Governor Set To Whack Spending

Spending cuts, not new taxes.

That's Democratic Gov. David Paterson's prescription for closing New York's record $12.5 billion state budget gap.

"Spending cuts are the only ones we can achieve right now," Paterson told the Advance at the St. George Ferry Terminal, where he campaigned with Democratic congressional candidate Michael McMahon yesterday.

It was Paterson's first trip to Staten Island since becoming governor earlier this year.

Paterson arrived here from Washington, D.C., where he testified before the House Ways and Means Committee on Congress' new economic stimulus package.

"We can't tax anybody," Paterson told the Advance. "People are paying too much in property taxes, higher costs for food and for energy, and, of course, gasoline at the pump."

Paterson said that while state revenues have "dropped off the cliff," spending "was always too high."

"What we're going to have to do is take a realistic look at spending," he said. "We're going to have to really start cutting it."

Given the record deficit, Paterson said that nothing is off the table when it comes to spending cuts.

"Anybody who thinks they could take anything off the table is being irresponsible," he said. "And I'll be there to remind them if they do."

Speaking later to more than 500 people at the borough Democratic Party's dinner in the Vanderbilt, South Beach, Paterson said that special-interest concerns would not stand in the way of the budget-cutting.

"I don't care what special interests there are," he said. "Cuts will be made fairly, and they will be made all over."

Paterson said the federal government should return more of New York's tax dollars to the state in aid. He said the state got back $89.6 billion less than it sent to Washington this year.

"We're not in Washington asking for a handout like AIG and Bear Stearns," Paterson said. "We're only asking for a hand back."

Borough lawmakers agreed with Paterson's assessment.

"You can't tax your way out of this," said Assemblyman Michael Cusick (D-Mid-Island), the senior member of the borough's Albany delegation. "We have to figure out where we can cut with a minimal amount of pain."

State Sen. Diane Savino (D-North Shore/Brooklyn) said the state should look at a mix of spending cuts and taxes, including a return of the stock-transfer surcharge, under which New York would get a half-penny for every stock trade made.

When asked how the flagging financial industry, which is based in New York, might react, Ms. Savino said, "The business community just got a $700 billion bailout from the federal government. The middle class hasn't."

Campaigning earlier, Paterson said McMahon would help ensure that federal bailout money goes to homeowners, consumers and others who are having trouble getting credit.

"I think the House of Representatives is a natural progression for a very hardworking person who cares about his neighborhood," Paterson said.

McMahon applauded Paterson for reminding Washington lawmakers that state and local governments are going to be "hard hit" by the economic downturn.

He also thanked Paterson for stumping with him.

"Having him come out here today, to our district, as a champion for me and our campaign," McMahon said, "means an awful lot to me."

"I think the governor is doing a great job," said St. George resident Karen McWatt, who talked with Paterson at the ferry terminal. "I think he has a challenge, but he is trying, and I think he's going to get there."