Cuomo Strikes $300M Pre-K Deal Without Tax Increase

Gov. Andrew Cuomo signed a nearly $140 billion state budget Tuesday, which allocates $300 million for universal pre-kindergarten in New York City, giving Mayor Bill de Blasio funds for his signature program without the tax increase on the rich he sought.

The deal sets up the fourth consecutive on-time spending plan ahead of the fiscal year that started Tuesday. The deal also puts on the November ballot a $2 billion borrowing referendum to fund school technology and pre-K classrooms, a measure to give property owners rebates on their taxes if their local governments control spending, and another that drives the corporate tax rate to its lowest since 1968.

Following debate that began Monday morning, the Senate passed the budget around 10:30 p.m. and the Assembly followed suit 45 minutes later, tempering fears they might not achieve a fourth consecutive on-time budget before the new fiscal year.

Agreement on the spending plan was reached by Cuomo and legislative leaders early in the weekend, but the governor had to waive the required three-day review period on the education and health bills that weren’t printed until early Saturday.

Education was a sticking point for the Legislature, which spent hours debating funding for statewide full-day pre-kindergarten, charter schools and the flawed rollout of the Common Core, a new testing standard.

While de Blasio touted his achievements, lawmakers outside of New York City criticized the agreement saying that the $40 million allotted for the remainder of the state to implement full-day pre-kindergarten is unfair.

The accord puts a formal end to a battle over taxes between Cuomo and de Blasio, fellow Democrats and friends for 20 years. The mayor took office in January after winning election by the widest margin in history for a non-incumbent with a campaign that described a metropolis divided between rich and poor. He said a tax increase on those earning more than $500,000 to fund pre-K and after-hours programs for middle-schoolers would help shrink the divide.

The sticking point was that de Blasio needed approval from state lawmakers and the governor to raise taxes. He visited the capital four times, pressing for a levy increase. Cuomo and Republicans who control the Senate were focused on cutting taxes in an election year, and de Blasio’s initiative hit a wall.

But the mayor put a positive spin to the outcome at a Monday news conference.

“What I said was we needed reliable funding for five years at the dollar figure we set,” de Blasio said. “What did we get? Reliable funding for five years at the dollar figure we set.”

About 20,000 of New York’s 68,000 4-year-olds get city- funded full-day pre-kindergarten classes, with 38,000 enrolled in three-hour programs and 10,000 in none. De Blasio, who plans to start the program in September with 53,000 children, has estimated it would cost about $342 million a year to serve about 73,000 children in 2015.

About 25 percent of middle-schoolers participate in afterhours extracurricular programs, and to double that enrollment would cost about $190 million, according to de Blasio’s plan. The budget directs as much as $750 million expected from new casinos in the state to pay for after-school programs.

The spending deal puts the state in position for its fourth consecutive on-time budget, the first time that’s happened since 1977. The timely budget has the state poised for its highest credit rating from Standard & Poor’s since 1972.

The accord includes a plan to give property owners a rebate equal to the increase in their property tax bill if their local governments agree to keep spending growth below the state’s 2 percent property tax cap, the legislation says.

In the second year, they’d get a rebate if the jurisdictions they live in present a three-year plan to share services and lower spending by 1 percent annually while remaining under the cap. During the course of three years the plan, which also includes a rebate for New York City renters who meet income requirements, will provide $1.5 billion to 2.8 million taxpayers, Cuomo said.

Exemptions from New York’s estate taxes would rise from $1 million to $2.06 million immediately and up to $5.25 million in 2017. The tax rate would remain 16 percent.

The tax cuts fortify Cuomo’s right flank in an election year when Republican hopeful Rob Astorino has been claiming New York’s tax climate is discouraging business. But the budget has left some progressive groups unhappy.

Both houses spent hours debating public financing for political campaigns. The budget includes testing public campaign finance with the state comptroller race this year. Good government groups and some lawmakers say that the pilot program is flawed and doesn’t go far enough.

Another provision in the budget package protects insured patients from surprise out-of-network medical bills starting in one year. It would require better disclosures from doctors and hospitals about facilities in a patient’s network and subject related billing disputes to arbitration between the medical provider and insurance company.

The budget contains almost $138 billion for the coming year. Officials also estimate getting another $5 billion in one-time federal aid for further rebuilding after Superstorm Sandy and the rollout of the Affordable Care Act to extend health coverage to uninsured New Yorkers.

Following the vote, applause and cheers were heard through the Capitol hallways as the Senate stands adjourned until April 23.

This article appeared in print on page 15 of the April 2nd, 2014 edition of Hamodia.