Governor Andrew Cuomo and legislative leaders agreed to a budget plan that cuts spending by nearly $10 billion dollars, and does not raise any new taxes, scrapping proposals for a continued tax on the state’s millionaires.
Cuomo announced the deal, along with legislative leaders, after days of behind the scenes negotiations. Calling it "the people’s budget," Cuomo proclaimed a "new day" at a State Capitol infamous for its dysfunction.
"This is a budget that's not about the special interests, it's not about the lobbyists," Cuomo said.
The $132.5 billion dollar budget, if approved, represents a win for Cuomo, who made passing a budget that included spending cuts but no new taxes one of his top two priorities for his first legislative session. The plan spends 2 percent less than last year's budget.
The agreement contains most of the $2 billion dollars in health care cuts recommended by the governor's Medicaid redesign panel, which
included many health care stakeholders, like hospitals and unions. It does not include a proposed $250,000 cap on medical malpractice pain and suffering awards.
Lawmakers also agreed to cut all but $272 million dollars of $1.5 billion dollars that Cuomo recommended in school aid reductions. And they agreed to shrink the state's prison system by 3,700 beds.
Assembly Speaker says the spending plan is "firmly grounded in reality" and is "fiscally responsible," but does contain real pain.
"This is a sobering budget," Silver said.
The announcement comes a full five days before the spending plan is due, and Senate majority Leader Dean Skelos, who said he's been
"delighted" with the process, says the budget "sends a message to the business community that New York State is prepared to work with you."
The spending plan does not include extension of an income tax surcharge on millionaires to close the deficit, something many Democrats and advocacy groups had sought. A spokesman for the Alliance of Quality Education, a pro school funding group, said the budget makes "heartlessly large cuts to schools to finance tax cuts for millionaires."
Kathryn Wylde, with the business group the Partnership for New York City, called the budget deal "a dramatic reversal in the tax and spend habits of Albany that drove this state to the brink of financial disaster."
Cuomo held significant power over the legislature in the form of a new budget device first used by former Governor David Paterson. Cuomo had threatened that if lawmakers did not agree to a budget by the April 1 deadline, he would jam his entire spending plan through in the very first budget extender. It would have left lawmakers little choice — they would either have to pass Cuomo's budget, or be blamed for shutting down the government.
Through negotiations, lawmakers were able to achieve some of what they wanted in the budget: some school funding restorations, likely
to key areas in rural upstate regions and on Long Island, as well as $86 million dollars restored to public colleges and universities and
$91 million dollars for unspecified human service needs.
Assembly Democrats supported the tax on the rich but failed in efforts to include in the final deal. They were successful in pushing back on the medical malpractice cap, which many also opposed. And Senate Republicans were able to achieve some control over the
closing of prisons, many of them in upstate districts represented by GOP Senators. Cuomo has now agreed to consult with the legislature before he orders prison closures later this year.
Lawmakers also signed off on Cuomo’s plan to create 10 regional economic development councils to try to create jobs and improve the
economy. And they agreed to merge the state’s banking and insurance departments into one financial services agency.
Not all the i’s are dotted and t’s crossed in the budget deal, Cuomo calls it a "definitive framework," but said he hopes the legislature
can start passing bills as early as Tuesday.