ALBANY, N.Y. (WIVB) - New York State goes from drowning in debt to gasping for air. The budget vote breathes some life into a desperate financial situation.

Lawmakers agreed on how to trim the state's huge budget deficit. But,who will pay the price?

Erie County and all local governments are bracing for state aid cuts by the governor who says lawmakers didn't step up to meet the budget crisis.

In passing their $2.7 billion deficit reduction plan, state lawmakers fell a half-billion dollars short of what the governor requested.

Now, local governments could face cuts and delays in payments imposed by the governor himself.

"Reduce payments so that we will have the cash to pay our debts at the end of the December," said Paterson.

But what about the debts of local municipalities like Erie County, which could miss a $20 million payment this month?

Erie County Comptroller Mark Poloncarz said, "We're fine for 2009. I'm not worried about the remainder of this month, but I am worried starting in the middle of January through February. If they stop payment to local governments we could have problems."

The governor had wanted a 4.5 percent mid-year cut in school aid, which didn't happen.

Senator Dale Volker (R) said, "Which, of course, would create havoc in local school districts. They know they are going to get hit in the budget later on."

The SUNY system and community colleges, however, will be cut back 5 percent.

There will be health care cuts, including a 5.4 percent reduction to the office of mental retardation and developmental disabilities.

Assemblyman Antoine Thompson (D) stated, "Unfortunately that's going to trickle down to a lot of programs that people care about and we've already seen where nursing homes are closing in Buffalo."

The democratic majority said it kept funding for vital services, protecting over 12,000 jobs. But next year the cuts could be deeper, and the pain more intense because this year's reductions didn't cover the deficit.

"It's tough, but I gotta tell you anything we don't do this year, we're going to have to do next year," said Assemblyman Jack Quinn.

Paterson said, "This is exactly what I warned, that fifteen to twenty states have already done earlier this year, and that New York will have to do, because we did not cover the deficit sufficiently."

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