Assembly Speaker Sheldon Silver (D-Manhattan) in his office in the...

Assembly Speaker Sheldon Silver (D-Manhattan) in his office in the Capitol in Albany. (Jan. 24, 2012) Credit: Ted Phillips

ALBANY -- Lawmakers settled most of the outstanding issues of the 2012-13 state budget Monday, after Gov. Andrew M. Cuomo agreed to share authority over a construction fund worth billions and scaled back his proposal to make schools compete for a portion of state money.

In return, Cuomo would get control of a powerful new gambling commmission.

Legislators said the budget was "99 percent" agreed upon by Monday evening. Voting on the roughly $132.5 billion spending plan would begin Wednesday and could be completed by Friday at the latest, they said. The budget is supposed to be in place by April 1, the start of the state's fiscal year.

"The reality is, we have to close it tonight," Assembly Speaker Sheldon Silver said (D-Manhattan), referring to giving enough lead time to print and vote on bills by the deadline. He said only "bits and pieces" remained to be settled.

Cuomo didn't immediately comment.

The budget reflected agreement on a wide range of issues, covering gambling, infrastructure and education funding. It showed that legislators blocked Cuomo's attempt to increase executive power in some instances. And it exposed a failure to agree on establishing a state "health care exchange" to comply with new federal health care laws.

The budget called for merging several agencies into a single Gaming Commission -- largely controlled by the governor -- to oversee horse racing, compacts with Indian-run casinos, charitable games, off-track betting and "racinos," which are horse tracks that offer video slots. It also would be the entity to regulate non-Indian-run casinos if voters approve to legalize them, possibly as soon as 2013.

The budget also authorizes a $15 billion New York Works program for launching large-scale infrastructure projects and funds the Metropolitan Transportation Authority's capital budget, which includes the East Side Access project that will connect Long Island Rail Road trains to Grand Central Terminal.

It increased funding for community colleges by 7 percent per full-time student and provides raises for district attorneys across the state. It also approved boosting aid to elementary and secondary schools by $805 million or 4 percent.

The increase for schools had been agreed to last year -- removing what is usually the most contentious part of the budget. But Cuomo and lawmakers still had to deal with distribution of the aid increase. Cuomo had proposed channeling $250 million of it to a competitive grants program. Legislators balked and, in the end, got Cuomo to reduce the amount to $50 million.

Legislators also wanted some say over New York Works, which is Cuomo's primary jobs initiative in the budget. The agreement calls for a 15-member commission to oversee the projects; Cuomo controls nine of the appointments, but lawmakers said they are confident the agreement gives them a voice.

Senate Majority Leader Dean Skelos (R-Rockville Centre) said, "I think legislative input has been significantly increased in this budget."

But lawmakers gave in to a Cuomo proposal that would eliminate a requirement for the comptroller's office to perform "pre-audits" of certain contracts. Comptroller Thomas P. DiNapoli said the pre-audits save the state "potentially billions" and its elimination "undermines the accountability and transparency New York taxpayers deserve."

Asked about the decision, Silver said: "It was a compromise that was made."

With Ted Phillips

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