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N.Y. State Budget Battle Centers Around Medicaid

Lawmakers' fight over what to cut has been prolonged and partisan

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IT The Buttery, a coffee shop near the Capitol in Albany, business is down a sharp 25 percent. Manager Nicholas Thomas says the state employees who eat here are "running scared." Many have already been laid off. Another 3,900 state workers would be let go under the new $30.2 billion budget proposed one week ago by New York Gov. Mario Cuomo.

In nearby Cohoes, officials last week passed a new budget that calls for a 14 percent property tax hike. Cohoes comptroller Michael Gagnon says the aim is to keep services despite a one-third cut in state aid.

One need not look far for evidence of the combined squeeze of the recession and the sometimes desperate efforts of New York state lawmakers to keep their budget - second- largest in the nation - in balance. Even parking tickets in Albany and New York's other large cities now carry a $5 state surcharge.

"It's a bad precedent - the state taxes everything that moves," comments Edward Farrell, executive director of the New York State Conference of Mayors. He says the "cumulative effect" of past budget cuts has been the most difficult to absorb and has driven up property taxes in about 80 percent of all cities and towns.

New York is not the only state grappling with serious budget problems these days. But its expected deficit - close to $5 billion for the next fiscal year - is one of the largest, and the wrangling here over what to cut and what to keep has been unusually partisan and protracted.

Much of the fight has centered on Medicaid, the federal-state health care program for the poor, which is considered particularly generous in New York and is one of the fastest-growing components of the state budget.

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