Pataki outlines $12 billion budget problem

Wednesday January 22, 2003

NEW YORK (AP) The state is facing a budget gap of at least $12 billion, and can't tax its way out of the problem, Gov. George Pataki said Wednesday.

``We face a fiscal crisis today of a magnitude we have not confronted in our lifetime,'' the governor told the Association for a Better New York at the Waldorf-Astoria hotel in Manhattan.

The speech marked the first time Pataki put a specific number $10 billion on how large a budget problem he and the state Legislature are facing for the fiscal year that begins April 1. That is in addition to a $2 billion
gap expected to be carried over from the current fiscal year.

To put that into perspective, the entire state budget for the current fiscal year is worth almost $90 billion.

Pataki reiterated his vow that the revenue shortfall would not be dealt with through the imposition of ``job-killing taxes.''

Pataki has said New York's budget woes, mirroring those of many states across the country, have been caused by the downturn in the national economy coupled with the terrorist attacks of Sept. 11, 2001.

``Other states will propose massive tax increases. California is looking to solve its problems in part with more than an $8 billion tax hike,'' Pataki said. ``We will not be making that mistake.''

Critics of the Pataki administration have said New York's problems have been made worse by the governor's past approval of hefty spending increases even while the state cut taxes.

With New York City facing a multi-billion dollar budget gap of its own, Pataki also announced that the Port Authority of New York and New Jersey will provide the city with more than $500 million in extra revenue from
the authority's leases on John F. Kennedy International and LaGuardia airports.

``As we work to meet the serious challenges facing the state, I recognize that this city, as well as other governments across the state, will be looking to Albany for help,'' the governor said.

Pataki's speech is the first of three he is delivering as he prepares New Yorkers for the unveiling on Jan. 29 of his 2003-04 budget proposal. The spending plan is expected to be heavy on program cuts and fee increases.

Just last week, the Pataki-controlled board of trustees for the State University of New York proposed raising SUNY undergraduate tuition by $1,400 annually, to $4,800 a year. If approved by the governor and the
Legislature, the tuition hike would be the first since 1995 when Pataki took office and had to close a budget gap he pegged at $5 billion. The tuition increase would take effect in September.

``I recognize what we have to do will be extremely difficult,'' Pataki said Wednesday. ``It will require cuts in some of our most precious programs and projects, many of which I have personally championed. But we
can either cut these programs today and allow for the growth that will fuel them tomorrow, or subject New Yorkers to job losses and a fiscal crisis for years to come.''

Pataki said his budget plan will include ``steps to give New Yorkers a smaller, smarter and more streamlined government.''

The governor asked others not to turn the debate over dealing with the budget problems into a battle that would ``pit one class of people against another'' and ``one locality against another.''