The plans most drastic cuts will hit education and health care. School aid would be decreased by $836 million and Medicaid reimbursements to hospitals would also be substantially reduced.
The plan would allegedly generate $5.2 billion in state funds over the next two years, eliminating the state’s 2008 deficit and securing future payment on the 2009 deficit. Governor Paterson has declined to cut into the City’s $1.2 billion “rainy day fund” or to raise taxes in order to raise state revenues.
“The most effective way to make the state stronger through this crisis and minimize the harm to the economy and vulnerable population is using every means at the state’s disposal, such as excess reserve funds and progressive revenue enhancements,” added James Parrot, Deputy Director & Chief Economist at the Fiscal Policy Institute.
Non-profit groups rallied against the proposed cuts at government office buildings across the state. “We went through this in the 70’s, it was the worst period in