Gov. Cuomo unveils budget proposal

Gov. Cuomo unveils budget proposal

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Gov. Andrew Cuomo (file photo) Gov. Andrew Cuomo (file photo)

MICHAEL HILL and MICHAEL VIRTANEN | AP

ALBANY, N.Y. (AP) -- New York Gov. Andrew Cuomo on Tuesday proposed budgeting $137.2 billion for the fiscal year starting April 1, a spending increase of less than 2 percent accompanied by business, property and estate tax relief.

The budget he released projects increases of 4.6 percent for federally and state funded Medicaid, to $58.2 billion, and 3.8 percent in aid for schools, to $21.9 billion. It keeps many other spending lines flat, including $714.7 million in state aid to cities, towns and villages.

"This year is relatively simple and straightforward," Cuomo said. However, he said it contains more policy and program proposals than usual.

In education, the governor wants to spend $1.5 billion to establish statewide prekindergarten programs over the next five years while spending $720 million to expand afterschool programs. A $2 billion bond act subject to voter approval in November would bring broadband and computers to classrooms.

He would cut the tax rate on net corporate income from 7.1 to 6.5 percent, establish a 20 percent real property tax credit for manufacturers and eliminate net income tax on upstate manufacturers. He would raise the estate tax exemption from $1 million to $5.25 million while cutting the top rate from 16 percent to 10 percent.

The budget proposes a two-year property tax freeze through state rebates to homeowners in local jurisdictions that stay within a 2 percent tax increase cap.

"This budget recognizes and believes that tax relief is an economic growth strategy that is working for our state," Cuomo said.

Cuomo's proposal kicked off months of negotiations in which the governor and state lawmakers will try to maintain their three-year streak of reaching a final budget deal by the start of the state fiscal year April 1.

Cuomo has said the state can amass a $500 million budget surplus this coming year if lawmakers agree to limit spending increases to 2 percent. The governor said that would allow surpluses to grow to $2 billion in three years.

But E.J. McMahon of the fiscally conservative Empire Center said that adopting the budget wouldn't lead to the $2 billion surplus Cuomo proposes using to offset the tax cuts, though he said it's a fine goal. Instead, by traditional measures, it has budget gaps of $1.6 billion in 2016, $2 billion in 2017 and $3 billion in 2018. "He has basically changed the rules," he said. "... It's like a coach saying we've not only won more games, we've already scored 30 more points, when it's actually his goal to score 30."

Counted separately from the budget, the administration also estimates another $2.4 billion in federal recovery funds for rebuilding from Superstorm Sandy and $2.5 billion for New York's implementation of the federal health insurance overhaul law.

On prekindergarten, Cuomo said existing state revenues would fund the program. That differs from the proposal by New York City Mayor Bill de Blasio to fund citywide prekindergarten with a tax surcharge on those earning $500,000 or more. De Blasio said Tuesday that Cuomo's proposal is commendable but that he wants to continue seeking the tax hike because he's concerned the money Cuomo's talking about is not dedicated and could be shifted around down the road.

Assembly Speaker Sheldon Silver, whose conference is dominated by New York City Democrats, said he still needed to look at the details of Cuomo's plan but was open to long-term funding solutions.

"As long as it's sustainable, as long as it's guaranteed going forward, then I think, very clearly, maybe a tax would only be needed for part of what's overall needed," Silver said.

Lawmakers are likely to seek some changes to the spending plan in the coming months. State Senate Republican leader Dean Skelos immediately disparaged Cuomo's inclusion in the budget of public financing for elections, saying he thinks New Yorkers would rather see public money go into education and infrastructure as opposed to so-called campaign robocalls.

The budget proposal also details the governor's ambitious plans to rebuild New York's infrastructure in the wake of mass flooding like that from Superstorm Sandy. Cuomo wants to fortify coastal infrastructure and to replace and repair 104 older bridges statewide. He also wants Metro-North Railroad to expand to New York City's Penn Station.

Associated Press reporter Jonathan Lemire in New York contributed to this report.

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