NY: Aid to schools slashed in Paterson budget for next year

By Tom Precious
Updated: 12/16/08 10:38 AM
http://www.buffalonews.com/258/story/524686.html

ALBANY … Aid to public schools will be cut by $700 million, state university tuition will rise, the STAR property tax rebates will be scrubbed, prison facilities will close and state workers who aren't laid off will get no pay raises under a budget plan Gov. David Paterson proposed this morning.

Facing a $15.4 billion deficit over the next 16 months, Paterson called for retrenchment in almost every area of the state's budget.

"New York is poised at a defining moment in its history. We are faced with the greatest economic and fiscal challenge of our lifetimes," Paterson said in a "Dear New Yorkers" letter accompanying the stack of budget documents this morning.

The plan proposes to keep flat the state's general fund spending at $55.4 billion. The entire budget, which includes federally-funded programs, will grow by $1.3 billion to $121.1 billion, a 1.1 percent increase that is the lowest rate of growth since 1996.

The Paterson budget raids an assortment of accounts that are not part of the state operating budget, increases taxes and fees by $4.1 billion, eliminates sales tax exemption on clothing and footwear purchases under $110, and places new sales taxes on everything from cable TV and satellite radio services to haircuts and massages. The state's current cap on gasoline taxes would also be eliminated while a new 18 percent sales tax will be placed on non-diet sodas.

The proposal has two goals: eliminate a $1.7 billion deficit in the current fiscal year that ends March 31 and erase a $13.7 billion deficit for the 2009 fiscal year.

Much of the $1.7 billion would be achieved in ways Paterson proposed in November, and which lawmakers rejected in a special session. That includes a cut of $500 million to hospitals and nursing homes, expansion of the bottle bill to non-carbonated beverages and a $620 hike for state university tuition. Only public schools would be exempt from the cuts in the current year.

But that changes for public schools in 2009. Schools would see state aid drop overall by 3.3 percent.

"The decision to recommend a reduction in school aid is a personally difficult one for me," Paterson said in a statement.

Besides year-to-year cuts for some schools - the list of individual school district aid has not yet been released this morning - the plan also spreads out promises of increased aid for the neediest districts and universal pre-kindergarten programs from a four-year schedule to eight years.

To make up for the cuts, Paterson proposes exempting schools from the state's expensive, union-backed Wicks Law … which drives up public facility construction costs … and new pension reforms to reduce local costs.

Overall, Paterson calls for $3.5 billion in various health care savings.

The budget will see the state's Medicaid program grow 3.8 percent, instead of the 12 percent current law would see it increase by in 2009. Hospitals and nursing homes the past week have warned of a crisis in the level of care if Paterson's plan goes forward.

Hospitals will be in line for $700 million in state cuts, while nursing homes would see $420 million in reductions. Home care programs, designed to keep people out of expensive settings, such as nursing homes, are facing $189 million in cutbacks.

Meanwhile, the state's health insurance industry would be slapped with $855 million in higher assessments … money the industry says will be passed along to consumers in the form of higher premiums.

Elimination of the STAR rebate program … which provides homeowners with a check every fall … will cost property owners $1.4 billion in tax breaks. The overall STAR property tax program will remain in place.

Paterson also proposes a new low-interest loan program for students attending colleges in New York, as well as the first increase in basic welfare payments in 18 years. The state work force will be reduced by 3,100 people, including 521 layoffs, which will come from the consolidation of a number of state agencies and facility closures, such as prison camps and child detention centers. State workers will be asked to defer five days of pay and give up a scheduled three percent salary increases in 2009. And state retirees and workers will see them paying a greater share of their health insurance costs.

The plan also calls for a new pension tier for state and local government workers, designed to save money for both the state and the counties and other localities whose workers are in the pension system. The new tier for incoming workers will raise the minimum retirement age to 62 … instead of 55 … and demand higher retirement contributions from workers.

Education advocates say the true reduction in school aid is $2.5 billion.

School aid was to increase by that sum in 2009 in order to satisfy a landmark court ruling several years ago involving the state's financial commitment to education, they noted.

"The governor's proposal to cut $2.5 billion in committed school funding is the most dramatic cut in education in the history of New York," said Billy Easton, executive director of the Alliance for Quality Education, which was involved in the successful court battle against New York to raise school aid funding. "The effect is going to be devastating on schools. We're going to see higher class sizes and fewer programs for kids at a time when we're supposed to be bringing out school system into the 21st century."

Four minimum-security prison camps will close, none in Western New York. Six youth detention facilities, now underutilized, will shut down, including the Cattaraugus Resident Center and Great Valley Residential Center in Cattaraugus County, as will three youth evening reporting centers, including one in Buffalo.

While state revenue sharing is being held flat for most cities, towns and villages, some localities will see actual aid cutbacks. Buffalo, for instance, will lose $1.3 million with Paterson's proposal to send the city $169 million next year.

The state also plans on New Yorkers send more money to Albany through 100 higher fees, assessments and "tax reforms."

Eliminating the clothing sales tax exemption will cost shoppers $462 million next year, and satellite television and radio users will be slapped with $136 million in new state sales taxes.

It will cost more to buy beer and wine, and new or higher fees will hit doctors, seed dealers, and home purchasers. There will be a new state fee for people writing bad checks, $80 million in higher auto registration and license fees and $48 million by increasing a surcharge on drivers' vehicle insurance policies. The budget raises costs for a marine fishing license as well as a stamp for those fishing for trout and salmon.

Then there is $128 million in fee hikes meant to "discourage illegal or dangerous behavior," such as increasing fines for vehicle repair shops that falsify safety and emissions and $50 million from automated cameras that catch speeders in work zones and certain stretches of state highways. Local governments wanting to hire a public retiree would be charged $200 by the state.

The Paterson budget would raise $105 million by permitting the sale of wine in grocery stores. And he wants New Yorkers to gamble more: the state's Quick Draw lottery game, derided as Crack Draw by gambling opponents, would see restrictions relaxed for the kinds of places the games could be offered as well as the number of hours a day the machines could be run. And racetrack casinos could keep their doors open longer each day.

For cities, towns and villages, the plan keeps flat a state revenue-sharing program, eliminating a scheduled $61 million increase. It is offset by the new pension changes, Wicks law reforms and an expansion of a red light camera system at intersections to help localities raise money.