SCHENECTADY, N.Y. -- It was all smiles at Schenectady City Hall, but during Mayor Brian Stratton's first closed door meeting with Governor David Paterson, the news was nothing to smile about.
"The loss of this revenue will be felt and will be felt hard," said Stratton.
Governor Paterson told him his city should expect less help from the state this year. It's part of Paterson's plan to cut two percent of aid to localities as a way to help balance the budget.
"While it's still going to grow, it's growing by seven percent, it's $220,000 less than what we passed a budget for, because we were committed by the state, the state budget office, yes this will be your number, you can take that to the bank. Obviously things have changed," said Stratton.
The clock is ticking on the budget, the details still up in the air, but by all indications the belt will be tightened, even for those who weren't expecting to pinch as many pennies. Our Britt Godshalk has reaction of one local community that is truly feeling the effects of these tough financial times.
"It had to be done because our national economy is reeling," said Governor Paterson.
Fiscal watchdogs are barking at the idea, saying that keeping the money in the pockets of local governments is key to stimulating the state's economy.
"The government, unlike you and I, spend their money on local goods and services, things that are produced within New York," said Trudi Renwick, Senior Economist for the Fiscal Policy Institute.
But they say residents, primarily the rich, do not. So their solution is to raise the income tax on the state's millionaires, which the Assembly Speaker said would pour $1.5 billion into the state's coffers. It's money, economists say, that could help relieve serious financial issues like property tax burden. A recent Quinnipiac Poll shows New Yorkers are on board with the tax - four to one.
"So our hope is that leaders will change their minds," said Ronald Deutsch, the Executive Director of New Yorkers for Fiscal Fairness.
Stratton is instead banking on the past to get his city through the economic future without cutting any specific programs.
"Every indication tells us that 2007 was a strong year, that we'll have enough money to put aside and we'll have to see," Stratton said. "But the governor has told me in no unclear terms that these are tough times."
Right down the the local level.