Paterson: First Projects Set for Stimulus Aid

ALBANY, N.Y. (AP) - As Gov. David Paterson announced the first public works projects that will be jump-started with federal stimulus money, the swift selection was questioned Monday, and proposals to increase some income taxes got increased attention as more lawmakers realized the stimulus alone won't blunt the state's fiscal crisis.

Assemblyman Richard Brodsky, a Westchester Democrat, said state authorities, state agencies and their regional planning arms have too much say over which communities benefit from the federal aid. As chairman of the chamber's authorities committee, he has investigated poor management and waste in the many public authorities that operate the state Thruway, New York City transit system and other services.

The Paterson administration is working closely with local "municipal planning organizations," which Brodsky called "hybrid authorities" because, like the public authorities, their members are appointed by the governor or other officials.

"These secretive, Soviet-style bureaucracies are emerging as the decision makers that affect communities across the state," Brodsky said. "We're trying to reform them, but in the interim, you have people unknown to the general public making decisions as to what communities should benefit and what communities should not ... I'm not sure we learned how to move smartly."

Paterson said Monday night he would meet with legislative leaders this week to hear their ideas, but he warned that the federal government will stick to its criteria in supporting projects.

"It won't be pork," Paterson said after meeting with the New York Conference of Mayors, saying he wouldn't let New York lose funds by pursuing pork-barrel projects. "We're going to be very careful."

The Paterson administration also has set up a Web site (http://www.economicrecovery.ny.gov/) as part of what it considers a transparent process that includes posting decisions, updates, explanations and ways of submitting proposals. Paterson also has a "stimulus cabinet" of state officials helping local officials spread the federal aid statewide while keeping lawmakers informed.

Democratic Senate Majority Leader Malcolm Smith of Queens congratulated Paterson on the swift action Monday, but he said he will have a training session for lawmakers this week to learn more about how projects are chosen.

"I don't know of anyone who had adequate input," Smith said. "It's a work in progress ... we have an obligation to be involved, and we will be."

Contractors will bid on the initial 11 upstate road, bridge and drainage projects as early as March 5.

"It's use it or lose it," Paterson said. "That's what we'll adhere to sternly."

Paterson and lawmakers warned that New York's worsening fiscal crisis won't be solved by the $24.5 billion in stimulus funds due over the next two years for job creation, tax breaks, and education.

The Senate's Democratic majority released its revenue forecast, which found the state economy has worsened since Paterson's own gloomy forecasts, beginning with his budget proposal in mid-December.

The federal stimulus money "is not going to mitigate as some might think," said Senate Finance Committee Chairman Carl Kruger, a Brooklyn Democrat.

The report is part of setting a revenue figure for the 2009-10 budget that the administration and Legislature can agree on. The budget is due April 1 and includes a projected $14 billion deficit. The current budget is about $120 billion, but Paterson wants cuts despite the federal stimulus money to end years of overspending.

Senate Democrats and much of the Assembly's Democratic majority support raising the income tax rate for wealthier New Yorkers, beginning as low as households making $250,000.

The Assembly Democrats had first sought a "millionaire's tax" to increase the tax rate for New Yorkers making $1 million or more a year, but there is now support for setting the bar at about $250,000, which many consider the top level of the middle class in high-cost areas such as New York City and its suburbs.

Smith said the Senate Democrats will spend three hours in private conference debating competing tax options -- one similar to the Assembly's, one proposed by Deputy Majority Leader Jeff Klein, and the option of not changing income taxes at all.

The debate will be behind closed doors in a private Democratic session. Paterson said he's opposed to income tax increases, saying that taxing richer New Yorkers could drive employers and jobs away. He wants spending cuts "before we ask the public to give up more of their personal income."

Klein, a Bronx Democrat, wants to increase the tax rate for individuals making more than $250,000 a year, raise it higher for those making $1 million, and still higher for those making $3 million or more. His proposal would also double the standard deduction for everyone making less than $250,000 a year.

"New York state must learn to live within its means," said Assemblyman James Hayes, an Erie County Republican. "One thing is for sure: High taxes kill jobs."

On the Net: http://www.state.ny.us/governor/index.html