Gov. David Paterson has called on the state Legislature to reconvene Nov. 18 in Albany to address a $1.2 billion shortfall in the current state budget, which has been fueled by the meltdown on Wall Street.

NYSUT leaders are working to shield public schools, higher education and health care from what would be devastating mid-year cuts.

"Our union is fully aware of the severity of the state's economic crisis and we understand that with limited dollars hard choices will have to be made," said NYSUT President Dick Iannuzzi. "But cuts to our public schools, colleges and health care system would only serve to exacerbate New York's problems, hurting children, working families and communities that depend on these essential services for their personal and economic well-being."

Despite the $1.2 billion deficit projected by the state Division of Budget, Paterson has called on lawmakers to make $2 billion in cuts because he's convinced the state's economic woes will get worse before they get better.

While legislative leaders have said they will work to cut spending, they have also started to push back against Paterson's request for such deep cuts.

Assembly Speaker Sheldon Silver said his focus is on closing the $1.2 billion budget gap rather than extending cuts by another $800 million. Senate Majority Leader Dean Skelos has said there should be no cuts made to the state workforce - including schools, public colleges and health care - especially at a time when New York is expected to lose 40,000 financial-sector jobs as a result of the Wall Street crisis.

Senate Minority Leader Malcolm Smith also has said publicly that he does not support mid-year education cuts.

Though this year's state budget totaled $121 billion when it was passed in April, mid-year cuts will have to come from the $53 billion that remains in the spending plan.

Iannuzzi, who met with Paterson in mid-October to discuss the financial crisis, said NYSUT is committed to working with state leaders to find solutions to New York's economic problems.

NYSUT, for example, has been a strong proponent of a temporary income-tax surcharge on those making more than $1 million a year in order to raise revenue. The union also has advocated for meaningful tax relief through passage of circuit-breaker legislation that would tie property taxes to a household's income.

NYSUT has been pushing policies that would reduce state costs and spark investment, such as bulk prescription drug purchasing and the construction of energy-efficient schools built with the latest technologies developed by New York's public university science, agricultural and technology programs, said NYSUT Executive Vice President Alan Lubin.

The pain caused by the turmoil on Wall Street is greater in New York than any state in the nation because its financial-services sector accounts for 20 percent of New York's overall tax revenue. In fact, a $6.4 billion deficit estimated for the next state fiscal year beginning April 1 has now grown to $9 billion since the crisis and could even soar higher, according to projections by state Comptroller Thomas DiNapoli.

Even before the latest trouble on Wall Street, a struggling national economy wreaked havoc on state finances this year. Paterson was forced to curb spending by $1.8 billion through agency reductions and hiring freezes to cope with a budget shortfall. State lawmakers, meanwhile, reconvened at the Capitol in August to slash $427 million from this year's budget.

"The budget cuts made so far are already having a harmful impact on our SUNY and CUNY systems," which have seen reductions of $277 million this year, Lubin said. "To simply return to make another $2 billion in cuts in this fiscal year while pledging not to raise taxes is not only short-sighted, but threatens the state's future."

- Matt Smith