Haven’t we been saying this for ever? What will it take to get us back on track in this state? A complete overhaul in the legislature. Remember, it’s election year.

Paterson’s Budget Director Predicts Gloomy Future

ALBANY, NEW YORK Governor Paterson’s budget director, Laura Anglin released what she said was her “gloom picture” of the state’s finances, with a projected deficit of $21.5 billion dollars in the next few years, if state policies are not changed.

She says the current spending rate, at over 10%, is “unsustainable” , when revenue is only growing by 2.7%, and she says Governor Paterson has ordered her department to reign in expenses.

Anglin says in the past, looming projected budget gaps never materialized because the economy was soaring, and tax collections and other revenues poured in at higher than expected rates. The budget director, who believes the state is headed for a “severe”, though short-lived recession, says the money is not going to appear to bail the state out this time around.

She says lay offs in the financial, insurance and real estate industry are nearly as large as they were after September 11, 2001. She says the state has seen a decline of $1.5 billion dollars in revenue from two major areas; much lower Wall Street bonuses and decreased capital gains profits.

Governor Paterson has ordered Anglin to seek out spending reductions before looking at any other options, at a time when the average state resident is cutting back.

“The typical New Yorker is tightening their belts,” said Anglin. “The state needs to do the same thing.”

Anglin won’t rule out closing the gap by using one-time revenue raisers, also known to critics as one -shots. She did not discuss the possibility of raising taxes, something the governor has said he is against.

Governor Paterson, commenting on the report the day before it was released, said he was amazed at how deeply New York had sunk into financial troubles.

“We have to bring some fiscal reality to this state, and sometimes I wonder what’s been going on around here,” Paterson said. “We are deep in debt.”

E.J. McMahon, with the conservative think tank The Empire Center, says he’s encouraged that the new governor seems to be seriously pursuing spending reductions, but he says Paterson, who served for years in the State Senate, should know intimately the core of the problem.

“I guess one way to discover the root causes is to set up a gigantic mirror in the Empire State Plaza, and have everybody who works in the State Capitol look in it,” McMahon said. “Because the root causes are homegrown.”

McMahon says the current budget, which was approved on April 9th with a 5% increase in spending from last year, has made the situation even worse.

Paterson says many of the agreements on spending had already been settled before he took office, just two weeks before the budget deadline. He points out that he did achieve some savings, and for the first time in a decade, the enacted budget will spend less than the proposed budget.

“The budget that we passed will get us through this year,” Paterson said.

Budget director Anglin agrees. She says the economy was healthy through the first half of 2007, and tax collections have come in higher than expected. That should avert a mid year financial crisis, but she says next year will be a different story.