Gov. David Paterson will unveil his recommendations Tuesday for the state's new fiscal year, which starts on April 1. Paterson, who has shown positive leadership on the state's fiscal front, faces a dilemma - he needs to show fiscal discipline with a measured hand of compassion as he rolls out his spending plan.

There is little doubt, except perhaps from most members of the state Legislature, that New York's fiscal house is a mess. A variety of estimates show that New York is heading into next year with a possible $14 billion budget gap and a multi-year gap that is a multiple of that.

Harking back to this fall's national campaign, Paterson needs to decide whether he plans to use a machete or a scalpel when it comes to shaping the state's spending priorities.

Paterson seems to know well that New York cannot borrow or tax its way out of this mess - cuts are what are required. The problem for him will be that across-the-board cuts, which sound like common sense, usually aren't so logical when it comes to spending programs.

One reason, usually the last considered, is that when spending is cut that way, some programs just are no longer viable or cost effective to run - in that case you either have to fund them fully or eliminate them all together.

Paterson and his department heads have a tough balancing act - unlike the failures of the last three incumbents in that office who seemed to like every spending program they saw - the decline in the national economy and the woes on Wall Street exacerbate the situation for New York. For example, the needs of the bottom tier of the state's residents increase during this trying period, with increased joblessness, an increase in homelessness, lost health care coverage and increased poverty. Using a hatchet on programs that serve those impacted most will be more costly in time.

In a period when the need for job creation is paramount, the mindless slashing of economic development programs does not make sense either (at the same time, doing what is currently done with abused programs like Empire Zones is idiotic). Paterson and his economic development team should be looking for programs that target sectors with programs that result in increased investment and job creation.

As has been well documented, the state's need to upgrade its crumbling infrastructure cannot, for the most part, be cut back.

Encouraging consolidation and reforming school aid, as well as dealing with escalating health care costs are not only the biggest ticket items, but those that can provide the most in savings. No one will be happy, but for Paterson, the choices are not easy.

Cosentino is a former mayor of Auburn and can be contacted at cozguytho@aol.com