Governor Paterson is calling lawmakers back to Albany to tackle the state's growing budget deficit and other unfinished business left over from the summer. But the Senate does not yet appear sold on slashing state aid across the board to the tune of $5 billion over two years. On Monday, they held the first of a series of public hearings to help develop their own plan. Our Mike Whittemore has a look at where the Senate and the governor stand.

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His travels took him to the Southern Tier Monday morning where he talked of a "new economy" focused on alternative energy and innovation to create jobs. But following a closed-door meeting with local business owners, his focus turned to the more immediate economic issue - closing the $3 billion budget gap and what he hopes to see from lawmakers when he calls them back to work on Nov. 10.

"This isn't a deficit like we had last year going out of the budget," said Governor Paterson. "The deficit is about 25 percent more than it was last year. But the resources are half of what they were last year."

But the governor and the state Senate appear to be at odds over where the cuts should come from. Senate Democrats are trying to avoid deep cuts to education and health care and are holding public hearings this week before announcing what they plan to cut, or even how deep the cuts should be.

Senate President Pro Temp Malcolm Smith said, "We agree with about a billion and a half of what he had. We're a little concerned about some of the other areas, education and health care. While we know there does need to be some cost cutting in them, we want to do these hearings."

Senator Carl Krueger of Brooklyn said, "The numbers are exaggerated. We believe that. There is money. While we speak today, our staff is going through the budget and we're finding money. We're going to shrink that deficit."

Meanwhile, Paterson is planning to go through with his plan to bring the message of the state's dire situation to the rank and file members of the Legislature. He has asked to address a joint session of the Legislature on Nov. 9, a day before the special session.

Paterson has also scheduled a public leaders meeting for Thursday of this week. With all the hearings complete, the Senate and Assembly should have some more specific plans to propose.