Cuomo Proposes $136B Budget Without Tax Increases

7:32 PM, Jan 22, 2013   |    comments
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By Joseph Spector, Albany Bureau Chief

ALBANY -- Gov. Andrew Cuomo proposed a $136 billion budget plan Tuesday that increases education aid by 4.4 percent, limits state spending growth to 1.9 percent and closes a $1.3 billion budget gap without raising taxes and fees.

The 2013-24 budget proposal offers new initiatives to boost the sagging upstate economy and seeks to alleviate the growing cost of public pensions by creating a new program for local governments.

The fiscal year starts April 1, and Cuomo is hoping state lawmakers will adopt the budget on-time for the third consecutive year, which would be a first in recent history.

"We have built credibility, we have balanced the budget, we have passed on-time budgets, and the public trust has been restored," according to the budget briefing. "New York is, indeed, on the rise."

The $1.3 billion budget gap is nearly double what Cuomo estimated a year ago as tax revenues have not kept up with projections.

Cuomo proposed closing the budget gap through consolidations and cuts to state agencies, including the closure of two prisons. -- Bayview in Manhattan and Beacon in County. Overall, Cuomo said he would find $434 million in limiting state spending.

The Bayview prison has been vacant since Superstorm Sandy in October. The Beacon facility, Cuomo said, costs the state nearly $70,000 per inmate a year - more than twice the state standard. The closures would reduce bed capacity and save nearly $19 million, Cuomo said.

He did not indicate how many staff members might lose their jobs.

Aid to the state's roughly 700 school districts would increase by 4.4 percent, or $889 million. Total school aid would be $20.8 billion. Three percent of the increase, $611 million would go directly to schools and $203 million would be one-time financial relief to help struggling districts.

Another $75 million would be competitive grants, which would include money for schools that expand pre-kindergarten programs and the expand classroom time.

Aid for local governments - cities, towns and villages - would stay flat at $715 million. There would be an additional $79 million for grants to promote greater government efficiency.

Cuomo seeks to address mandate relief for municipalities, who have warned that unfunded state programs are crippling their budgets.

The budget proposes a "Stable Rate Pension Contribution Option," which would allow schools and local governments to essentially smooth out their pension payments by limiting the growth in the coming years but adding to the cost in latter years.

Cuomo also wants the Legislature to relinquish its control over counties who want to increase their sales-tax rate. Currently, lawmakers have to approve any extension or increase. The budget proposal said would make the issue "solely a local responsibility."

Cuomo also offers a host of new tax breaks to spur job growth. Among them, he would reduce employers' cost of purchasing workers' compensation insurance. He said it would provide $900 million in savings to employers.

The state's unemployment rate in December fell slightly from 8.3 percent to 8.2 percent, the state Department of Labor reported Thursday. New York's unemployment rate, however, is still above the national average of 7.8 percent.

Gov. Cuomo's proposed budget Tuesday continues funding for his regional economic-development program while moving forward with plans to create 10 tax-free "hot spots" for burgeoning industries.

Cuomo's $136 billion spending plan calls for a state-backed, $50 million venture capital fund and outlines plans for a marketing program meant to boost the state's tourism and locally grown products.

 Here's a look at the highlights in Gov. Andrew Cuomo's $136 billion budget proposal Tuesday:

-- Closes a $1.3 billion budget gap without new taxes or fees.

-- Increases spending by 1.9 percent.

-- Includes $6.1 billion in expected federal aid for Superstorm Sandy. Overall, the budget expects $30 billion in federal aid for storm relief.

-- Boosts education aid by $889 million, or by 4.4 percent, including $75 million in competitive grants.

-- Creates tax-free zones for job growth and continues $220 million for regional development councils.

-- Reforms workers' compensation system to save employers, governments and schools $900 million.

-- Starts program to help local governments fund growing pension costs.

-- Raises the minimum wage from $7.25 an hour to $8.75 an hour.

-- Includes $974 million in savings through government consolidation, including the closure of two prisons - in Manhattan and Beacon Correctional Facility in Dutchess County.

-- Puts in revenue raisers to bring in $403 million, mainly extending current taxes, such as limiting charitable contribution deductions on people making more than $10 million.

-- Provides $85 million to Thruway Authority, including cost of the Thruway's State Police patrol, to avoid a toll increase on trucks.

-- Requires industrial development agencies run at the county level to get approval from the state's regional development councils for state sales-tax exemptions and limits sectors where IDAs can offer tax breaks.

-- Allows businesses under 2,500 square feet that sells lottery tickets to sell Quick Draw, the Keno-like game. Would bring in $24 million for state education.

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