Bloomberg News

Cuomo Nails $136 Billion Budget Deal With N.Y. Lawmakers

March 21, 2013

Governor Andrew Cuomo negotiated an agreement with New York lawmakers that will smooth passage of a $136.5 billion budget and extend a higher tax on top earners for three years to help close a deficit.

The deal announced yesterday will help lawmakers meet an April 1 deadline to complete a spending plan and deliver Cuomo’s third consecutive on-time budget. The accord also would raise the state’s minimum wage to $9 an hour over three years and provide $650 million in tax cuts and credits for businesses and middle-income families that will be phased in starting in 2014.

Lawmakers said voting may start this weekend on the plan, which closes a projected $1.35 billion deficit. Negotiations were slowed by non-budget issues, such as modifying the nation’s strictest gun-control law, passed in January.

“It is a two-year framework that looks at the main expenses,” Cuomo, 55, told reporters in a briefing late yesterday in Albany. Using the longer timeframe “is a more intelligent way to actually plan a budget.”

Over the past three years, the first-term Democrat worked with lawmakers to close more than $13 billion in budget gaps, partly by getting the state’s largest unions to agree to wage freezes. This year’s talks were complicated by a new arrangement in the previously Republican-led Senate, where a group of five Democrats now shares leadership power with Republicans.

Giving Back

“This is the most middle-class friendly budget in a generation,” Jeff Klein, a Bronx Democrat who co-leads the Senate, said in statement. “We’re not only giving minimum-wage workers the raise they deserve, we’re putting real dollars back into the pockets of families who need it.”

One such move creates a $350 tax credit for families with at least one child and earning from $40,000 to $300,000 a year. Those credits and some tax deductions, which weren’t specified yesterday, are among $650 million in rollbacks that won’t begin until next year.

“It is critically important that we send the middle-income families a message that we are here for them and we’ll do what we can to make their lives easier,” Dean Skelos, the Long Island Republican who co-leads the Senate, said yesterday.

For joint filers earning $2 million or more annually, the agreement will mean more is taken from their pockets. It would extend a temporary higher income-tax rate, which raises $1.9 billion annually, for three years beyond its expiration in 2014, Cuomo said.

Legislative Strategy

Prolonging it now helps Cuomo and lawmakers avoid the issue next year, when they may be seeking re-election. The governor coupled the higher rate with reductions for married couples who bring in less than $300,000 a year when it passed in 2011.

Business groups, including the Partnership for New York City, which supported the temporarily higher rate in 2011, don’t favor prolonging it.

“Extension of the surcharge at the time is the worst possible message New York state could send to our most important job creators and revenue generators,” Kathryn Wylde, the partnership’s president, said last week in a letter to Cuomo. Her group has previously backed his spending plans.

The Senate’s power-sharing structure snarled the governor’s push to boost the state’s $7.25 minimum wage. After early proposals failed, he won agreement for three increases, to $8 an hour by Jan. 1, $8.75 a year later and $9 by 2016.

Cuomo drew Republican support by packaging the wage boost with tax cuts for small businesses, including a $10,000 credit for hiring a veteran -- $15,000 for those who are disabled.

Gun Law

Negotiations over the budget had slowed this week as Cuomo pushed to include policy measures such as letting New York City decriminalize possession of as much as 15 grams (0.5 ounce) of marijuana, and changes to the toughest U.S. gun regulations.

The new state law, passed in the wake of the Newtown, Connecticut, school massacre, limits the capacity of ammunition magazines to seven rounds, down from 10 previously. The proposed changes would let residents have 10-round magazines, provided they contain only seven cartridges.

“There is no such thing as a seven-bullet magazine,” Cuomo said at a news briefing yesterday, before the budget deal was struck. “That doesn’t exist. So you really have no practical option.”

Marijuana and magazine capacity aren’t part of the budget accord, Cuomo said. Still, an agreement may be reached on those issues before lawmakers break next week for a recess. If not, there’s still time get them done before the legislative session ends in June, he said.

The changes Cuomo is proposing for magazine rules aren’t shaking pro-gun regulation advocates’ support of the new law.

“We’re not going to ask people to retool their magazines,” Leah Gunn Barrett, head of New Yorkers Against Gun Violence, said by telephone. “This will remain one of the toughest gun laws in the country.”

To contact the reporter on this story: Freeman Klopott in Albany, New York, at fklopott@bloomberg.net.

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net.


Ebola Rising
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus