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Cuomo budget raises school aid 4 percent, renews millionaire’s tax

Gov. Andrew M. Cuomo's 2017 proposed budget seeks

Gov. Andrew M. Cuomo's 2017 proposed budget seeks a $1 billion, or 4 percent, increase in aid to elementary and secondary schools, paid for in part by extending the "millionaire's tax." He presented the proposal Tuesday, Jan. 17, 2017. He's pictured at a State of the State speech at Farmingdale State College on Jan. 10. Credit: Newsday / John Paraskevas

ALBANY — Gov. Andrew M. Cuomo proposed a $1 billion (4 percent) increase in aid to elementary and secondary schools Tuesday, paid for in part by extending the “millionaire’s tax,” a surcharge on high earners that was supposed to expire this year.

Cuomo, a Democrat in his seventh year in office, said the state couldn’t forgo the millionaire’s tax in his 2017 proposed budget and still boost schools, pay for his idea to provide a pathway to tuition-free public college for some New Yorkers and close a revenue shortfall. It also sets up a fight with the Republican-led Senate, which opposes the tax.

The millionaire’s tax (a surcharge on those who earn more than $1 million annually) generates more than $2 billion annually for state coffers and the state already faces a revenue shortfall this year, the governor noted.

“Frankly, we don’t have the resources to lose the ‘millionaire’s’ revenue now and have the state function the way it should,” Cuomo said during a budget presentation at the Executive Mansion late Tuesday.

Senate Majority Leader John Flanagan (R-East Northport) voiced strong doubts about Cuomo’s proposal.

“We don’t agree with that. It will be a major source of discussion,” Flanagan said. “I believe in cutting taxes. I want to try to create jobs and an economic development policy that actually helps people out.”

Flanagan noted that Cuomo is offering to extend tax breaks for families making $300,000 or less, along with renewing the millionaire’s tax. The income-tax rates for both groups of earners were enacted in 2011.

In contrast with Republicans, the leader of the Democratic-dominated Assembly said it would be a “disaster” to let the millionaire’s tax expire.

Assembly Speaker Carl Heastie (D-Bronx) said New York could be in a budget crunch if President-elect Donald Trump rolls back the Affordable Care Act, which brings in billions of dollars to states via taxes and Medicaid, and said New York needs the millionaire’s tax. “We believe this is the time for us to do this,” Heastie told reporters.

Cuomo’s spending plan totaled $162 billion, which included nearly $10 billion in “extraordinary” federal aid for implementing Obamacare and continuing to dole out superstorm Sandy relief. Expenditure of state funds would grow less than 2 percent, the governor said, because spending in various programs would be reduced $2.4 billion.

The governor’s presentation capped an unusual day at the State Capitol in which he outlined his plans in disjointed fashion, angering some lawmakers at a time when relations between the branches already are rocky. Eschewing the typical public presentation delivered to lawmakers, the governor gave some senators a private luncheon briefing but had to cancel similar briefings with other blocs of legislators when the daily legislative session ran long.

With the day running late, Cuomo took to the internet to present some of his ideas (including some announced a week earlier) in a webcast. Those included:

  • $750 million for regional economic development programs.
  • $2 billion for water infrastructure (likely through long-term borrowing, though Cuomo didn’t provide immediate details).
  • $153 million to cover increases in New York’s college-aid programs. The governor has proposed a pathway to free college tuition for students from families who earn $125,000 or less annually.
  • $260 million to help nonprofit social-services organizations meet payroll in light of the state’s rising minimum wage.
  • Privatizing the New York Racing Association (which runs horse racing at Belmont, Aqueduct and Saratoga tracks), as he proposed several years earlier.
  • Allowing children of illegal immigrants to participate in the state’s college-aid programs — the “Dream Act.”
  • Allowing beer/wine sales in movie theaters for films rated PG-13 or higher.
  • Increasing fees/taxes on automobile titles and cigars; imposing new taxes on “e-cigarettes” and vapor products; implementing online sales taxes; and continuation of tax credits for in-state film productions.
  • Choreographing lights on New York City bridges with music. “I am so excited by that,” Cuomo said. “There are only a few [cities] that have that.”

Some of the major projects would be funded through public authorities — spending that is considered “off budget.”

The actual budget legislation, which spells out how a governor intends to fund schools, Medicaid, local government and other programs, was delivered online just after 8:30 p.m. (The deadline was midnight.)

Some rank-and-file members called the way the budget was rolled out a “mistake,” complaining that the governor provided too few actual spending details and made the process less transparent.

Assemb. Michael Montesano (R-Glen Head) called the “nondelivery” a “complete meltdown and chaos.”

“All day long it’s been, ‘We’re doing this, we’re doing that.’ Back and forth,” Montesano said. “This is just utter disrespect for the Legislature.”

Cuomo also proposed a law that allows county executives to cut local costs by consolidating services provided by towns, cities, villages and counties, Flanagan said, adding such inter-government efforts aren’t currently allowed under law.

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