they have struck on behalf of public employees as a way to avoid or decrease layoffs."

We keep wondering, who's David's partner for this marathon dance? It gets worse: "Some of the cuts will be sought when lawmakers return to Albany on Nov. 18 for a special session to help close a $1.5 billion budget gap for the current fiscal year, which ends in March, and to get an early start on next year’s budget. Any cuts would need support from the Legislature. And the governor will have to propose far steeper cuts when he introduces a budget next month for the fiscal year that ends in March 2010 — that budget will need to close a $12.5 billion deficit."

Current senate leader, Dean Skelos, has drawn his own line in the sand; and don't expect Malcolm Smith to lend a hand while he's still searching for enough votes to insure that he's lead the majority: "Dean G. Skelos, the Senate majority leader and a Long Island Republican, has vowed to block education cuts in the Nov. 18 special session — “New York State must not balance its budget by offloading its costs to schools,” he said recently, and he has been hailed by teachers’ unions for ruling out such cuts."

Bill Hammond weighs in this morning in the NY Daily News, chiding legislative leaders for cowardice: "Gov. Paterson must feel a bit like Gary Cooper in "High Noon" these days.
He's doggedly trying to round up a posse to stand up to the special interests and face down the state's massive budget deficits. But members of the Legislature are pulling down the shades and cowering under the barstools."

When asked, state lawmakers couldn't give the governor any cost cutting recommendations: "The state burns through more than $120billion a year, yet the people we elect to the Assembly and Senate did not come up with one dime that was being wasted or misspent." No one seems to want to take on the powerful in this fight. As the NY Post reminds us: "Gov. Paterson's plan to slash state spending by $2 billion next week came under pre-emptive attack yesterday from public-employee unions, hospital workers and the hospital industry itself. The critics claimed Paterson, who has yet to detail the cuts he'll seek at an "emergency" legislative session next Tuesday, should cut state spending in other areas, raise taxes, or look for a federal bailout."

Leadership uncertainty exacerbates Paterson's problems. As the Times points out: "But Democrats won 32 of 62 seats in the Senate in Tuesday’s election, winning a majority for the first time in more than four decades. Three Democrats, however, have yet to commit to supporting the Senate minority leader, Malcolm Smith, a Queens Democrat, as majority leader when the new Legislature is seated in January. That leaves the Senate’s leadership uncertain at an inopportune moment."

And the NY Post chimes in on this point: "Gov. Paterson is heading for his first major defeat, as lawmakers appear likely to reject his $2 billion in proposed state spending cuts aimed at containing a ballooning budget deficit, The Post learned yesterday. Senate Majority Leader Dean Skelos (R-Nassau), smarting over last week's loss of majority control to the Democrats, may even refuse to take up Paterson's budget-cutting request at the "emergency" session called by the governor for a week from tomorrow, sources said."

The problem here lies with the fact that Skelos doesn't need to have Republican fingerprints all over the drastic cuts: "And by waiting until January to take action, Skelos could leave Democrats with all the blame for what are expected to be widely unpopular budget cuts. That is assuming his uphill efforts to persuade two Democrats to defect to the GOP side in order to keep Republicans in control are unsuccessful."

Which means that the next few weeks and months aren't gonna be easy for the governor to navigate-as the forces start to gear up to fight his moves to greater austerity: "The two largest areas of state spending - school aid and Medicaid/health care - are among the most popular programs with state lawmakers, who receive millions of dollars in campaign contributions from the teachers and hospital-workers unions, as well as from the health-care industry itself.". As Governor Paterson battles all of the most entrenched Albany interests, it's likely to get very lonely at the top.