March 15 (Bloomberg) -- New York Governor Andrew Cuomo and legislative leaders are closing in on a deal that would smooth passage of a $136.5 billion budget and make it the state’s earliest spending plan in 30 years.
The accord is expected to close a $1.35 billion gap without new taxes. If approved by the legislature by March 21 as planned, it would be the earliest budget since 1983. It also would be the state’s third consecutive on-time spending plan, a first since 1984, when Cuomo’s father, Mario, was governor. New York’s fiscal year starts April 1, unlike most states.
“We hope to have a deal within the next 24 hours,” Dean Skelos, the Long Island Republican who is co-leading the Senate with a group of five breakaway Democrats, said yesterday after emerging from a meeting with Cuomo.
Lawmakers and the governor, a Democrat, have agreed to general spending levels, though exactly how the money will be distributed hasn’t been decided. Legislative leaders and Cuomo may meet in New York City today to negotiate further. Prolonging a tax increase on high-income earners was said to be among the issues still under discussion.
Extending the higher rate on joint filers earning $2 million or more a year has been the focus of robust discussion during private meetings between Cuomo and legislative leaders, according to two people familiar with the talks who asked not to be identified because the negotiations were private. The levy raises $1.9 billion annually and is set to expire in 2014.
The length of an extension and whether to include it in the budget remain undecided, said the people. Cuomo, who comes up for re-election in 2014, pushed the tax change through the legislature in December 2011, coupling it with reductions for married couples earning less than $300,000 year.
The deal may include an increase in the minimum wage that Cuomo and Democratic lawmakers are pushing for, as well as tax cuts for small businesses that Republicans want. An agreement probably won’t include a plan for three upstate casinos in Cuomo’s January budget proposal, said Tom Libous, a Binghamton Republican and the party’s second-highest ranking senator.
The governor said he intends to keep negotiating the casino provision with lawmakers. Cuomo has said he expects a casino plan to pass by June, before the legislative session ends. If the proposal is adopted, voters would still have to approve a constitutional amendment in November legalizing Las Vegas-style casino gambling for the plan to move forward.
In his first two years in office, Cuomo, 55, has closed more than $12 billion in deficits, in part by winning wage freezes from the state’s biggest unions.
The on-time, balanced budgets are helping move the state toward regaining the highest credit grade from Standard & Poor’s. The rating company last had it at AAA in 1972.
In August, New York-based S&P revised its outlook on the state’s AA rated general-obligation debt to positive from stable, saying two more years of balanced budgets may merit a one-step rating increase, to AA+.
Lawmakers have agreed to move forward with a plan that allows localities to cut pension costs, according to Cuomo, Skelos and Assembly Speaker Sheldon Silver, a Manhattan Democrat. After Cuomo included the plan in his proposed budget, some local elected officials, including Syracuse Mayor Stephanie Miner, a Democrat, said it would be a form of borrowing that would only increase municipal expenses.
Cuomo has said the plan was optional and designed to let local governments cash in now on savings from pension changes enacted last year, such as raising the retirement age for new workers to 63 from 62. Associated cost reductions won’t begin until the next generation of public workers is hired.
At a news briefing in Albany yesterday, Cuomo said he’s hopeful for a budget agreement, though negotiations may continue through the weekend.
“You’re at the three yard line,” he said. “But what does it mean? I’ve seen a lot of teams on the three yard line that never get over the goal line. So we’ll see how it goes.”
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