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More of the same likely as New York enters another week without a budget

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New York's budget is still overdue. Last week ended without progress and this coming week could be more of the same. Politcs continues to complicate the picture, as Senate Democrat Pedro Espada, whose vote is key to his party's slim majority, is under investigation. And Gov. Paterson will have to repeat his introduction of a budget extender. He may allow some construction projects to go ahead this time...just not with state money. Karen DeWitt has the story.

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Karen DeWitt
NYS Capitol Correspondent

Another week came and went at the State Capitol, with no progress made on approving a state budget, which is now over three weeks late.

Week four of the budget stalemate will likely begin with approval of another budget extender, the fourth since the April 1 budget deadline was missed.

Governor David Paterson has been authorizing only the bare minimum of spending necessary to keep the state running. This time, the governor says he will allow some road and bridge construction projects previously held back to go forward, as long as they depend on federal and local funds and do not rely on state money.

Paterson says he still remains at odds with the legislature over the budget. He says the legislature  needs to come up with $3 billion dollars in additional cuts or revenues that he can accept, like his proposed taxes on cigarettes and soda, to help close a $9-billion deficit. But the governor says he's trying to keep an open mind, and he would not rule out accepting some new taxes floated by Senate democrats, including fees on new car purchases, and boat docking fees.

"I wouldn't rule out anything that the legislature would accept at this point," Paterson said. The governor has not held any meetings with legislative leaders inrecent days.

Senate and Assembly Democratic leaders have been working together, but are still apart on some major issues. Senate Democrats want to include some property tax relief in the budget, while Assembly Democrats would rather restore $600 million of the $1.4 billion in cuts that the governor has proposed in school aid. They say if there's not enough money to pay for schools, then it might not be the best time to budget for property tax cuts. Paterson put it in more blunt terms, calling it "bureaucratic games".

"The only way we could give them the money back is to borrow it," said Paterson. "That's the ultimate bait and switch."

The governor says he'd rather see a property tax cap, along with a state spending cap, to hold the rate of taxes down.

There could be another complication in passing a budget. Senate Democrats already have a somewhat shaky hold of the majority, with just 32 votes, the minimum needed to control the Senate. They may have an even harder time keeping control, now that the Majority Leader, Pedro Espada, is under criminal investigation. Espada was charged by Attorney General Andrew Cuomo with stealing $14 million from a health care clinic he controls. Federal and state agents also raided the clinic, and seized boxes of documents.

There are already calls by a handful of Senate Democrats for Espada to step down from his leadership post. If Espada is indicted, there is a possibility the Senate could vote to expel him. Then Democrats would not have enough votes to approve a budget.

The 30 Republicans in the Senate have so far not been willing to sign on to the Democrat's version of a spending plan.

"We're going to say no to new taxes and fees, " said Senate GOP Dean Skelos. "We are going to say no to increased spending."

Meanwhile, a report by the State Comptroller, Tom DiNapoli, confirms what the governor's budget office has been saying for some time now. If no new spending plan is put in place, and no cuts or other adjustments are made, New York State will be in the unprecedented position of running short of cash in the months of May, June, July and August.

Paterson has already put off paying schools $2.1 billion in aid that districts are owed. He's said he may have to post pone or cancel more aid payments to schools, local government, and others, if an agreement on a new budget can't be reached by then.

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