In the face of a dimming economy, New York Gov. David Paterson yesterday repeated a call for $800 million of cuts across the board at state agencies.
"Nobody likes cuts, I totally understand that," Paterson said. "That said, there have to be cuts."
The governor made his comments to reporters following his first official meeting with New York City Mayor Michael Bloomberg and their respective staffs since being sworn in as governor Monday. Paterson became governor after former Gov. Eliot Spitzer resigned amid a prostitution scandal.
The state depends on the financial services sector for 20% of its tax revenue and the city gets about 9% from that source. Turmoil in the markets has led both the state and the city to seek spending cuts.
"We both have budgets that are going to be problematic," Bloomberg said. "Everything the city does is important and we can't sit here and say one thing is more important than another. Everybody's going to share the pain in the same sense that everybody shares the rewards."
The state budget is due March 31 and the city budget is due June 30. Spitzer had proposed a $124 billion budget.
New York City has complained that Spitzer's budget shortchanged the city, whereas the state division of budget said that the city would come out ahead overall. Acrimony over state aid to the city seemed to be toned down with Paterson in charge.
"I have enormous confidence that the governor will work with the Legislature and come up with something that will be fair and balanced," Bloomberg said. "It won't give the city everything that it wants, but it will give us a lot, one hopes."
Paterson announced that Bloomberg had had a March 31 deadline for the Legislature to pass a congestion pricing law extended by one week in order to qualify for $354 million of federal funds. Under the proposal, the state's Metropolitan Transportation Authority would use fees from charging drivers in a large portion of Manhattan to back $4.5 billion of bonds for transit projects. Paterson was non-committal.
"The mayor made honestly made a very persuasive argument," Paterson said. "I'm going to take it back to review it myself."
Paterson also indicated he preferred not to raise taxes on millionaires, as the Legislature has proposed, but didn't rule it out because of uncertainties in the state's economy.
