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Paterson identifies additional $1.2 billion for state budget

By Cara Matthews •Albany Bureau • February 9, 2010, 9:00 pm

ALBANY -- Gov. David Paterson announced Tuesday that his administration identified an additional $1.2 billion in resources for the 2010-11 budget he proposed last month.


Part of the money would cover an additional budget shortfall of $750 million that the governor announced last week, just two weeks after releasing his $134 billion spending plan, which closed a $7.4 billion projected deficit.

The remaining $485 million of the $1.2 billion would be kept as a reserve for fiscal uncertainty, according to the governor's budget office.

Paterson said the state is anticipating an additional $1.06 billion in federal funding that was proposed in President Barack Obama's budget and in legislation before Congress. He urged Congress to pass the measure soon.

"Fiscal relief for state governments dealing with substantial budget deficits is a critical component of President Obama's economic and financial recovery agenda," the governor said in a statement.

Assembly Speaker Sheldon Silver, D-Manhattan, said the governor is overstating revenues. Paterson assumes New York will receive an additional $1 billion in Medicaid funds that haven't been approved by Congress, Silver said.

Silver said the governor's financial plan moves nearly $1.4 billion of obligations this year, such as income-tax refunds, into the 2010-11 fiscal year.

Other amendments to the governor's budget relate to the Metropolitan Transportation Authority payroll tax, the proposed sale of wine in grocery stores, aid to the Yonkers school district and other initiatives.

One of the most controversial amendments would change the structure of the MTA payroll tax to place more of a burden on New York City businesses and less of one in the suburbs, where there is less concentration of MTA services.

Instead of 34 cents for every $100 of payroll, employers in counties outside New York City -- Dutchess, Orange, Putnam, Rockland, Westchester, Nassau and Suffolk -- would pay 17 cents for every $100 of payroll. New York City employers would pay 54 cents for every $100 of payroll.

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The proposal has drawn praise from lawmakers who represent the suburban counties and criticism from New York City officials.


The state Business Council said the plan would make a bad situation worse.

"The current tax is unfair to the suburban counties in the region. Reducing the tax in the suburban counties is vital," Ken Adams, head of the council. "But shifting the burden to New York City employers is not the answer."

Another controversial amendment would change the proposal to permit the sale of wine in grocery stores by increasing the required franchise fee for companies with more than $1 million in gross sales. That would bring in an additional $162 million in 2010-11, and the money would go toward health-care programs.

The Last Store on Main Street Coalition, which is opposes the sale of wine in liquor stores, said governor's revenue projections are inaccurate.

"Paterson's fantasy revenues may look good on paper but will never be realized given the burden these fees would mean for business owners who will struggle to afford them," Jeff Saunders, head of the Retailer's Alliance and coalition founder, said in a statement.

New Yorkers for Economic Growth and Open Markets said it supports the amendment, which would give grape growers more places to sell their product, provide consumers with more choice and potential cost savings on wine and raise nearly $300 million for the state over two years.

Other amendments proposed by the governor Tuesday would:

* Reduce funding for new Local Government Efficiency grants from $10 million to $5 million in the 2010-11 and 2011-12 fiscal years.

* Restore $1.96 million in video lottery terminal aid for Yonkers so the full $19.6 million payment for city schools could be paid.

* Reallocate a portion of proposed reductions to the State University of New York statutory colleges ($3.2 million for Cornell University and $304,000 for Alfred University) to SUNY state-operated campuses to ensure that cuts are more equitable. Statutory colleges are parts of private universities that receive state funding.

* Exclude nurses from in two-year degree programs from the governor's proposal to reduce the maximum Tuition Assistance Program grant from $5,000 to $4,000. There is an ongoing shortage of nurses in the state.

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