New York Gov. Pataki Moves Swiftly To Erase Spend-and-Spend Policies

THE Empire State will become ``normal'' now that Gov. George Pataki is in Albany.

In rejecting the policies of three-term liberal Democrat Gov. Mario Cuomo, Pataki supporters have a clear-eyed Republican view of ``normal'': lower taxes, the death penalty, and major cuts in social spending.

``We calculated that to cut the state's costs down to the average of the other nine largest states, you would have to cut spending and taxes by $25 billion,'' says David Shaffer, president of the Public Policy Institute, an arm of the conservative Business Council, a lobbying group, in Albany, N.Y.

While the Republican-controlled Congress launches its ``revolution'' in Washington, GOP governors are starting to turn state governments on end. And Governor Pataki may be vying for leader of the pack, moving ahead with plans to cut entitlements, a politically explosive issue that even revolutionaries in Washington are approaching cautiously.

Under Mr. Cuomo, social programs expanded at a rapid pace. ``Under Pataki there is neither the money nor the inclination - the constrast will be stark and fundamental,'' says Jay Severin, a GOP political consultant.

The new governor last week gave New Yorkers an idea of how deep the cuts will be in his first State of the State speech. He promised no increase in the state budget of $34 billion for FY 1996. At the same time, he said he would drop the state's highest tax rate from 7.87 to 7 percent - a cut passed in 1987, but deferred for the last five years. In addition, the governor wants to cut personal taxes by up to 25 percent over the next four years.

To pay for the tax cuts and bridge a projected deficit of $5 billion for FY 1996, the new governor will try to make fundamental changes, especially in the $22 billion Medicaid state budget. In his campaign, the governor proposed sending the poor to managed-care facilities to bring down soaring medical costs. His lieutenant governor, Elizabeth McCaughey, has calculated a $1 billion annual saving is possible.

However, the cutbacks are also likely to affect the elderly as well. The state has 9 percent of the nation's senior citizens, of which 17 percent receive home health-care benefits. This amounts to 37 percent of the money the nation spends on this Medicare option. ``For years New York felt it could spend more, have an activist government and not be hurt by it,'' says Shaffer.

Whether Pataki can get substantive changes through the legislature remains to be seen. The Democrats control the Assembly, while the Republicans control the Senate. However, many of the state's Republicans are ``Rockefeller,'' or liberal Republicans. In one of his first moves in November, Pataki replaced the Senate majority leader with his own choice.

To try to enact his program, Pataki has gone outside the state. His budget chief, Patricia Woodworth, is from Michigan, where she helped Gov. John Engler (R) enact his spending cuts and tax reforms.

However, for the most part the Pataki cabinet is made up of old friends and campaign aides. Most share his conservative outlook.

Pataki has always been conservative. However, his position in the state's political constellation became more firm when he decided to run for the Senate. He had to defeat a fellow Republican, Mary Goodhue, the only Republican woman in the senate. Pataki was supported by Change New York, a conservative group with members such as Ron Lauder, a millionaire businessman. ``They have been very successful,'' says Ms. Goodhue, now practicing law.

While in the state senate, Pataki consistently voted against Medicaid funding for abortions. As a candidate, he hedged his position. Pataki now says he will support Medicaid funding for abortions provided there is some component of education involved. ``I think he's going to have a problem there,'' says Goodhue.

Pataki is not likely to have any problems getting a death penalty passed. Cuomo had vetoed death penalty legislation many times. In fact, Pataki has already asked his staff to begin researching the laws to draft a death penalty that will survive the expected judicial challenges.

The state's Democrats are taking a ``wait-and-see'' attitude. ``He's made a lot of big promises, and we'll just have to wait and see if he can deliver on them,'' says Rep. Charles Schumer (D) of New York.

One of Pataki's neighbors, Hamilton Fish, Jr., who ran unsuccessfully for the Democratic congressional seat, says Pataki has a ``quiet integrity about him.''

If Pataki is successful, he will attract national attention. Although Pataki has never indicated he has ambitions beyond Albany, Fish says, anyone with Pataki's acumen ``is not blind to the historical and prospective relationship between Albany and Washington.''

* Part 1 of this series ran yesterday.

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