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State budget talks mired over key issues

State Senator Jeffrey D. Klein, temporary president and

State Senator Jeffrey D. Klein, temporary president and majority coalition leader, answers questions from members of the media outside of Governor Andrew Cuomo's office after finishing a meeting about the budget with him in the Capitol in Albany on Mar. 28, 2014. Credit: Philip Kamrass

ALBANY -- Gov. Andrew M. Cuomo and legislative leaders were mired Friday in education, ethics and tax cut issues as they slogged perilously close to a late state budget that they all promised to avoid.

"When you come to this point in negotiations and you are working toward a final budget, there are always little things in each of the important pieces," said Sen. Jeff Klein (D-Bronx), who leads the Independent Democratic Conference, which shares power with Republicans in the Senate. He cited school aid, property tax relief and prekindergarten expansion as those pieces.

Klein, Senate co-leader Dean Skelos (R-Rockville Centre) and Assembly Speaker Sheldon Silver (D-Manahttan) Friday said they still expect an on-time budget to be voted on Monday.

One issue is whether to approve some form of public financing of campaigns to reduce the influence of big donors on politics. Sources said that could be tied to the future of Cuomo's Moreland Commission created to help root out corruption, focusing on the legislature.

Cuomo and legislative leaders have a tentative agreement to provide $300 million for prekindergarten expansion in New York City and $40 million for Long Island and upstate.

And although there is a tentative agreement to provide a $1.1 billion increase in general school aid, how that is divvied up is an annual battle in Albany.

Skelos has stressed "balance" and pushed for more school aid and resources on Long Island and upstate.

Part of that fight is over the so-called gap elimination adjustment in school aid, which has quietly become a major fiscal problem for schools and a major sticking point in budget talks.

The gap elimination adjustment takes back part of state school aid levels announced in state budget agreements to address overall budget gaps. If state aid is increased beyond the projected growth in the state's personal income, the gap elimination adjustment reduces the amount of school aid.

The gap elimination adjustment was supposed to be a temporary measure adopted in the 2008-11 fiscal crisis. The idea was to commit funds toward ending the huge deficits created by the loss of tax revenue in the recession, but the GEA has continued as a permanent element of school aid in New York's economic recovery.

The New York State School Boards Association called the gap elimination adjustment "one of the most reviled provisions of the state's school aid formula," costing schools billions of dollars in the past five years.

"We are working towards a successful number on gap elimination as well as a major increase in funding statewide for education," Klein said late Friday afternoon.

With Yancey Roy

State & Region