The economy's flagging, consumer credit is tight, investments are in the basement, and the cost of gasoline and almost everything else is out of sight. What's a state to do?

Like its residents, New York is facing some serious financial issues in the coming year, and must look at ways to rein in spending. Candidates seeking office next month, discussed just how they would work to address this crisis, and where, specifically, they would cut costs, if necessary, to bridge a widening gap between revenue and spending.

For his part, Sen. Charles Fuschillo, (R- 8th District) supported a cap on state spending of 4 percent, which will reduce spending by $2.8 billion in the next fiscal year. "This would also increase accountability to prevent the kind of fiscal challenges we are dealing with now," he said.

One way the state can make up some of that loss is to look at its Medicaid program, said Fuschillo. "Massive fraud exists in the system and we have to work to eliminate it," he said, adding that he would not look to reduce spending in education, infrastructure or health-care services.

His opponent, Carol Gordon of Massapequa, offered no specifics on where she would cut spending, but said that she would fight for transparency in government and to reduce administrative costs and member items, which she called "excessive."

But the problem is not likely to be resolved simply by cracking down on Medicaid fraud or eliminating pork. The state is expecting a $1.2 billion budget gap this year and the continuing slump on Wall Street only places pressure on that figure. In fact, lawmakers elected Nov. 4 will be back in session Nov. 18, and asked by Gov. David Paterson to come up with $2 billion in spending cuts. Paterson projects the deficit next year to grow even larger than the $5.4 billion announced in August. "We can't wait for the numbers to be there before planning spending cuts," he told the legislature.

"It's time for the state to focus on how we can be more efficient in governing and hold administrative and oversight agencies accountable for making every dollar count," said Karen Kerr-Ozimek who is running for the Assembly against Republican incumbent Andrew Raia in the 9th Assembly District. She supports programs that stimulate private business growth and the reevaluation of programs like the Empire Zone, which brings tax breaks to business. "As a state, we provide more than $600 million in tax breaks under this program in return for 'showing job growth,' but no one is minding the store," she said. "It's time for Albany to put principles above politics and allow wasteful programs to be cut," she said.

Raia said Albany needs to ensure future job growth to increase the tax base and that more benefits for business, not less, is the way to go. "Jobs have been

fleeing New York State over the past ten years and proper incentives need to be put into place," he said. "We need cheaper energy costs and tax credits for business that offer their employees health insurance." Other lawmakers said that the legislature saw the current fiscal crisis on the horizon and worked to be ahead of the problem. "Constant monitoring throughout the fiscal year will be essential," said Sen. Owen Johnson (R-4th District.) "My colleagues and I in the Senate have been working with the Governor and Assembly for months to address projected budget shortfalls and together we have achieved

savings of $1.5 billion in the current year," said Johnson. "This year's budget is balanced and we don't expect serious reductions in state tax revenues Johnson said those reductions were made equitably. "I fought hard to ensure that they were spread across the entirety of the state budget in order that no one area was particularly hard hit, while ensuring that the vital services that New Yorkers depend on were protected. I would employ the same methodology in the event any further reductions in state spending became necessary in the future."

"Local families are having to tighten their belts and make ends meet and Albany needs to do the same," said Fuschillo. "The legislature returned in a special session in August and approved $427 million in savings this year and $649 million for next year; we must continue to monitor the situation and act again if it becomes necessary."

One thing Johnson and other lawmakers said they would not do to meet revenue projections is to raise taxes. "I have stood firm on this and will continue to do so," he said.

Assemblyman Joe Saladino (R-Massapequa,) said he supports a property taxpayers protection act, which would phase in a change from the current method of funding education through property taxes to an income tax based method. "This would help all homeowners, particularly senior citizens and first-time homebuyers," said Saladino.

His Democratic opponent, Keith Scalia, said that if reform is to come, it won't be by reelecting incumbents who have done little or nothing to bring tax relief to New Yorkers. "Politicans like Mr. Saladino are part of the problem," he said, "not the solution."

Assemblyman Robert Sweeney (D-11th District,) places the blame for the current economic downturn squarely on the shoulders of Washington for its lack of oversight—and looks to Washington to take measures to alleviate the pain at the state and local levels.

"A good first step would be for Washington to provide funding for infrastructure improvements," said Sweeney. "The funds would be used to create jobs, upgrade our wastewater facilities to protect drinking water and our marine environment, improve our transportation system and move us toward renewable energy systems."

Another Democrat, Kristen McElroy who is running against Sen. Kemp Hannon (6th District), agreed that tough decisions will have to be made. She said the state must prioritize programs and eliminate porkbarrel cronyism.

"We need to look at what services are being duplicated and what services can be streamlined," said Hannon, who supports incentives for school and special district consolidations, a merger of 'back office' functions and a system to allow taxpayers the opportunity to evaluate each governments' comparative costs. "We should also establish, on the Internet, a system of best practices so local governments can easily find and adopt the most efficient steps to take," he said.

Most incumbents and their challengers avoided making any specific recommendations about where to cut from the state budget, referring, instead to a philosophy of cutting "across the board," or from "pet projects." What they did focus on, however, were areas that they said they would not cut—primarily education and health care.

Democrat, Elizabeth Bloom, who is running against Assemblyman Phil Boyle, (R-8th District,) suggested that the state look at early retirement incentives and attrition policies to trim down the state workforce. She also suggested implementation of a moratorium on overtime, except for emergency personnel such as law enforcement. "When New Yorkers are looking to government for assistance with much more basic needs such as health care and heating their homes, the state will have to channel more revenue into services that directly assist citizens," she said.

Her opponent favors cutting the state's "overly generous," Medicaid program. "We must provide adequate health care for our indigent, but should not fund every medical procedure allowed by federal law," said Boyle, adding that he also supports eliminating state government authorities that have outlived their usefulness but continue to waste taxpayer dollars.

Raia said that the state's infrastrucure is likely to be an area that will undergo some cuts, but that less transportation aid will only mean an increase in tolls for bridges, roads and tunnels. "I will continue to fight against congestion pricing or any other commuter tax proposal as I do not think it is fair to those commuting

to the city.mostly from Long Island and Westchester.to

have to foot the bill for New York City's traffic issues."

Election day is Tues., Nov. 4. The polls are open from 6 a.m. to 9 p.m. in Nassau and Suffolk counties.