Finance Blog number 1

June 15, 2010

N.Y. lawmakers approve spending plan, avoid government shutdown

Filed under: technology — Tags: , — Sun @ 8:18 pm

New York state legislators have avoided a government shutdown—for now—by enacting another emergency spending plan for the state.

The state has funded bare-bones operations through a series of the one-week plans, which are necessary because the full budget is now 76 days past due. For weeks, negotiations have produced few results.

Legislators passed the 11th straight emergency spending plan on June 14, allotting money needed to keep the lights on through June 20.

The bill’s fate was never in doubt in the Assembly, where Democrats enjoy a wide 107-42 margin. But three Republicans, including two Capital Region legislators, were critical in ensuring the bill passed the Senate.

Rejection of any earlier spending bills would also have led to a government shutdown. But this time, the odds of a shutdown were larger than ever, since at least one Democrat voted against the bill, and others threatened to do so.

Government would have shut down had the bill failed. It would have meant the closure of state agencies, parks and construction projects. State workers, vendors and unemployment benefits would not have been paid, or received IOUs.

A bipartisan vote was necessary because Sen. Ruben Diaz Sr. (D-Bronx) voted against the bill, protesting the cuts it made to welfare and public assistance.

Democrats have just a 32-30 margin in the Senate, and at least 32 votes are needed to pass a bill.

Republican Sens. Hugh Farley (Niskayuna), Roy McDonald (Saratoga) and Charles Fuschillo Jr. (Long Island) voted in favor of the bill.

The final Senate tally was 34-27.

Farley and McDonald faced particular pressure, since thousands of state workers live in their districts.

“Fear was used as a weapon today,” McDonald said on the Senate floor payday loans for bad credit.

Farley said he could not vote to shut down state government, at least this time.

“It enables this dreadful, dreadful budget process to keep going on. It lets this dysfunctional process continue,” Farley said in an interview. “But you can’t shut down state government. That would be a calamity.”

Still, Farley said he likely would not vote for future emergency spending plans if they included new or higher levels of taxes, fees or borrowing.

Sen. John Sampson (D-Brooklyn), the top Democrat in the Senate, thanked the three Republicans for their “courage and leadership.”

By law, Gov. David Paterson authors the emergency spending plans, which court cases have established as all-or-nothing votes for legislators.

This time, Paterson forced legislators to lock in full fiscal year spending on public assistance and welfare programs, including $3.5 billion for the Office of Temporary and Disability Assistance, a slight decrease from the 2009-10 fiscal year.

The state is saving $327 million by cutting support of some welfare-related programs, while also budgeting increased attrition and revenue from audits. There are no tax increases in the bill.

Last week, Paterson used the emergency spending plan to force legislators to establish almost all of the state’s Medicaid budget for the fiscal year, totaling more than $50 billion of spending. Medicaid and school aid, which legislators have not yet voted on, together make up more than half of the state’s annual budget.

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