Paterson Will Delay $750 Million Starting on Tuesday, Says It’s the Legislature’s Fault

ALBANY—Today is the day of reckoning.

David Paterson just held a press conference to announce that, as he has threatened for two weeks, the state will delay a portion of payments to localities and school district because it doesn’t have enough cash to make them.

In total, $750 million will be stalled: Paterson said he would withhold 10 percent of $1.5 billion due to schools and $400 million to municipalities on Tuesday. Another $3 billion in property tax relief payments, human service payments to counties and more school funding, due later in December, will be reduced by 19 percent. The reductions will be applied across the board without considering the fiscal reserves of the recipient or how dependent they are on state funding. Paterson said if revenues pick up in January, the funding could be restored.

And he blamed the state legislature, again, for forcing him to do this.

“The reality is that they only temporarily delayed the day of reckoning that has now come today,” Paterson said, noting that legislators have been boasting how they prevented cuts to school funding when they passed a deficit package last week that Paterson did not veto.

“Too many legislators–not all of them–but too many of them have made that choice. This is a situation where there’s been too much discussion about the political consequences about the choices we in government are making and not the real-life consequences that New Yorkers are going to have to make,” Paterson said. “Sometimes, as we have now, we face a situation that’s so bad that all of your choices are difficult. That’s when you have to choose being responsible over being popular.”

“The question is who is going to wake up and face reality, and who is going to keep sleeping on the job,” he said accusingly.

(“Constantly attacking the legislature is easy, but it doesn’t solve people’s problems,” countered Austin Shafran, a spokesman for Democrats who control the State Senate. “New Yorkers don’t want political rancor or self-indulgent theatrics, they want their leaders to work together to get things done.”)

It’s uncertain if the move will withstand an expected legal challenge–which may come from Senate Democrats.

Paterson officials point to this blanket provision, included in the budget bills passed in April, as giving the budget division the power to stall the payments. “No moneys appropriated by this chapter shall be available for payment until a certificate of approval has been issued by the director of the budget, who shall file such certificate with the department of audit and control, the chairperson of the senate finance committee and the chairperson of the assembly ways and means committee.”

The counter-argument is that this certification has already been granted–New York has been spending and taxing pursuant to the budget for eight months–and cannot be treated like a faucet.

“You can all read it,” Paterson said at the press conference, when asked about his legal footing. “It’s right there. It’s there for a reason and the only reason you could actually sue is if there was a sense that the governor was just doing this because he didn’t like some of the programs or she didn’t like some of the programs and was cutting them, ideologically. We cut across the board. We did this in a way that will affect all entities equally, and by doing that we think we are well within the bounds of legal authority.”