Paterson Suggests $1b in Cuts ALBANY, NEW YORK (WXXI) - Governor David Paterson has recommended a menu of $1 billion dollars in budget cuts that he says the legislature can choose from when it returns August 19th to address the state's financial problems.

Governor David Paterson, saying it's too close to the beginning of the school year to cut education right now, is instead offering the legislature $505m in health care cuts, as part of a billion dollars in options that he says he wants them to consider. He says he's also open to new ideas, as long as they are "real and recurring", not temporary or "speculative" solutions.

Paterson's suggested cuts include a drop in Medicaid reimbursements for hospitals, reinstating a hospital tax on gross receipts, and eliminating extra payments to make up for inflation. EPIC, the prescription drug program for the elderly is also on the chopping block, and nursing homes would see their aid capped.

The governor is also proposing cuts to local governments, the City University of New York, and to the legislature's cherished member item program, which Paterson suggests should be reduced by 50%.

The governor says he does not expect the legislature to agree to all of these cuts, but he would like them to go along with slightly more than half of the proposals, to trim the budget by another $600 million dollars.

"There will be some pain, we're recognizing that," said Paterson.

Paterson says he expects hospitals and other health care interests to be angry, and the reaction from the major hospital lobby group, the Health Care Association of New York, was one of outrage. The Healthcare Association's President, Dan Sisto, says patients will suffer, and predicts if the cuts go through, insured patients will be charged more for services, and health care insurance premiums will rise to make up for the cuts. Sisto says the governor wants health care to bear too much of the burden.

"We start off talking about a shared sacrifice, we end up being sacrificial lambs," said Sisto.

The governor, who has been on the job for nearly five months, says he intends to shake things up, because, he says, it's necessary for the fiscal health of the state.

"I want to wake up this state to what has been unadressed for a long time," said Paterson, who said deficits, gimmicks and one shots solutions are now "out of control".

A coalition of union groups and many democrats in the legislature have been pushing for an increase in the state income tax on the wealthiest New Yorkers, as an alternative to cuts. Paterson says right now, he's not interested in any new taxes, but did not rule them out at some point in the future, if Wall Street continues on it's downward trend.

"If it gets much worse, we will have to consider taxes," said Paterson, who said he would only raise taxes as a "last resort".

Senate Majority Leader Dean Skelos says he, too, agrees that new taxes must be avoided. But the Senate Leader says he wants to look at reducing Medicaid fraud first, before considering cuts to health care providers. Skelos says he believes collecting sales taxes on cigarettes sold on Indian lands would also help plug the deficit.

Assembly Speaker Sheldon Silver would only say that he would review the proposals in preparation for a special session on the deficit August 19th.














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