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Cuomo Seals Budget Deal With New York Legislative Leaders

New York Governor Andrew Cuomo
Andrew Cuomo, governor of New York. Photographer: Chip Somodevilla/Getty Images

March 27 (Bloomberg) -- Governor Andrew Cuomo struck a deal with New York lawmakers on a $132.6 billion budget, opening a path toward the earliest passage of a spending plan since 1983.

The agreement raises funding for schools, sets up a gambling commission and provides $13.1 billion for the Metropolitan Transportation Authority’s five-year capital budget. The Legislature may start voting tomorrow on the accord, which also establishes a task force to oversee infrastructure projects that Cuomo said will create tens of thousands of jobs.

“When we say we got the budget done on time, most people say, ‘big deal, you’re supposed to get it done on time,” Cuomo said today at a press conference in Albany, the capital. “For many years it wasn’t done on time and that became a metaphor for the symbol of dysfunction in Albany.”

The budget closes what was once a $3.5 billion deficit, a process made easier when lawmakers in December approved a Cuomo-backed tax increase on joint earners making at least $2 million annually, which lowered the gap to $2 billion. The remaining savings were reached mostly by consolidating state agencies.

The talks in Albany focused on allocating a 4 percent education-funding increase, or about $800 million. The final piece fell into place as negotiators for legislative leaders and Cuomo, a 54-year-old Democrat, agreed to reduce the amount provided through competitive grants.

Competitive Grants

Cuomo had proposed doling out $250 million through competitive grants. Lawmakers wanted more money disbursed based on need. The deal provides $75 million for competitive grants over the next two years, said Senate Majority Leader Dean Skelos, a Long Island Republican. Another $50 million to be awarded that way this year hasn’t been spent and may carry over.

Skelos and Assembly Speaker Sheldon Silver, a Manhattan Democrat, spoke about the agreement yesterday at a hearing of the Legislature’s Joint Budget Conference Committee.

“Through the spirit of compromise with our colleagues in the Senate and the governor’s staff, we were able to identify and address many of the priorities in what has been agreed to in this budget,” Silver said yesterday. “We are ready to pass an early budget this week.”

Health-Care Exchanges

Lawmakers and Cuomo didn’t include creating a state health-care exchange in the spending plan, which Cuomo had proposed. Cuomo and Silver want to set up a one-stop shop for health insurance before the federal government steps in and does the job, under President Barack Obama’s 2010 health-care overhaul. Republicans who control the Senate were reluctant to support it.

The exchange won’t be part of the budget, Skelos said. Cuomo said today he’ll issue an executive order this week creating one.

A proposal to cut small-business taxes, included in the budget resolution passed by the Senate this month, also won’t be in the spending plan, Skelos said.

“We can do a lot of things after the budget,” he said.

New York’s 2013 fiscal year begins April 1. If the spending plan is passed and signed before then, it would be the first back-to-back years of on-time budgets since 2005 and 2006, Morris Peters, a state Budget Division spokesman, said by e-mail. If it’s passed March 30, a day earlier than last year, it would be the earliest budget approval since 1983, he said.

Boost for City

Some of the budget’s most contentious issues were resolved March 15, when the Legislature approved a Cuomo-backed pension overhaul and a teacher-evaluation system, items that were part of the spending plan Cuomo sent to lawmakers in January.

“City taxpayers are winners today in Albany,” New York City Mayor Michael Bloomberg said in an e-mailed statement. “The components of the budget agreement announced today, taken together with the landmark pension-reform overhaul announced two weeks ago, herald the best legislative session for the city in a decade.”

The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

An agreement reached March 25 would provide $13.1 billion to fund the last three years of the MTA’s five-year capital budget, letting projects such as the Second Avenue subway proceed as planned, according to Senator Charles Fuschillo, a Merrick Republican who heads the chamber’s Transportation Committee. The state had provided only $9.1 billion for the first two years.

MTA Debt Ceiling

The deal raises the MTA’s debt cap by $7 billion and includes a $770 million payment from the state to the MTA’s capital program. The payment will come from the proceeds of bonds issued by the Thruway Authority, the Dormitory Authority and the Urban Development Corp., according to a budget bill printed today.

Another deal would create a seven-member gaming commission to oversee Indian casinos, horse racing, and run the state lottery along with its video terminals at race tracks. The commission, with five members named by the governor and one each picked by Skelos and Silver, will replace the current Racing and Wagering Board and the Lottery Division.

This month, the Legislature passed a proposed constitutional amendment that would permit as many as seven Las Vegas-style casinos in the third-most-populous U.S. state. The amendment will go before voters if lawmakers approve it a second time next year. The bill creating the commission doesn’t mention non-Indian casinos.

Infrastructure Task Force

A separate measure would create a 15-member infrastructure task force to determine the state’s building needs and develop a plan for meeting them. The panel, part of Cuomo’s original proposal, would also recommend financing options, including using state-backed debt, federal funds and “other finance vehicles.” Cuomo is seeking legislation separate from the budget that would let investors take part in public infrastructure projects.

The budget will also create a $15 billion infrastructure fund that combines $1.2 billion in state funding, with $1 billion from the federal government and $9.3 billion from state authorities, including $5 billion for a new Tappan Zee Bridge. The commitment of government cash, Cuomo said today, will help draw $3.5 billion from private entities to fill out the rest of the fund.

“We’ve never looked holistically about what our infrastructure priorities are,” Karen Rae, deputy secretary of transportation, said in an interview in New York before the accord was reached. “This is a much more proactive intervention on how we prioritize across many agencies.”

To contact the reporter on this story: Freeman Klopott in Albany, New York, at

To contact the editor responsible for this story: Mark Tannenbaum in New York at

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