Cuomo Proposes $137.2B State Budget With Tax Cuts


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.

His proposal Tuesday kicks 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.

Counted separately from the budget, the administration 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.

De Blasio added that his 50 point blowout victory in November gives him a mandate to demand permission from Albany to raise taxes on those earning above $500,000.

Lawmakers are likely to seek some changes to the spending plan in the coming months. Democratic Assembly Speaker Sheldon Silver has said his conference will need to examine the details of the proposed tax cuts to make sure the state can continue to adequately support education and health care.

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 the Metro-North Railroad to expand to New York City’s Penn Station.

The budget includes a public campaign financing system based on New York City’s model. Under the governor’s proposal, contributions of up to $175 would be matched $6 to $1, an idea that Republicans who control the Senate have long opposed.

The proposal Tuesday also includes new restrictions on personal use of campaign funds and other measures aimed at public corruption.

The Legislature has been roiled by a series of scandals involving allegations of harassment and public corruption. More than three dozen legislators have been convicted of crimes in the past three decades.

Cuomo said that he is establishing a confidential hotline for legislative aides to report abuse without fear of retribution.

On the casino amendment which passed a referendum in November, Cuomo said he expects new casinos to begin operating in upstate New York by next Jan. 15. State officials will award up to four casino licenses upstate.

The governor’s proposed budget includes $135 million of new appropriations for the next round of the New York Works capital program, including $90 million for parks infrastructure improvements.

Cuomo says the Office of Parks and Recreation budget will also include $2.5 million for Olympic Regional Development Authority infrastructure. The state fairgrounds will get $2.5 million for improvements through the Department of Agriculture budget.

Cuomo says the Department of Environmental Conservation will receive $40 million for capital projects, including creating 50 new public access projects on state-owned lands.

Cuomo says the state will seek an additional $486 million in federal funds to replace and repair about 100 flood-prone bridges to rebuild New York’s infrastructure in the wake of mass flooding events like Superstorm Sandy.

The state will also seek $1.4 billion from the federal government to harden its power grid against extreme weather. Cuomo says in his budget presentation Tuesday this would involve elevating low-level substations, raising power lines and more tree trimming. It also would include an outage management system on Long Island, which suffered widespread service disruption during Superstorm Sandy.

Some of the money will go to developing so-called micro-grids that will serve individual communities. The micro-grids can keep power running when the main grid goes down.

The spending plan contains $15 million to plan for a new College of Emergency Preparedness, Homeland Security and Cybersecurity. The new college would be part of the State University of New York system and be led by former NYPD chief Raymond Kelly.