Paterson Thinks the Budget Deficit Will Grow by $3 Billion

ALBANY—David Paterson said he is anticipating the state’s current budget will fall out of balance by $3 billion this fiscal year, adding to an already projected $2.5 billion deficit that must be bridged by April 1 of next year.

It’s unclear whether Paterson and legislative leaders–who stood beside him at a bill signing ceremony just now–will address the shortfall before next year’s deadline. Paterson said he is planning on closing a roughly $6 billion shortfall by then.

“I took the amount of the budget overflow from 2008-2009,” he said “which was about $3 billion total, and added it onto next year’s budget deficit to give myself about $5.5 billion. And I rounded that to $6 billion, just give myself a sense of where I’m going to have to lead the legislature in terms of a reduction plan.”

Paterson’s forecast is underscored by a comptroller’s report released yesterday, which found hat revenues are falling short of their expected targets.

“I am planning for the possibility, which I think is a probability–so I guess I’m the eternal pessimist, and that’s why last July when it started going that way I insisted that legislature come in, in August, and you remember what we tried to do after we bridged that gap was to put a surplus, but the market fell and the recession took hold and the recession just blew it away, and we wound up having to close a $3 billion worth of debt–so I figure that 2009 is going to be as difficult a financial year as 2008 was.”

Asked by Fred Dicker why this imbalance wasn’t addressed in the process that came, Paterson replied that the intent was to build a “cushion” into the budget on top of a $13 billion deficit, but that when “another reading” on the eve of the budget’s adoption showed the deficit had increased further, it became impossible to do so.

UPDATE: Around 4:45 p.m., I got a call from Jeffrey Gordon, a spokesman for the Division of the Budget.

“The governor didn’t really say that he anticipated the budget falling out of balance this year,” he said. “What he said was that we’re not projecting a deficit this year; he’s just saying that given the declines we saw last year, he was expressing his concerns about potential risks to the financial plan in the current uncertain economic environment. He’s not projecting a deficit this year.”

Paterson Thinks the Budget Deficit Will Grow by $3 Billion