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October 30, 2009

State budget deficit expected to hit $44B in five years
Joseph Spector Staff writer ALBANY _ The state’s financial picture continues to get gloomier with projections today that the five-year deficit will balloon by 16 percent from projections just three months ago. Gov. David Paterson’s budget office today is expected to release a mid-year report that shows the state’s deficit will grow to $44 billion over the next five years -- an increase of $6 billion from projections in July. Paterson indicated Thursday that the state’s mid-year budget deficit has grown to $3.2 billion, up from $2.1 billion in July. He has called lawmakers back to Albany on Nov. 10 to close the current year’s deficit. The Democratic governor has proposed cutting aid in education and health-care to close a third of the gap, with the rest coming through proposals for new revenue and sweeps of money from other state accounts. While state leaders grapple with this year’s fiscal woes, the long-term picture appears even worse, largely because the state is relying on federal stimulus to help close current budget gaps. This year’s spending plan, which runs until March 31, uses about $6 billion in federal stimulus aid to help balance the budget. But when the stimulus money runs out in the 2012-13 fiscal year, state deficits are expected to soar, with a two-year deficit of about $34 billion. JSPECTOR@Gannett.com

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10/30/2009 7:49 PM

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