Governor David A. Paterson today announced a comprehensive, two-year $5.2 billion deficit reduction plan that will entirely eliminate the State�s $1.5 billion current-year shortfall, protect against further declines in revenue in a volatile economic climate, and make a substantial down payment on next year’s deficit.

Governor Paterson�s proposed reductions are spread across virtually every area of State spending, including education, health care, human services, the State workforce, and others. These actions would produce $2 billion of savings in 2008-09 and $3.2 billion in 2009-10.

�The deficit reduction plan I have put forward today represents a series of difficult choices across virtually every area of State spending,� said Governor Paterson. �The only way we are going to overcome this unprecedented crisis is through shared sacrifice. I look forward to engaging in a productive dialogue with the Legislature about the actions we must take at next week�s special session to address our State�s record budget deficits.�

Governor Paterson�s plan would close the State�s $1.5 billion current-year shortfall, while also providing a $548 million cushion against additional declines in revenue during 2008-09. These proposed actions would also reduce the State’s 2009-10 deficit from $12.5 billion to $8.8 billion and four-year budget deficit by from $47.0 billion to $35.9 billion.

After implementing Governor Paterson�s deficit reduction plan, 2008-09 All Funds spending would still total $119.2 billion, an increase of $3.1 billion or 2.7 percent over the previous year. State Operating Funds spending would total $77.0 billion, an increase of $1.9 billion or 2.5 percent. Inflation is currently projected to be 4.2 percent for 2008-09.