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New York budget troubles getting worse

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It looks like New York's budget deficit is growing. Estimates from the State Comptroller say the gap is close to a billion dollars this year, and could be more than $10 billion dollars next year. Karen DeWitt reports.

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Karen DeWitt
NYS Capitol Correspondent

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For the third time in three years, the state’s budget is not in balance. This time, a gap as wide as a billion dollars has opened.

The State’s Comptroller, Tom DiNapoli, says the reason is simple. The state is not taking in enough money to meet all of its bills.

“We’ve put our budgets together based on overly optimistic estimates of revenue,” said DiNapoli.

Medicaid, the state run health care system, is also spending more money. Because of the recession, fewer people have jobs and employer provided health care, and are using more government services.

The state’s budget director, Robert Megna, says while he puts the current year gap at smaller amount, around $315 million dollars, he agrees that tough challenges lie ahead for the state’s next governor, Andrew Cuomo, who will face as high as a  $10 billion dollar budget gap next year.

“We’re in a very difficult place, financially,” Megna said.

Megna spoke after a forum at SUNY’s Rockefeller Institute.  During his presentation, he said that during the past three years, New York has taken many of the steps customary in an economic downturn, cutting spending, and raising taxes, including a surcharge on the wealthy. But he says, in the past, the economy had generally recovered by now, and increased tax revenues solved most of the fiscal problems. He says while the state’s economic picture is improving, there is now a smaller tax base, due to cut backs in the financial industry. While Governor Paterson’s budget director says it’s not his place to give the new governor- elect advice, he says if the current trends hold, then the state is going to have think seriously about eliminating some services altogether.

“The state is going to have to decide that there are certain things it’s not going to be able to do anymore the way it’s been doing them in the past,” Megna said. “The numbers just don’t allow it.”

Governor Paterson has called a special session on November 29th, and Megna says a plan to close at least the current year’s budget gap will likely be on the agenda.

Paterson in the past has recommended across the board cuts to close the gap.

Comptroller DiNapoli agrees that actions should be taken soon, to avoid making next year’s $10 billion dollars and growing deficit even worse.

“It’s a question of dealing with it now, or dealing with it in an even bigger way next year,” DiNapoli said.

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