$142B Cuomo budget: $4B Sandy aid, 3% school spending hike

ALBANY -- Gov. Andrew M. Cuomo unveiled a $142.6 billion budget proposal Tuesday that includes about $4 billion in federal aid for superstorm Sandy recovery.

The governor proposed hiking school aid by 3 percent while keeping overall state spending growth under 2 percent. A $1.35 billion deficit would be addressed by freezing spending on state operations, closing two state prisons, reducing the projected growth in aid to localities by one-fourth and refinancing debt.

He also proposed a smattering of tax extensions, tax credits and fee hikes, raises for some nursing-home workers and a minimum-wage hike from $7.25 per hour to $8.75.

The Democrat, entering his third year in office, said his plan would "maintain fiscal responsibility."

"The taxpayer's pocket is not a bottomless piggy bank," Cuomo said during his budget presentation.

Overall spending would grow about 5 percent under his plan -- largely because of an influx in federal aid for rebuilding after Sandy ($3.6 billion) and to implement the new federal health-care law ($2.5 billion). Without the bump in federal aid, the state budget would be $136.5 billion and growth would be 1.9 percent.

New York expects to eventually receive about $32 billion in Sandy aid from Congress, although only a fraction of that ($5 billion) will be spent by the end of the 2013-14 fiscal year, the Cuomo administration projected.

The governor's proposal also includes smaller-scale initiatives, such as opening the state Department of Motor Vehicles on Saturdays, creating a tax break for electric-vehicle recharging equipment, allowing stores to sell more Quick Draw lottery tickets, and suspending the driver's licenses of delinquent taxpayers who are more than $10,000 in arrears.

Legislators by and large reacted positively to Cuomo's presentation, while stressing they had yet to be given the actual budget. Lawmakers are supposed to adopt a budget by April 1, the start of the state's fiscal year.

"I don't see anything that is a huge stumbling block right now," said Sen. Dean Skelos (R-Rockville Centre), co-leader of a new coalition controlling the state Senate. He praised the small spending increase and initiatives to help local governments cut costs.

Skelos, who opposed a minimum-wage hike last year, said it would be "more palatable" if it is paired with tax cuts for small businesses and if future increases aren't tied to inflation, as Assembly Speaker Sheldon Silver (D-Manhattan) and most rank-and-file Democrats have proposed. Cuomo's proposal doesn't include an inflation index.

"We want to make sure it's not counterproductive," Skelos said. "We will analyze it. We will see if this is the right year to raise the minimum wage."

Assembly Speaker Sheldon Silver (D-Manhattan) missed the speech following the birth of a grandchild. He later sent a statement praising the governor's "prudent" plan, but reiterated his call for a minimum-wage hike that is indexed to inflation.

The Sandy initiatives include money for rebuilding and to buy out homeowners who don't want to rebuild. Cuomo said the state wouldn't dictate rebuilding plans but instead review proposals submitted by local governments. He also proposed mitigation measures to keep subways from flooding.

Cuomo pitched a series of economic-development initiatives in his spending plan, including a $50 million venture capital fund. But he didn't include any new casino money in the budget -- even though he said he'll ask the state Legislature to approve a plan this year for three upstate Las Vegas-style casinos. He said it was unrealistic to count on any casino revenues till 2016.

The governor offered a series of measures to help local governments and schools stay within the state's 2 percent property-tax cap. One would allow municipalities and schools to freeze contribution rates to the state's Common Retirement Fund in the near term, although they may pay higher rates later.

For schools, Cuomo recommended earmarking $20 million for school districts that want to extend the school day or school year.
More highlights from Gov. Andrew M. Cuomo's proposed 2013-14 state budget:

ENERGY

4.9 percent drop in energy and environment spending, to $1.414 billion from $1.487 billion a year ago

Cuomo's proposed budget provides few details about his plan to privatize LIPA, other than saying it will be pursued to "protect ratepayers and ensure reliable service." No legislation is immediately proposed to start the process.

The budget proposal extends the temporary State Energy and Utility Service Conservation Assessment. For Long Island Power Authority ratepayers, the assessment amounts to 1 percent of annual revenue, or about $36 million annually, through a levy on LIPA bills.

Total spending on energy and environmental programs declines 4.9 percent from the previous year's budget, to $1.414 billion from $1.487 billion a year ago. The governor's budget includes a total appropriation of $21 billion for disaster-related recovery from superstorm Sandy, including rebuilding and hardening electric distribution systems and implementing a new energy-sector worker training program to address a shortage of electrical workers. LIPA experienced a shortage of electrical inspectors during the October storm.

The budget also recommends expanding the PSC's authority to initiate administrative proceedings to recover "more robust civil penalties," and to review performance and emergency planning, ensure compliance, and revoke or modify operating licenses for violating utility companies. It also calls for streamlining DPS and the New York State Energy Research and Development Agency for unified policies and to eliminate redundancy

Cuomo's budget also includes $1 billion to form a Green Bank to spur environmentally beneficial economic development, expand the New York Sun solar program with $150 million for 10 years to increase solar installations in homes and businesses, and develop a Charge NY program for a network of electric car chargers.

-- Mark Harrington

ENVIRONMENT

$19 million increase for land preservation

The proposed budget calls for spending cuts at the Department of Environmental Conservation and the Office of Parks, Recreation and Historic Preservation. DEC spending would drop by 5.5 percent to $919 million next year, down from $972 million. Parks spending would decrease by 3.2 percent to $276 million from $285 million. The cuts at both agencies are primarily the result of discontinued local assistance projects, according to budget documents.

The Environmental Protection Fund, which was created in 1993 for the DEC, parks department, local governments and nonprofit groups to buy park lands and historic resources, would see an increased budget. Cuomo proposes $153 million for programs to support the fund -- a $19 million increase, or 14 percent, over last year's numbers.

Allocations to open space and farmland protection, and for water quality improvement, will increase, and a new category -- flood resiliency -- "is an exciting place to start and it's good to see the environment back on the agenda," said Adrienne Esposito, executive director of Citizens Campaign for the Environment.

The increase in the fund balance will come from a transfer of unclaimed bottle deposit receipts and increased enforcement of the bottle deposit program, which requires distributors and bottlers to refund the state a portion of the money earned from deposits but never reclaimed by buyers, budget documents said.

Friends of New York's Environment, a partnership of more than 100 environmental, agriculture and public health groups, applauded the increase to the Environmental Protection Fund. "While we look forward to learning more details of how this will be achieved, this proposal is an encouraging start, and represents a down payment on the commitment the governor made" to strengthen the fund," the group said in a news release.

The proposed budget also includes $90 million in new appropriations for capital projects for DEC, parks department, Department of Agriculture and Market, and Olympic Regional Development Authority.

Cuomo's proposal also includes a provision that would permanently extend the $2.50 waste tire management and recycling fee added to the purchase price of any new tire. The fee is set to expire at the end of 2013. On average, an estimated 18 to 20 million tires are generated each year by new tire purchases, according to the DEC.

-- Emily C. Dooley

TRANSPORTATION

$4.2 billion more for MTA; $23.5 million more for Long Island buses

Cuomo's budget includes new investment for rails and roads throughout the state, and an effort to reduce waiting time and improve processing at Department of Motor Vehicles offices.

The governor proposes $4.7 billion in aid to transit providers -- a $381.5-million increase from the previous year. Of that, $4.2 billion will go to the Metropolitan Transportation Authority -- a 5-percent hike. Aid to other downstate transit providers, including Nassau's NICE Bus and Suffolk County Transit, will climb to $454 million, a $23.5 million increase.

Metropolitan Transportation Authority spokesman Adam Lisberg said the MTA, which has seen cuts to aid in recent years, "is pleased with Gov. Cuomo's proposed budget."

The budget proposes increasing Department of Transportation spending by 3.1 percent, but also looks for $32 million in cost cutting. Funding for local highway and bridge projects remains at 2012 levels.

Marc Herbst, president of the Long Island Contractors Association, a construction workers' trade group, said that by not cutting funding for road and bridge projects, Cuomo is "keeping his commitment. And I think that's good for Long Island."

Cuomo also proposes spending $4.5 million on a new customer service initiative to reduce wait times at DMV offices to 30 minutes or less, increase Saturday office hours, and make more DMV services available online.

-- Alfonso Castillo

ECONOMIC DEVELOPMENT AND TAXES

$1.50 per hour increase in minimum wage

Cuomo's budget offers more details about a proposed increase in the minimum wage to $8.75 per hour from $7.25, a rise he announced in his State of the State speech on Jan. 9.

The governor said Tuesday the increase should go into effect on July 1, and would add $1 billion to the pay of more than 700,000 low-wage workers in the first year.

He did not suggest that future increases be tied to the inflation rate, which was part of a 2012 proposal that died in the State Senate. Cuomo did not mention any tax breaks for small businesses, the primary opposition to a wage hike.

"Increase the minimum wage because it's fair," he told state lawmakers and others in a theater near the state Capitol. "With more disposable income, workers will spend more and sales tax will increase."

His proposed overhaul of workers' compensation would save employers $900 million and stabilize rates for four years by tapping reserve funds from the State Insurance Fund, Cuomo said. Changes to unemployment insurance would save $400 million over 10 years, he added, and more quickly pay back the federal loan that has sustained the program.

Cuomo also pledged to invest in high-technology startups and turn university research into commercial products.

Kevin Law, president of the Long Island Association business group, said Cuomo's idea to designate 10 "hot spot" business incubators across the state, including one on Long Island, as tax-free zones complements local development initiatives, such as Accelerate Long Island. The incubator project would receive $1.25 million initially.

Film studios in Bethpage should benefit from a proposed five-year extension of the movie-production tax credit, valued at $420 million per year.

"It has been year-to-year, which has caused instability in the industry," Cuomo said. "I want to be able to say to the industry, 'We're going to continue it [tax break] . . . so plan to bring your movies to New York.' "

-- James T. Madore

HEALTH

$125.5 million savings in public health and aging programs

Cuomo's proposed budget calls for $125.5 million in savings from state public health and aging programs -- using cost controls and measures to achieve greater efficiency.

The budget notes the continuation of the Medicaid spending cap enacted in 2011-2012.

It includes reforming the state's General Public Health Work and Early Intervention programs -- reducing the counties' administrative costs by more than $76 million over five years.

The public health program provides state aid reimbursements to local health departments for some public health services. The early intervention program provides therapeutic and support services for children younger than 3 with confirmed disabilities or developmental delays.

Nassau County Executive Edward Mangano said he was "encouraged by Governor Cuomo's initiative to stem the tide of unfunded mandates which historically have placed extreme financial hardships on counties."

Suffolk County Executive Steve Bellone said, "I applaud Governor Cuomo for the mandate relief provided under the Early Intervention Program. With all municipalities facing fiscal constraints, I appreciate the governor's program modifications, which will not reduce services but will result in Suffolk County saving significant dollars over the next five years."

The proposed budget calls for investing $10 million so those who receive court-ordered mental health services or have been discharged from state psychiatric hospitals will be able to obtain services in their communities.

The budget also calls for establishing regional centers of excellence for state-operated inpatient psychiatric facilities, enhanced community mental health services, and cost controls in agency operations.

The budget notes that last April, Cuomo established a New York marketplace, or exchange, for buying health insurance and that the federal government will pay for most of the cost of planning it.

-- Kathleen Kerr

HUMAN SERVICES

$366 reduction in Human Services spending

The governor's proposed budget calls for a $366 million reduction in Human Services spending.

The $8.9 billion proposed Human Services budget includes eliminating 88 beds and 15 aftercare slots from state-run juvenile offender facilities. As an alternative, Cuomo is looking to expand the Close to Home program, which would allow juvenile offenders to be treated by social service agencies near their community, instead of state-run juvenile offender homes.

Cuomo's plan also calls for $100 million to fund Pay for Success programs, which pay social service contract agencies based on their success in meeting performance benchmarks such as reducing recidivism among juvenile offenders or increasing employment rates through job training programs.

The Human Services budget also includes investing $1 billion over five years to "preserve and create" 14,300 affordable housing units statewide.

Gwen O'Shea, executive director of the Health and Welfare Council of Long Island, a social service advocacy group, said she hoped lawmakers would take into account the growing demand for services among Long Islanders hard hit by superstorm Sandy.

"We're going to keep a close eye and make sure those safety net services are there to help move people to self-sufficiency," she said.

-- Laura Figueroa