New York, NY —

Governor Paterson has agreed to delay a special budget cutting session of the legislature, but he's rejecting a Senate plan to refinance some bonds. From Albany here's Karen DeWitt:

REPORTER: Paterson in a public meeting with legislative leaders shot down a plan floated by Senate Democrats to refinance tobacco settlement bonds, a proposal that senators predict could raise $500 million. Paterson says the money is not guaranteed, and it could not come fast enough to pay bills due in less than two months.

PATERSON: We created phony revenues to falsely finance our spending, and we wound up in the place we're in, and I'm stopping it.

REPORTER: A spokesman for the Senate Democrats says senators intend to pursue the idea anyway, believing it's a better option than the Governor's plan to cut education aid in the middle of the school year. In Albany, I'm Karen DeWitt.