By ADAM SICHKO
The Albany Business Review

New York's budget director has ordered state agencies to continue extending retirement buyouts to employees.

The directive, dated Nov. 18, revives a retirement-buyout program that expired this month. The state faces a $3.2 billion budget deficit, and shrinking its workforce is a key way to help save money, said budget director Robert Megna.

More than 1,100 people, 25 percent of the state's target, have accepted the one-time $20,000 buyouts.

The State of New York is the top employer in the Buffalo area, with more than 25,000 employees.

The state is offering the buyouts to members of the Civil Service Employees Association and Public Employees Federation, which represent the bulk of state workers.

Paterson had threatened to lay off 8,700 workers in order to help balance the state's finances. Labor unions bargained a deal that traded a pledge for no layoffs with requirements for state agencies to eliminate vacant positions and offer buyouts.

Now, the retirement deadline has been pushed to Jan. 20, 2010. Paperwork must be filed by Dec. 22.

"The state continues to face serious fiscal challenges," Megna wrote in a letter to the heads of state agencies. "To address this situation, the governor has instructed agencies to aggressively offer severances to reduce the state workforce and maximize savings."

Last month, Paterson ordered state agencies to cut $500 million of expenses. Savings that result from taking people off payroll count toward that goal, Megna said.