The Associated Press March 19, 2012, 4:43PM ET

Governor, NY Legislature turn to passing budget

After a deal was struck and passed on major policies last week, Gov. Andrew Cuomo and New York's Legislature have turned to negotiating a $132 billion state budget before the April 1 deadline.

More than two-thirds of the budget is already settled. But some thorny issues remained open Monday, including whether to enact a new state health insurance marketplace called an "exchange" under President Barack Obama's health care program.

Cuomo and the Senate Republican and Assembly's Democratic majorities have already agreed to 4-percent increases in school aid and health care. That agreement was made a year ago to soften reaction to the cuts in the current budget that expires March 31.

"I don't think there are any major obstacles," said Senate Majority Leader Dean Skelos, a Long Island Republican. He said he expects a "framework" of an agreement this week and passage next week, before April 1.

Cuomo proposed a $132.5 billion budget in January. Senate Republicans want to spend a little less, Assembly Democrats want to spend a little more and each are divided by a fraction of the traditional range between the executive and legislative proposals. The budget will include a higher income tax on millionaires passed in December to raise $2 billion that will pay for a tax cut of $200 to $400 for most middle-income families.

But within that total, there are differences among the leaders. Cuomo had wanted to use $250 million of the $800 million increase in school aid for competitive grants to reward performance and innovation. But Assembly Speaker Sheldon Silver says most of that should be returned to general school aid, where the neediest school districts get a larger share of the money.

Legislators want to set aside $750 million of the increase for general school aid. That would leave Cuomo with $50 million for the competitive program, which is what he secured for the current fiscal year.

Another sticking point is whether New York creates a health insurance exchange, aimed at enabling the uninsured to shop for coverage at competitive rates, under the Obama administration's health care plan, a major campaign target for Republicans in the presidential race.

The state Senate's Republican majority didn't include health exchanges in their budget proposal, saying more study is required. Cuomo and the Assembly Democrats favor the plan to create a kind of one-stop supermarket for health care to insure more Americans.

If the state doesn't approve a health exchange with federal funds within months, the Obama administration will create one.

The Legislature also opposes Cuomo's proposal to empower the governor to more freely move money between agencies as he pushes consolidations of services and efficiencies. Lawmakers say the Senate and Assembly are charged in the constitution with approving spending in the annual state budget, and governors must stick to it.

On Monday, Silver also supported the potential return of pork-barrel spending known as "member items," saying lawmakers know best how the grants can serve their districts. The discretionary grant spending by lawmakers and the governor has been suspended for three years after scandals and fiscal crisis forced a cut of hundreds of millions of dollars.

Each majority also has its own proposals that they want in the budget going into the fall legislative elections.

The Senate Republicans want a package of tax breaks for small businesses to encourage hiring. The Assembly Democrats want to raise the $7.25-an-hour minimum wage to $8.50 an hour to provide a more adequate living standard, but Silver insists that will be the subject of debate after the budget.

"I'm willing to compromise on a lot of things," Silver, a Manhattan Democrat, said Monday.

The legislative leaders and Cuomo, however, want an on-time budget to take to voters as a sign of an efficient state government.

The governor, however, has the trump card in a late budget. Under unusual powers provided in law for New York governors, Cuomo may impose his budget in emergency spending bills if there's no agreement before the deadline.

The Legislature's joint conference committees are meeting now to debate various budget issues, from transportation to higher education funding. A unified proposal by the Legislature will then, traditionally, be part of closed-door talks between Cuomo, Skelos and Assembly Speaker Sheldon Silver.

The budget work comes after Cuomo and lawmakers reached agreements Wednesday on a new and cheaper pension system for future public workers, an expanded DNA database for use in law enforcement, redistricting of state legislative districts for use over the next 10 years, and the first passage of a constitutional amendment to open up to seven casinos statewide.

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Associated Press writer Michael Virtanen contributed to this report from Albany.


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