ALBANY — Awash with money, New York state legislators are weighing budget proposals that could boost school aid a whopping 20% while hiking a slew of taxes on high incomes, capital gains and yachts.

The state Assembly and Senate each were trying to finalize their respective one-house budget bills Friday, planning to vote on the measures sometime in the upcoming week. The bills generally set the parameters for budget negotiations with Gov. Andrew M. Cuomo, who now is under mounting pressure to resign amid an impeachment inquiry.

Under proposals legislators are considering, the income-tax rate for couples earning more than $2 million annually could jump nearly a full percentage point, to 9.72%. The rate for those earning $100 million annually could climb to 12.22%.

Taxes on corporations, capital gains and estates would rise, too. A sales tax exemption for yachts would be terminated. All told, the tax changes would generate more than $6 billion in the current fiscal year.

The overall amount of government money flowing to K-12 school districts would grow $5.7 billion overall, though two-thirds of it would come from federal stimulus aid given to states to deal with the economic fallout from the COVID-19 pandemic.

But state-provided aid also would rise: By about $1.5 billion, an increase of more than 6%.

This stands in contrast to Cuomo’s proposal, unveiled in January, which would reduce state-provided aid to schools by more than $600 million.

Other highlights in the Senate and Assembly plans would:

  • Authorize $1 billion in small business grants and "commercial rent relief" grants to help companies damaged by the pandemic.
  • Reject Cuomo’s plan to hike tuition at the State University of New York campuses by $200.
  • Increase the maximum tuition grant award.
  • Boost funding to community colleges rather than trimming it by $35 million as the governor proposed.
  • Allow New Yorkers this fall to vote on a $3 billion environmental bond act, which would approve borrowing to fund water and infrastructure projects.
  • Reject Cuomo’s proposal to shave $39 million from aid earmarked for municipalities.

Cuomo in January presented a $193 billion budget proposal to the Legislature. Thanks to an improving economy and 2020 federal aid, the state was projected to finish the current fiscal year without a budget gap.

Still, Cuomo maintained that he needed $9 billion more from Washington to avoid cuts in the 2021-22 fiscal year, which begins April 1. Thanks to the latest stimulus package, the "American Recue Plan," New York will receive more than enough money to avoid the shortfall, according to U.S. Sen. Chuck Schumer.

He said the plan, signed by President Joe Biden, sends $12.6 billion in unrestricted aid to New York state government, along with $10.8 billion to city, town and village governments.

Cuomo has been resistant to imposing widespread tax hikes on the wealthy.

For example, in January he called for raising rates only for those earning $5 million or more annually and only if Washington didn’t come through with the extra $9 billion he requested. He said if Washington came through, he would oppose raising tax rates at all, saying it would chase the wealthy out of New York.

An array of business groups has urged lawmakers not to raise taxes now that the stimulus money has covered New York’s deficit.

In a letter to legislators Friday, the New York State Business Council said: "Proposals such as major new financial transaction taxes, a significant increase in business income taxes and other revenue proposals would short circuit the state’s recovery at a time when competition for new jobs and new investments is increasing."

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