NY's Cuomo prepared to shut government over budget fight

Reuters News
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Posted: Mar 23, 2011 2:47 PM

By Dan Wiessner

ALBANY, New York (Reuters) - New York Governor Andrew Cuomo said on Wednesday that he's prepared for a possible government shutdown if the state legislature fails to approve his budget proposals by the April 1 deadline.

Cuomo's $132.5 billion spending plan calls for steep cuts in state spending on education and Medicaid, as well for prison closures upstate. His budget closes a $10 billion gap without raising taxes.

Governors around the United States must close recession-spawned deficits and Cuomo's anti-tax stand contrasts with strategies of other governors of cash-poor states to raise taxes.

"If the legislature fails to pass a budget on time, the government will not have the funds to operate and it may be forced to shut down," Cuomo said in a video posted on his website: http://www.governor.ny.gov/. "As your governor, I will make sure we are prepared for this contingency."

He added, "Even if the legislature causes a shutdown of government, it will only be temporary and it will only delay, not derail, our budget's final passage."

The state Senate and Assembly have proposed modest increases in school aid and have rejected some of the governor's health care proposals. One divisive issue is Cuomo's plan to cap damages for pain and suffering caused by medical malpractice at $250,000.

A consumer group, the Center for Justice and Democracy, which opposes the malpractice cap has recommended an alternative: limiting hospital executives' salaries to a maximum of $250,000 a year to save $213 million a year.

The Democrat-dominated Assembly is also seeking a tax surcharge on state residents who earn more than $1 million per year, which is opposed by Cuomo and the Republicans who lead the Senate.

The governor has said repeatedly in recent weeks he is optimistic an agreement can be reached by April 1, the beginning of the fiscal year, but that in the event of an impasse he is prepared to insert his budget into an emergency "extender" bill. Lawmakers would then be forced to pass his budget or shut down the government.

It was not immediately clear exactly what a shutdown, which would be a first in New York state, would entail. State office buildings and parks would likely be closed and employees may not receive paychecks. But state police would still be on duty and hospitals and prisons would continue to operate.

Spokesmen for Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos were not immediately available for comment.

Cuomo also has called for $450 million of concessions from unionized public employees, and the Civil Service Employees Association on Tuesday said it had begun negotiating a new contract to replace the one that expires on April 1.

Cuomo has said as many as 9,800 workers will have to be laid off if the two sides do not agree on spending cuts. Danny Donohue, president of the CSEA, in a statement said: "Our expectation is to reach an agreement with the state that treats those rank and file workers with fairness and respect."

(Additional reporting by Joan Gralla)