ALBANY — Gov. Paterson today will hold lawmakers’ feet to the fire when he unveils $2.5 billion in budget cuts needed to keep the state government from running out of cash.
“I’m going to try to show some leadership here,” Paterson told The Post.
The governor will tell lawmakers that if they don’t like his budget-slimming plan, they need to come up with their own — now.
For weeks, spend-happy legislators have resisted Paterson’s calls to come up with their own cuts — culminating yesterday in a fruitless meeting between top legislative staffers and Budget Director Robert Megna.
But now, Paterson and state Comptroller Thomas DiNapoli are warning that if no action is taken quickly, the fiscal crisis could spin out of control. “If we stay on the current path, New York will run out of cash,” DiNapoli said.
The mid-fiscal-year spending reductions proposed by the governor will throw the budgets of schools, hospitals and communities into turmoil and raise the specter of large-scale layoffs, The Post has learned.
The governor’s plan will include a rare $480 million midyear cut to school aid, according to one source who had spoken directly to budget officials. Such a reduction would likely mean a nearly $200 million hit to New York City’s education budget, since the city accounts for some 40 percent of state school spending.
The governor will also call for slashing $400 million in health care spending, the source said. The cuts would come mostly from Medicaid, including aid to hospitals and nursing homes, and would represent the third reduction in health care spending in the last 14 months.
The balance of the $2.5 billion plan would include a 10 percent reduction to money left unspent as of Nov. 1 and sweeps of various pots of money squirreled away over the years by agencies and lawmakers.
Even as Paterson prepared his doomsday budget plans, DiNapoli warned New York’s budget gap could grow as wide as $4.1 billion by year’s end — $600 million more than the governor’s recent estimate.
DiNapoli said the $132 billion budget inked by Paterson and lawmakers six months ago “simply has not held together” in the face of continued job losses and lower-than-expected revenues from a tax hike on the rich.
The state may be forced to dip into its savings to pay its monthly bills if state leaders fail to act, the comptroller warned.
“The tough decisions that should have been made in April will now be harder, but they have to be made. We can’t just push this problem off until next year,” DiNapoli added.
Meanwhile, Paterson told The Post he will end weeks of anticipation today and finally detail his plans to slash $2.5 billion in current-year spending.
The proposed cuts — falling largely on schools, hospitals and local governments — would need legislative approval and come on top of a $500 million reduction to agency budgets unilaterally ordered by Paterson last week.
The governor’s proposal would force a showdown with the Legislature and powerful interest groups pushing for more state funding at a time when the governor’s own political future lies in doubt. His job-approval rating has been locked in the basement for months, and many Democrats have already begun anticipating a potential gubernatorial run by Democratic Attorney General Andrew Cuomo.
Assembly Speaker Sheldon Silver (D-Manhattan) shrugged off the gloom-and-doom talk.
“It’s a worse-case scenario,” Silver said. “And with all the economic good news, I do not think we’ll get this large of a decline in revenue.”
DiNapoli said quick action by state leaders could reverse the tide of rising deficits. The comptroller blamed the increase on unrestrained spending growth, job losses and falling tax collections.