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How New York would look if Carl Paladino made his budget cuts

New York Republican gubernatorial candidate Carl Paladino says he expects to remove $14 billion from the state budget over the next two years if elected. Observers say such ambitious plans are hard to deliver.

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At the same time Paladino is cutting Albany down to size, he says he will shop the state’s revenues by lowering income taxes by 10 percent and eliminating corporate franchise and capital gains taxes.

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But, can it actually be done?

“The devil is in the details,” replies Blair Horner, the Albany-based legislative director of the New York Public Interest Research Group (NYPIRG). “It’s easy to promise, it’s hard to do.”

Making it even more difficult for the next governor of the Empire State is that whoever is living in the governor’s mansion in 2011 will begin the term with a projected budget deficit of $8.1 billion.

“By February 1, one month after being sworn in, the governor will have to produce a budget that says how he’s going to close that gap,” says Ms. Lynam.

It won’t be easy because even though the state barely balanced its budget in the latest fiscal year, it also increased spending by 20 percent for the next one.

Paladino says one way he will narrow the budget gap is by reducing “waste and abuse,” which he maintains is rife because of the “layers and layers of political fat” built into state agencies.

However, as NYPIRG's Mr. Horner notes, the really big money in the budget is spent on education and Medicaid, the state health fund for the poor. For example, unless something is done, spending for Medicaid will rise $5.2 billion next year to $12.4 billion, mostly because the state cannot assume it will get federal help in the next year.

Paladino knows all about the Medicaid problem.

“Clearly, our Medicaid costs are out of control,” he says. “It will be a multi-year challenge to unwind this complicated mess.”

To control costs, Paladino says he will “revise” reimbursement rates to providers.

Good luck trying that, says Horner. “The providers don’t think they are getting too much money, and the doctors lobby is a well-financed political operation. The hospitals are one of the political 'King Kongs' and the unions that work in them are formidable.”

Paladino’s other solution is to reduce optional services such as dental and eye care services for senior citizens and the poor. But, Lynam says there is not much money in such optional services. “The list of what we offer is not that much different from California, but the real difference is that they (California) pay their providers next to nothing. We don’t want to do that.”

How the public would react to such cuts in services is not clear.

“If [Paladino] gets elected with a significant majority vote, he will have some political capital to use,” says Horner. “Probably, if he’s elected it means the public wants big cuts in popular programs.”

The last time New York cut its budget and lowered taxes were in the first year of Gov. George Pataki’s administration in 1995. At that time, however, the state was recovering from the 1990-1991 recession, says Horner. “Maybe a new governor comes in and the economy takes off.”