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Pataki's Budget Uses Reserves to Make Up Lost Revenue

By Mark Scott

Albany, NY – Governor Pataki is proposing an $88.6 billion dollar budget for the state's 2002-03 fiscal year, an increase of 4.7 percent in overall spending from the current year. However, by removing federally-funded programs from the state budget, spending increases by 1.6 percent.

In his budget message Tuesday, Pataki said his practice of using previous budget surpluses to build a reserve fund will pay off in the coming year. He is earmarking $646 million in reserves to help close a revenue gap in the current year's budget. He proposes using another $1.1 billion in 2002-03.

Pataki said New York is still recovering from the September 11th terrorist attacks. He said his budget planners were forced to deal with a $6.8 billion loss in revenue resulting from the attacks and a faltering economy.

Hopes that Buffalo's financially struggling school district would see extra aid were dashed by Pataki's budget. The governor is not recommending an increase in school aid in 2002-03, holding it at the current year's figure of $14.2 billion. The state's largest teachers union says that's the equivalent of a cut and is unacceptable.

There is also no increase for the State University of New York. As expected, he does not recommend an increase in SUNY tuition. State Assembly Majority Leader Paul Tokasz says spending on the state's Tuition Assistance Program would be cut in 2002-2003.

As he mentioned in his State of the State address, Pataki does include $250 million in 2002-03 for the state's Centers of Excellence, including a Center specializing in Bioinformatics in Buffalo.

The governor is calling for the creation of an Empire Opportunity Fund that would eventually provide more than $2 billion for economic development projects upstate. He said revenue from Native American casinos approved for Buffalo, Niagara Falls and the Catskills would be dedicated to the fund. State Assemblyman James Hayes, R-Williamsville, said the Empire Opportunity Fund would be a source of revenue for the city's inner-harbor development and Main-High medical corridor.

Pataki is hoping to stabilize transit systems across New York by setting aside $1.73 billion in new money for them. The Niagara Frontier Transportation Authority would receive nearly $10 million.

Pataki is also recommending that the state move forward with previously approved tax cuts totaling $300 million. They include an expansion of the Earned Income Tax Credit, an increase in the College Tuition Deduction Tax Credit and the continued phase-out of the Gross Receipts Tax on energy.

Pataki said the state's workforce would be cut by 5,000 positions. But he is not recommending layoffs. He's hoping to make the cuts through attrition and early retirement incentives.

The governor proposes spending $138 million on the state's Superfund program. He also is calling for $125 million in new funding for the state's Environmental Protection Fund as well as spending a similar amount from the current year that was approved but never appropriated.

The budget is scheduled to take effect on April 1st. But the state Legislature has failed to approve a spending plan by that deadline since 1984.

Pataki is calling on the Democratic-controlled Assembly and Republican-run Senate to work in a bipartisan manner to adopt a budget. He's hoping last week's successful negotiations on a new health care plan will set the tone for timely approval of a budget.