NY Gov targets clean energy, health despite deficit

By Joan Gralla

NEW YORK (Reuters) - New York state should fight obesity, help more residents get health insurance and revive the upstate economy with a research consortium for hybrid car batteries and energy storage, Governor David Paterson proposed on Wednesday.

In his State of the State annual address, the Democrat said that despite what he called the worst economic crisis since the Depression, "This is no time for fear. This is a time for action and a time for courage," he said, citing a 19th century poem, Opportunity, by Edward Rowland Sill as an inspiration.

New York's budget problems are among the most severe in the nation, partly because Wall Street's losses have deprived the state of a rich source of tax dollars.

If the U.S. government does not crack down on hedge funds and the like, Paterson warned he would enact "sensible policies" to protect investors, but offered no details.

Despite a $15.4 billion, 14-month deficit, Paterson recommended creating a $350 million fund to lend money to hard-pressed college students, which would partly be paid for with tax-exempt debt sold by the state mortgage agency.

Eager to curb obesity, which affects one in four New Yorkers below the age of 18, Paterson echoed Mayor Michael Bloomberg by calling for a ban on trans fats in restaurants and requiring chains to list the calories in their offerings.

Paterson also proposed banning schools from serving junk food. Obesity costs the state $6 billion a year in health care costs.

Building on clean energy initiatives begun by former governors, Paterson set a goal of having the state draw 45 percent of its electricity from renewable energy by 2015. This program could create 50,000 jobs, Paterson estimated.

Upstate New York, which has lost jobs and residents for decades, would be the center of a new research consortium focused on batteries for hybrid vehicles and energy storage.

Other green initiatives included cleaning up the Hudson River to "try to make it look like it did" when explorer Henry Hudson discovered it 400 years ago, Paterson said.

The governor's new health-care initiatives included requiring employers to cover their workers' dependents up to the age of 29. The workers would foot the bill but the company's plan would cost less than individual policies.

Children make up about half of the 2.5 million New Yorkers who lack health benefits, and Paterson would enroll more of them in Medicaid, a state-federal plan, and Child Health Plus, a state plan. This would be accomplished partly by abolishing some current barriers, including requirements for asset tests, finger prints and face-to-face interviews to win admission.

"We realize that very often a downturn in the economy is accompanied by an uptick in crime," Paterson said, saying he would expand programs mirrored on New York City's use of statistics to deploy police officers to more regions.

Saying the 2004 reforms of the Rockefeller Drug laws did not go nearly far enough, Paterson called for more treatment for addicts and a separate way of penalizing criminals.

For the first time, Paterson threw his full support behind plans to add tolls to New York City's East River bridges, which now are free, and charge area employers a new payroll tax, steps he says will help stave off steep fare and toll hikes.