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County revolt brewing over late state budget

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New York's state Senate and Assembly are expected back at the State Capitol this evening for a special session called by Governor Paterson.

But it's unclear whether the Senate will actually vote on anything. In a conference call yesterday, Senate leader John Sampson wouldn't say whether all 32 members of his Democratic majority will be there. He refused to address reports that at least one Democrat is away on vacation.

The Senate couldn't pass the final revenue bill needed to complete the budget during the regular session in June, because one Democrat withheld his vote in order to force action on other legislation.

Sampson says he and Assembly Speaker Sheldon Silver have been meeting with Gov. Paterson on a number of issues, and they'll vote when those issues are settled. He said they've focused on a Medicaid contingency fund, and a measure to give SUNY and CUNY campuses more autonomy. But he wouldn't give any details.

The late state budget and financial crisis are taking a toll on local governments and contracted service providers. These groups say the neediest New Yorkers are affected most by New York's budget shortfall.

They were in Albany yesterday pleading for restoration of member items and state reimbursement. And a revolt is brewing among county leaders. Karen DeWitt reports.

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New York's counties deliver most of the social services mandated by the state- things like welfare, mental health care, and special education for disabled children.

The state, however has not paid counties for many of these services in months, partly because the budget is four months late, and partly because New York has been chronically short of cash for almost a year.  

Many counties say they are at the brink of financial ruin, and one county executive, Anthony Picente of Oneida County, has even begun a revolt. He says the state owes him $34 million dollars, and so he's stopped contributing the county's weekly share of Medicaid payments to the state, as a protest.

"They are basically shutting down county governments when they don't pay us the money they owe us for delivering their services," said Picente. "And that calls for a drastic measure."

Picente says his other options are to end services, which he refuse to do, or borrow money at exorbitant interest rates.

Steven Acquario, executive director of the New York Association of Counties, says other counties from every region of the state are considering following Oneida's lead.

"We have received numerous inquiries," said Acquario.

The State's Comptroller, Tom DiNapoli, agrees that local governments are bearing the brunt of the stresses of the recession. His annual report on local governments finds revenues are down significantly, including sales tax collections. Property taxes are also lower, as property values have declined. And the report finds counties are bringing in less money from the mortgage recording tax, because fewer houses have been bought and sold.

"They're really caught in a very difficult squeeze," said DiNapoli. "At a time when they are expected to still provide services to citizens."

DiNapoli would not endorse the actions of the Oneida County Executive, but says he can empathize.

"You can certainly understand his frustration," DiNapoli said.

Since Picente began his revolt, state budget officials have said they will pay all the back money owed to counties by late August.

Counties and other local governments are not the only ones with financial troubles. Many not- for- profits that contract for state services are also suffering from lack of funds.

Ron Deutsch, with New Yorkers for Fiscal Fairness, says many groups that offer services for the homeless, veterans, battered women's shelters, libraries and after school programs  were relying on legislative member items to help make ends meet. Governor Paterson vetoed all of the legislative member items from the Senate and Assembly's budget bills as part of a 6700 item veto marathon earlier this month, even ones that were approved in past years but had not yet been sent out. Deutsch says groups were counting on that money.

"The governor basically used an axe, rather than a scalpel to make these cuts," said Deutsch.

Deutsch says the groups ideally would like the legislature to override the governor's vetoes, but realize that the Senate may not have enough votes.

"We're open to whatever they can possibly do," said Deutsch. "We really believe they need to do something."

The governor and lawmakers will have the chance to reconsider the plight of counties, not for profits, and other aspects of the budget, when the legislature returns Wednesday evening for a special session ordered by Paterson.

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