ALBANY - If you thought 2009 was ugly in the state legislature, buckle up for 2010.
With a $3.2 billion shortfall looming and political battles erupting over the budget, 2009 was a troubled year for a financially strapped New York State. And if New Yorkers expect things to get any better when 2010 arrives, they should think again.
No doubt, there's trouble ahead.
State politics will ring in the New Year with a flurry of lawsuits from school districts and special interest groups who claim Gov. David Paterson broke the law when he unilaterally froze and slashed state aid payments in December.
Governor's spokesman Morgan Hook said Wednesday that with the spring state budget season on the horizon, the non-stop strife that has racked the state isn't likely to end anytime soon.
He said that he expects formidable battles over state spending reductions, necessary to balance the budget, to continue well into 2010 and beyond.
"The bulk of the state's spending is in education and health care," Hook said. "We are going to have to make cuts and the bulk of those cuts are going to have to come from those areas."
Paterson is targeting the two largest state expenses, school aid and Medicaid, for cuts in an attempt to close a huge budget gap, Hook said. The state Office of the Budget expects the gap to be between $7 and $9 billion in 201-2011, he said. This is more than double the sum that nearly brought the state to its knees in 2009-2010.
Last fall, Paterson had called for nearly $500 million in mid-year school aid reductions, but couldn't get them enacted as state legislators considered the move political suicide.
State Budget Office spokesman Matt Anderson said Wednesday that the state will distribute $49.2 billion in Medicaid reimbursements and $21.9 billion in school aid in 2009 -2010. And without some form of fundamental change, these figures will only continue to skyrocket.
Paterson will deliver the annual State of the State address Jan. 6 and his office will release the Executive Budget for legislative scrutiny two weeks later.
Hook warned that the situation is likely to deteriorate, especially in fiscal year 2011-2012 when federal stimulus money dries up.
"In the New Year, the story isn't going to change - the problems haven't gone away," Hook said, predicting that in 2011-2012, the financial imbalances are likely to get even worse.
Hook said that Paterson wants to implement an open-ended 4 percent cap on increases in state spending. He has also proposed a cap on state property taxes, which in essence would limit the amount of cash the state will have on hand.
State Now In Cash Crunch
According to state Comptroller Thomas DiNapoli, as of Dec. 30, New York has $3.3 billion in available cash, but has $3.5 billion in bills to pay by Jan. 4.
The situation is so bad, DiNapoli said Wednesday, that his agency is using the state's petty cash fund to simply survive December.
According to Jason Koppel, spokesman for Democratic state Senate Finance Committee Chairman Carl Kruger, legislators are in a holding pattern until Paterson releases the Executive Budget.
Nonetheless, alternative ideas to closing the gap without gutting the programs that serve the most people are in the works, but specifics are hard to come by.
"We've already started really looking into some things," Koppel said. "After the State of the State is when everything will get started, but I can't really give out specifics yet."
Local Assemblywoman Teresa Sayward and her fellow Republican legislators, however, were willing Wednesday to suggest some specific ways to cut the state budget fat.
"I would like to see every Assembly member have the same staffing patterns, as they do in Congress," Sayward said. "I have the largest district in the state and I have three employee - we cover this district pretty well. I know of offices who have 15 employees and they cover only a few city blocks."
Also, Sayward said she would like to see a cost-benefit analysis conducted of the state's property holdings.
She notes that the state owns over 100 golf courses, which represent yet another expense that is not an essential government service. The annual expense to maintain these golf courses, primarily located in the lower Hudson Valley, is more than $50 million, she said.
Across-the-board consolidation of state agencies is another G.O.P.-backed concept that could payroll and medical insurance and pension costs.
Republicans are also calling for mandated county social programs to be made optional, which could reduce Medicaid expenses while simultaneously allowing local governments to choose the services that best fit their communities.
But regardless of party or position, another year of intense disagreements, frustrating stalemates and political strife is expected.