N.Y. governor seeks one-time authority to balance budget

New York Governor David Paterson is seen before a televised address from the Red Room at the state capitol in Albany, New York July 8, 2009.

NEW YORK (Reuters) - New York Governor David Paterson on Tuesday submitted emergency legislation that would grant him the one-time authority to balance the state budget without approval from the legislature.

Paterson, frustrated by a seven-week standoff with lawmakers on measures to close a $3.2 billion deficit, said he will make the cuts needed to balance the budget, preserve the state's credit rating and keep New York afloat.

"The people of New York have waited too long," he told lawmakers in webcast comments. "Cut this budget with me, or I will do it myself."

Although New York Senate Republicans initially had said they would respond to the governor from the Senate floor later in the day, both Republican and Democratic caucuses later left town and said they would not be back until Monday. The legislature would need to approve the bill.

Assembly Speaker Sheldon Silver criticized Paterson's plan.

"How can an unelected governor direct 212 elected legislators?" he told reporters in Albany. "Give an appointed budget director the power to pass a budget."

Paterson, who had been lieutenant governor, was sworn in as governor in March 2008 following the resignation of Eliot Spitzer after a prostitution scandal.

Under the emergency legislation, payments would be cut across the board to bring the budget back into balance, Paterson said.

He said that if the legislature also approves a tax amnesty program, fund transfers and other non spending cut-related measures in his deficit reduction plan, a full $1.3 billion in spending cuts could be enacted.

New York's cash crisis threatens the credibility of the state and cannot be remedied with nonrecurring measures, Paterson said.

The state is due to pay $3.6 billion of bills in December. Moody's Investors Service said last week the state is facing a severe cash crunch and may even suffer a credit rating downgrade.

Unless action is taken, the state will run out of money even after delaying payments to schools and local governments, Paterson said.

He criticized lawmakers for being unwilling to acknowledge the depth of the crisis or to make the choices needed to address it.

Lawmakers from both parties have resisted his deficit reduction plan, which proposes mid-year cuts to aid for public schools as well as cuts to health care spending.

"If the legislature is unwilling to make cuts, I will. If it is unwilling to endure the criticism, I will," Paterson said.

Paterson also said he would modify his deficit reduction plan to reduce the amount to be cut from school aid and health care.

He also proposed authorizing the Battery Park City Authority to contribute $200 million to the state's general fund and use its bonds to cover a new $100 million affordable housing program for the city of New York.

(Reporting by Ciara Linnane; Editing by Padraic Cassidy and Leslie Adler)