NY: Gov. Paterson's budget expected to include education cuts, new taxes

Paterson is expected to call for state-aid cuts to schools and health care and seek revenue raisers, such as likely revisiting a controversial plan to increase sales taxes on soft drinks. He is also expected to renew a proposal to allow grocery stores to sell wine, increase taxes on cigarettes and expand operating hours for the Quick Draw lottery game and racetracks with video-lottery terminals.

Paterson's office would not discuss details of the proposal Monday but indicated that spending cuts would be part of it.

"The governor said consistently that a number of tough actions and spending reductions will be necessary to close an unprecedented fiscal challenge, and his budget tomorrow will reflect that," said Matt Anderson, spokesman for the governor's budget office.

Paterson has rolled out some proposals in recent days, including a cap on mandates passed down to schools and local governments and merging some agencies. He has pledged to keep spending below the 2 percent rate of inflation.

Paterson's ideas have been met with positive reviews from voters, two polls Monday showed, helping the Democratic governor improve his once-record low approval ratings as he seeks election in November.

While federal stimulus money is expected to plug some budget holes, schools are bracing for cuts in aid. Paterson's budget plan will go to the Legislature for approval; the deadline to pass a spending plan is April 1.