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Tax cuts promised in state budget

March 21, 2013
By MICHAEL GORMLEY - Associated Press

ALBANY - Gov. Andrew Cuomo and New York legislative leaders have sealed a tentative $135 billion budget deal for 2013-14 that controls spending and promises tax cuts.

After optimistic predictions they would reach a budget deal last Sunday, Cuomo and lawmakers became mired in policy issues. Still, the final budget is expected to beat the April 1 deadline for passage and become the third straight on-time budget for the state.

Cuomo said Wednesday the budget plan calls for a $350 rebate check for middle-class families with at least one child and a household income of $40,000 to $300,000. The checks wouldn't be sent to taxpayers until 2014, an election year for Cuomo, a Democrat, and lawmakers.

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The agreement would raise the $7.25 hourly minimum wage to $9 over three years, but without automatic increases tied to inflation. The deal also would include the second extension of a temporary millionaire tax increase that raises $2 billion a year. The tax increase doesn't expire until next year, but this avoids a sensitive vote during an election year.

"With an increase of the millionaire's tax and a significant increase in the minimum wage, this budget takes strong steps to address income inequality," said Michael Kink of the Strong Economy for All coalition of progressive groups.

Tax cuts would be provided to employers hiring recent veterans or young workers, and to small businesses and corporations in one of the nation's highest taxed states.

Fact Box

Tentative budget deal touches rich and poor


By The Associated Press


-Raising the $7.25 hourly minimum wage to $8 an hour on Jan. 1; $8.75 a year later; and $9 a year after that.

-A tax rebate of about $350 for families with at least one child making $40,000 to $300,000. The checks won't flow, however, until at least 2014, an election year.

-About $700 million in additional business tax cuts spread over at least the next two fiscal years sought by Senate Republicans. The cuts include a tax rebate for employers who hire recent combat veterans in a measure sought by the Republicans and the Independent Democratic Conference. They include a $10,000 tax credit for hiring a veteran who joined the service after Sept. 11, 2001, and $15,000 credit for hiring disabled veterans.

-A second extension of the $2 billion temporary millionaire's tax. The income tax increase on those making $1 million isn't due to expire until 2014, but inclusion this year will avoid taking up the measure during an election year for Cuomo and the lawmakers.

-Changes to the state's new gun control law. The bill was rushed into law a month after the Newtown, Conn., shootings and contains several errors and ambiguities that must be fixed.

-Limitations on the New York City Police Department's practice of "stop and frisk," which supporters say cuts down on crime and opponents call a violation of civil rights.

-Approval to let New York City use traffic cameras to record license plates of speeding cars.

State spending would rise less than 2 percent under the plan expected to be voted on by the Senate and Assembly by the end of Sunday. The total budget, including one-time federal funds for relief from Superstorm Sandy, is about $143 billion.

Cuomo budget director Robert Megna said school aid of more than $20 billion a year would go up by about $1 billion, an increase over the $890 million hike Cuomo proposed before the legislative negotiations took place.

But New York City schools won't get the $250 million reimbursement it sought. The schools lost that increase from last year because the United Federation of Teachers union and Mayor Michael Bloomberg failed to agree to a teacher evaluation system by a deadline set in state law.

A Bloomberg spokesman had no comment Wednesday night.

Several thorny policy issues that appeared to become stalled during budget talks over the last week will be held for debate until after the budget passes - although a governor loses some leverage on policy disputes after a budget is approved. Politics in Albany involves trading on often unrelated issues.

Awaiting discussion is Cuomo's proposed restrictions to the stop and frisk tactic being used by New York City police and the governor's plan to de-criminalize the small amounts of marijuana often found during the frisks. Cuomo wants public display of small amounts of marijuana to be a violation, not a more serious misdemeanor that Democrats say can ruin young lives.

There also was no agreement on penalties for synthetic marijuana, the dangerous drug known as bath salts or on changes to the gun control law passed in January in response to the Newtown, Conn., school shootings. Those talks continue.

"This is probably the most family friendly budget I've ever seen," said Sen. Jeffrey Klein, leader of the Independent Democratic Conference that for the first time shares Senate majority control with Republicans.

Senate Republican leader Dean Skelos promised it will be a "really early budget" that continues a record of timely budgets and fiscal responsibility. Many of the tax cuts were proposed by the Republicans, who showed continued clout in a state government otherwise dominated by Democrats.

"It honors the moral obligation we have and keeps a safety net," Assembly Speaker Sheldon Silver said of the tentative budget. Silver, a Democrat who led the effort to raise the minimum wage, said the "conceptual framework" will also help "turn the economy around to create jobs in every region of New York state."



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