N.Y. Senate Approves $4.6B Emergency Spending Bills

The New York Senate yesterday passed emergency spending bills to keep the government running as it appears inevitable the state will not have a new budget approved in time for the start of the new fiscal year on Thursday.

Gov. David Paterson introduced the bills that provide for $4.6 billion of spending to keep the state operating through April 11. The Assembly passed the measures on Friday.

Though the Legislature adjourned for the Passover and Easter holidays this week, talks will continue over how to close the state’s projected $9.2 billion fiscal 2011 budget deficit.

“Discussions are ongoing,” said Dan Weiler, spokesman for Assembly Speaker Sheldon Silver, D-Manhattan. He would not be more specific.

Both houses of the Legislature have sought in their budget work to reduce some of the cuts to health care, education and local governments in Paterson’s $135.28 billion budget proposal.

Senate Democratic Majority Conference Leader John Sampson plans to meet with Lieut. Gov. Richard Ravitch tomorrow to discuss Ravitch’s proposal to borrow up to $2 billion on the state’s personal income-tax credit every year for three years during a transition to generally accepted accounting practices budgeting.

Sampson told reporters in Albany that deeper cuts were under discussion.

The Assembly last week proposed a plan similar to Ravitch’s that includes deficit borrowing and the creation of a financial oversight board.

The Senate last week proposed refinancing the state’s tobacco bonds and extending maturities to raise $700 million today.

Details of the proposal remain murky. Since 2003, the state has issued approximately $4 billion of bonds through the New York Tobacco Settlement Financial Corp. The restructuring would stretch repayment of the debt over a longer period of time.

“The Senate proposal, which would refund the tobacco borrowing, is the worst of the choices,” said Charles Brecher, vice president and research director at the Citizens Budget Commission, a business-oriented fiscal watchdog organization. “It’s borrowing without the discipline attached to the Ravitch proposal, in terms of a review board, and it’s probably a more expensive way to borrow than using PIT-backed bonds.”

The Assembly is scheduled to resume its session on April 7 but Weiler said the Assembly is available to return to session sooner if called upon by the speaker.

Last week Paterson signed an appropriations bill to fund the state’s debt service even absent a budget.

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New York
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