NY’s Cuomo prepared to shut government over budget fight

By Dan Wiessner

ALBANY, New York (Reuters) – New York Governor Andrew Cuomo said on Wednesday he is prepared for a possible government shutdown if the state legislature fails to approve his budget proposals by the April 1 deadline.

Cuomo’s $132.5 billion spending plan calls for steep cuts in state spending on education and Medicaid, as well as prison closures. His budget closes a $10 billion gap without raising taxes.

Governors around the United States face recession-spawned deficits, and Cuomo’s anti-tax stand contrasts with strategies of governors of other cash-poor states, such as California and Connecticut, to raise taxes.

“If the legislature fails to pass a budget on time, the government will not have the funds to operate and it may be forced to shut down,” Cuomo said in a video posted on his website: http://www.governor.ny.gov/. “As your governor, I will make sure we are prepared for this contingency.”

He added: “Even if the legislature causes a shutdown of government, it will only be temporary and it will only delay, not derail, our budget’s final passage.”

Signaling that Cuomo likely would propose temporary spending measures to keep essential services open, Morris Peters, a spokesman for the state Division of Budget, said: “There’s never been a complete or total shutdown (in New York); nor would there be in this situation.”

The state Senate and Assembly have proposed modest increases in school aid and have rejected some of the governor’s health care proposals. One divisive issue is Cuomo’s plan to cap damages for pain and suffering caused by medical malpractice at $250,000.

A consumer group, the Center for Justice and Democracy, which opposes the malpractice cap, has recommended an alternative: limiting hospital executives’ salaries to a maximum of $250,000 a year, to save $213 million annually.

The Democrat-dominated Assembly is also seeking a tax surcharge on state residents who earn more than $1 million, which is opposed by Cuomo and the Republicans who lead the Senate.

The governor has said repeatedly in recent weeks he is optimistic an agreement can be reached by April 1, the beginning of the fiscal year. If there is an impasse, Cuomo has said he is prepared to insert his budget in an emergency “extender” bill, which lawmakers would be forced to pass or shut down the government.

It was not immediately clear exactly what a shutdown would entail. State office buildings and parks would likely be closed and employees may not receive paychecks. Residents might not, for example, be able to collect unemployment checks or renew drivers licenses. But state police would remain on duty and hospitals and prisons would continue to operate.

Spokesmen for Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos were not immediately available.

Cuomo also has called for $450 million of concessions from unionized public employees. The Civil Service Employees Association said on Tuesday it had begun negotiating a new contract to replace the one that expires on April 1.

Cuomo has said as many as 9,800 workers will have to be laid off if the two sides do not agree on spending cuts.

(Additional reporting by Joan Gralla; Editing by Andrew Hay and Dan Grebler)

NY’s Cuomo prepared to shut government over budget fight