New York Gov. David Paterson yesterday announced the creation of a program to eliminate the state's budget gap that would enable the governor to set budget-cutting targets for state agencies during the year.
Division of Budget spokesman Matt Anderson said the move was an administrative action that did not require legislative action. Some cuts could still require legislative approval, he said.
"Our revenues are falling off a cliff," Paterson told reporters at a news conference in Albany, referring to tax revenues from the state's 20 largest taxpayers, whose tax remittances in the first quarter of 2008 fell to $72 million, compared to $533 million in the same period last year. .
The governor's office projects a $5 billion gap in fiscal 2010 that would rise to $8.8 billion by fiscal 2012.
"That is a formidable challenge to the state," Patterson said. "There's no legislation that should be passed, there's no law that should be proposed, and there should be no action we take that does not first look at fiscal impact."
Under the program to eliminate the gap, the governor can issue spending reduction targets at any time to address current or future deficits. Agencies would have one month to come up with a savings plan that would have to be approved by the Division of Budget. Agencies' savings plans would be posted on the division's Web site, as would be quarterly results of how they have met cost-cutting targets.
The program will be monitored by an oversight board composed of secretary to the governor Charles J. O'Byrne, budget director Laura Anglin, and director of state operations Paul Francis. The board will have to power to institute hiring freezes or withhold funding from agencies that are not in compliance with their reduction targets.
Earlier this year, Paterson called for an across-the-board, 3.35% cut from state agencies.
The program is modeled after New York City's program to eliminate the gap that was begun during the city's fiscal crisis in the 1970s.
