N.Y. Pre-K Tax Falters as Senate Chief Backs Off Threat

Photographer: Ron Antonelli/NY Daily News Via Getty Images

New York Governor Andrew Cuomo, a Democrat and friend of New York City Mayor Bill de Blasio’s for 20 years, has proposed a competing plan, to be paid for with state funds. Close

New York Governor Andrew Cuomo, a Democrat and friend of New York City Mayor Bill de... Read More

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Photographer: Ron Antonelli/NY Daily News Via Getty Images

New York Governor Andrew Cuomo, a Democrat and friend of New York City Mayor Bill de Blasio’s for 20 years, has proposed a competing plan, to be paid for with state funds.

It took Jeff Klein, the Bronx Democrat who shares leadership of the New York Senate, less than 24 hours to back off a threat that he’d hold up the state budget if it didn’t include a plan to tax the wealthy to pay for universal pre-kindergarten in New York City.

Klein said today he still supports New York Mayor Bill de Blasio’s levy, though he’d like to accomplish it without a tax increase. The shift is a boost for Democratic Governor Andrew Cuomo’s plan to provide pre-K statewide with existing funds while also bolstering Cuomo’s effort to win the state’s highest credit rating since 1972.

“I don’t think we’re holding up the budget,” Klein told reporters in Albany today. “The mayor put forth an amount of money that’s completely different than what the governor proposed. Now it’s up to us to come up with the money or adapt the mayor’s plan.”

Klein’s declaration of budget war yesterday came after Dean Skelos, the Long Island Republican with whom Klein shares power, said he wouldn’t let de Blasio’s pre-K measure get a vote. Both must agree to any bill that comes to the floor.

Klein’s turnabout may show the influence Cuomo wields in the legislature, which has helped him land three consecutive on-time budgets, the first since 1984. Standard & Poor’s has said New York may win a higher credit rating if Cuomo can produce a fourth straight for the fiscal year starting April 1. A bump up from its AA, third-highest, rating would be New York’s best since 1972.

Fighting Albany

De Blasio has been gearing up for a fight in Albany, where lawmakers and the governor control most local levies. He won office in November after promising to raise taxes on the rich to provide early childhood education.

Cuomo, 56, a friend of de Blasio’s for 20 years, included in his January budget proposal a plan to allocate more than $2.2 billion over five years to create after-school programs as well as classes for 4-year-olds statewide, without raising taxes. De Blasio’s five-year framework would fund the same activities just in New York City with $2.5 billion from a tax increase.

In shifting course, Klein said he needs more information from de Blasio on how much it would cost to set up pre-K for more than 50,000 children by September. The mayor has said the goal is achievable with his plan. Klein said he’s looking for money in the budget to fund pre-K in New York City, signaling that momentum may be gathering for Cuomo’s plan.

‘Right Number’

“We have to come up with the right number,” Klein said today. “We haven’t even looked to see whether or not Mayor de Blasio’s plan, the money he’s proposing, as opposed to the governor’s plan, what he’s proposing, is right and there’s a lot of ifs.”

As Klein pulled away from the budget fight, Cuomo was giving a radio interview where he said he expects the budget to be on time.

“It’s not that we start the process with everyone agreeing,” Cuomo said. “Where we’ve been successful is the way we handle disagreement and we don’t allow the disagreement to become destructive.”

De Blasio remained determined after Skelos said he wouldn’t allow a vote on the tax. The mayor won election by the biggest margin for a nonincumbent in city history with a campaign that depicted a metropolis divided. New York’s richest 1 percent took home almost 39 percent of all earnings in 2012, up from 12 percent in 1980, according to the Fiscal Policy Institute, a nonprofit research group in New York.

Frustrated Voters

“If Albany is not going to allow a vote on something that the people are demanding, I think people are going to be even more frustrated with the process in Albany, they’re going to feel even more cheated,” de Blasio said at a press briefing in Brooklyn today. “This is going to be a profound fight. And it is a fight both about the substance of the issue and about democracy.”

De Blasio wants to raise taxes on income above $500,000 a year to 4.4 percent from almost 3.9 percent. For the 27,300 taxpayers earning $500,000 to $1 million, the average increase would be $973 a year, according to the Independent Budget Office, a municipal agency. Spread over a year, that’s “about the cost of a small soy latte at your local Starbucks,” de Blasio said Jan. 1 when he was sworn in.

For those making $1 million to $5 million a year, the average extra tax would be $7,793, the budget office said. At incomes of $5 million to $10 million, the increase would be $33,518.

Skelos said yesterday that the city’s wealthy already carry a big enough burden. A married Manhattan couple with two children jointly filing with an income of $700,000 and taking standard deductions currently pays about $25,000 to the city.

“The last thing we need is to see high earners leave New York state because then we lose their tax dollars,” Skelos said yesterday.

To contact the reporter on this story: Freeman Klopott in Albany at fklopott@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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