ALBANY - New York Gov. David Paterson told state agencies to draft zero-growth budgets to fend off a $5.4 billion deficit projected for the coming fiscal year.

A no-growth budget for the agencies that run everything from parks to highways and environmental protection programs would be rare in New York. Overall state spending - which also includes the costs of education, health and other programs - has increased at two and three times the inflation rate in some recent years.

“We cannot continue making excuses for why the state is unwilling to limit its expenses at a time when hard-working taxpayers are forced to do the same thing every day,” Paterson told agencies in his executive branch. “Change is never easy. But it is unavoidable if we want to stem the tide of unsustainable spending growth, job losses, and declining population that has plagued New York for decades.”

Agencies are beginning to compile their budget requests now for the 2009-10 fiscal year that begins in April. Paterson will propose his budget in January. The Legislature's deadline to act on the budget is April 1.

Spending in the current $122 billion budget has been cut to combat deficits several times since Paterson took office March 17. The Democrat has blamed the deficits on years of overspending and declining tax revenue because of a national recession.