A WCBSTV report:

Bare bones is putting it mildly. It’s more like a cut to the bone. Governor David Paterson’s budget includes some layoffs and a cut in school aid, but it’s the increase in taxes that some will feel the most.

Paterson on Tuesday proposed a $121.1 billion state budget for the 2009-10 fiscal year that includes some layoffs and a cut in school aid while mostly holding overall spending flat from the current fiscal year.

Paterson’s proposal to the Legislature would fill $15.4 billion in deficits over two years and inflict as little pain as possible to as many areas as possible.

The plan includes cutting school aid by 3.3 percent, or $698 million; increasing public college tuition by 14 percent; increasing some motor vehicle and fishing fees; allowing wine to be sold in grocery stores; increasing the sales tax on luxuries; and new state and local sales taxes on music, movie and game downloads through services like iTunes.

Even after reductions, the Democrat said school aid would still total $20.7 billion.

Paterson’s plan also anticipates a decrease of 3,108 state jobs mostly through attrition in a process he says will minimize layoffs.

The 2009-10 budget calls for 521 layoffs.

Paterson presented the budget a month early to try to deal with what he calls a historic fiscal crisis in the state.

Paterson said that while annual spending growth in the last five years averaged 7.8 percent, the first budget he’s proposing would increase state operating funds by just a half of 1 percent. That would put state funds — the figure that excludes federal aid — at $79.8 billion, which he said is the lowest figure in 14 years.

The budget is far from final. The Legislature would have to agree to the spending plan due April 1, but Paterson hopes to seal a budget deal earlier to more quickly enact spending cuts attacking the deficits. He has blamed the deficits on decades of overspending, often for special interests led by labor unions, and on the Wall Street meltdown hitting an industry that has provided 20 percent of state revenues in recent years.

Taxpayers will feel the pinch in several ways. Besides potential increases in local property taxes, Paterson wants to boost income tax revenue by closing what he considers to be loopholes and making other adjustments short of changing the rates. In addition, Paterson proposes eliminating the STAR rebate program — a state subsidy that Paterson said has failed to achieve the promised goal of reducing local school taxes.

He would end the rebate checks sent to homeowners and the corresponding enhanced New York City personal income tax credit. That will save more than $1.7 billion. Paterson would continue at previous years’ levels the STAR tax exemption — a savings off tax bills rather than through a rebate check, often delivered at election time — and the New York City rebate.

The budget also proposes a $600 increase in State University of New York tuition and a $620 increase in tuition at colleges in the City University of New York system. Those represent 14 percent increases.