Paterson: Layoffs loom if state's deficit isn't reduced

ALBANY -- Lawmakers enjoyed the day off Friday as Governor David Paterson warned of a pending disaster looming over the state: New York will run out of money in December when a huge chunk of the $3.2 billion deficit is due.

If lawmakers don't act now on a deficit reduction plan, then tough actions will have to be made: "Furloughs, layoffs, borrowing, downgraded credit rating, delayed payment to schools, delayed payments to local governments, delayed payments to service providers, delayed payments to workforce," Gov. Paterson said, listing the measures. "I've been telling you what's been happening in other states. That's what we're going to have to do: All of the above."

While the fiscal year ends on March 31, $1.2 billion of the $3.2 billion deficit is due during the third week in December.

But over in the Republican and Democratic quarters at the Capitol, neither side seemed worried despite the Governor's statements. 

"There are 212 legislators," said Travis Proulx, Senate Majority Leader spokesperson. "I don't think there's a single one of them that doesn't understand the severity of the fiscal crisis we're in.... We're hopeful we'll return at 10 a.m. Monday morning and pass a three-way agreed upon deficit reduction plan and that's the reason we're not in session [today] because of the progress being made." 

Governor David Paterson says 55 percent of the spending pie comes from education and health care and he doesn't believe legislators will make the necessary cuts in those areas to make the deficit reduction happen. 

Proulx says at this point they can't say where the cuts will come from in this proposed plan but does admit that likely cuts will come from the health care field.

If a deficit reduction plan deal is struck, Governor Paterson says everyone will stay through the holidays so they can put it into law as soon as possible.