Four months late, NY lawmakers pass state budget

ALBANY - State lawmakers can take at least one piece of good news home to constituents this year: They avoided passing the latest budget in state history.

Voting 32-28 along party lines, the Democratic-controlled Senate Tuesday night adopted a revenue bill, the last portion of the state's spending plan, which is more than four months late - but a week shy of the Aug. 11, 2004, record. Final passage of the $136-billion budget had been held hostage Tuesday to a controversial measure to grant SUNY campuses more control over their tuition and revenues, but that bill twice failed to win a majority and was eventually laid aside.

The $1.5-billion revenue measure, aimed at bridging a $9.2-billion deficit, passed with scant discussion. Among other things the bill would eliminate the sales tax exemption on clothing and shoes costing under $110.

Later, Republican leader Dean Skelos (R-Rockville Centre) denounced it as proof that Democratic control of state government has been a "complete disaster," saying it will raise taxes.

But Austin Shafran, spokesman for Senate Majority Conference Leader John Sampson (D-Brooklyn), praised the spending plan, calling it "a fair and responsible budget that works for New Yorkers."

And Morgan Hook, spokesman for Gov. David A. Paterson, noted that the budget closes the deficit "primarily through spending cuts and with no borrowing."

Meeting in an extraordinary session mandated by Paterson, both chambers approved a contingency plan to fill a $1.085-billion revenue gap if the U.S. Senate does not extend supplemental Medicaid payments to states.

The Senate also approved a 4-percent property tax cap proposed by Paterson with a strongly bipartisan vote of 51-8. But Assembly Speaker Sheldon Silver wouldn't bring it to a vote before sending his members home, saying it did not have the votes to pass his chamber.

Assembly members also unanimously voted to repeal a measure they, but not the Senate, adopted earlier this year imposing income taxes on hedge fund managers who work in New York but live elsewhere.

The day was a trademark display of Albany dysfunction as Senate Majority Leader Pedro Espada Jr. (D-Bronx) at first announced he would skip the mandatory session ordered by the governor, only to reverse himself and appear in time for afternoon votes. The Democratic-controlled Senate can't pass a budget without the 32nd vote provided by Espada.

But the toughest fight of the day was the SUNY empowerment bill, one that drew passionate opposition from the Senate's minority members and others, but just as passionate and insistent advocacy from its backers.

"The University of Stony Brook is the largest single-site employer . . . on Long Island," said Sen. Brian Foley (D-Blue Point), who noted its links to top-flight science at Brookhaven and Cold Spring Harbor laboratories and its potential to excel with more funding.

But Sen. Carl Marcellino (R-Syosset), a former teacher, called the measure, backed by Paterson, a "bad idea." He added: "SUNY was built by taxpayers with taxpayers' money to educate the poor and middle class. We don't need to compete with Harvard, Yale and Berkeley."

Silver agreed. "That SUNY empowerment bill is a tax on the middle class and we are not prepared to provide that tax on the middle class," he said.

By evening, Senate leaders released a statement with Foley and Sen. William Stachowski (D-Buffalo) saying a "framework agreement" had been reached but negotiations will continue.

PASSED TUESDAY

Suspend sales-tax exemption on clothing and shoe purchases below $110, starting Oct. 1; it would be restored April 1, 2012 ($330 million in revenue to the state this year).

Reject the governor's proposal allowing wine sales in grocery stores and a tax on sugary beverages to fund obesity prevention programs. ($0)

Eliminate STAR exemption for homeowners earning more than $500,000, beginning in 2011-12 ($0 million).

Limit personal income tax reduction for NYC residents to the first $500,000 of income ($120 million).

Cap and defer business tax credits ($100 million).

Limit tax deduction on charitable contributions for multimillionaires ($100 million).

Expand operating hours of slot machines at horse racing tracks ($45 million)

Allow state and local governments to borrow from state pension plan to make required contributions to it; money must be repaid over 10 years with a 5 percent interest rate. Governments would be required to establish reserve funds to address fluctuations in contribution amounts. (About $200 million).

PASSED PREVIOUSLY

$1.4 billion cut in school aid.

$775 million reduction in health care spending

$290 million in revenue from higher taxes on cigarettes and other tobacco products

$250 million in state workforce savings

$34.5 million cut in the Tuition Assistance Program

$175 million cut in welfare and other programs for the poor.

$149 million cut in mental health services.

$155 million in revenue from new legal fees and proceeds from winning lawsuits

STILL UNRESOLVED

Allowing SUNY and CUNY campuses more control over their tuition and revenues.

The Senate approved a 4-percent property tax cap, but the Assembly has yet to act.