New York Gov. David Paterson yesterday ordered state agencies to cut $500 million from current-year spending, an 11% across the board reduction. The action is the first concrete move to cut the $2.1 billion gap that opened up in the state’s $131.9 fiscal 2010 budget primarily due to lower than expected personal income tax collections.
“While agencies have already taken significant action to reduce spending since I took office, further cuts are necessary given the state’s persistent fiscal difficulties,” Paterson said in a press release. “These agency spending reductions, however, only represent a first step. I look forward to working cooperatively with the Legislature to enact additional savings and close our current-year deficit.”
On Monday, Paterson said the state’s income-tax revenue has declined by 36% in fiscal 2010 compared to the same period last year.
Paterson targeted higher education for the biggest cuts, with the State University of New York’s spending reduced by $90 million and the City University of New York cut by $53 million. The CUNY cuts require legislative approval. The second largest cut was $69.3 million to the Corrections Department.
A spokesman for Assembly Speaker Sheldon Silver, D-Manhattan, said that conversations were ongoing between Paterson’s office and the Senate to resolve the budget gap.
