Cuomo strikes $300m deal with­out tax in­crease

The Pak Banker - - COMPANIES/BOSS -

NEW YORK: Gover­nor Andrew Cuomo and leg­isla­tive lead­ers struck a deal to al­lo­cate $300 mil­lion for uni­ver­sal prekinder­garten in New York City, giv­ing Mayor Bill de Bla­sio funds for his sig­na­ture pro­gram with­out the tax in­crease on the rich he sought.

The agree­ment is part of a wider ac­cord on the state's $137.9 bil­lion budget and sets up the fourth con­sec­u­tive on­time spend­ing plan ahead of the fis­cal year that starts April 1. 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.

The pre-K funds, which in­clude an additional $40 mil­lion for schools else­where in the state, will be avail­able as soon as lo­cal­i­ties can make classes avail­able, Cuomo said. The plan also in­cludes new train­ing re­quire­ments for early child­hood ed­u­ca­tion teach­ers.

"It's not just an ag­gres­sive un­der­tak­ing for statewide pre-K, it's also about a qual­ity pre-K pro­gram," Cuomo said to­day on con­fer­ence call with re­porters. "We're ex­cited about that."

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 non­in­cum­bent 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 mid­dleschool­ers 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.

About 20,000 of New York's 68,000 4-year-olds get city­funded 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, Bob Megna, Cuomo's budget di­rec­tor, said on the call with re­porters to­day.

In the last month, ne­go­ti­a­tions among Cuomo and law­mak­ers ze­roed in on a dol­lar fig­ure for pre-K in the city and statewide, with lit­tle talk of the tax.

Though de Bla­sio didn't get the levy, the $300 mil­lion just for New York City is triple the amount Cuomo in­cluded in his Jan­uary budget pro­posal for the en­tire state, while also com­mit­ting to pro­vide $1.5 bil­lion statewide pro­gram over the next five years. The over­all fund­ing amount is the same that Cuomo pro­posed in Jan­uary, al­though it speeds up the de­liv­ery. The cash will be doled out as a re­im­burse­ment for work al­ready done by ap­proved pro­grams, Cuomo said.

It'll help set up the largest pre-K pro­gram in the U.S. in New York City. De Bla­sio sees the tripling of state sup­port in the first year of the five-year plan as a pos­i­tive, said Wi­ley Norvell, a may­oral spokesman.

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.

"The tax freeze is an elec­tion year ploy that ig­nores the re­la­tion­ship of un­funded state man­dated spend­ing on lo­cal gov­ern­ments," said Michael Con­ners, the Al­bany County comp­trol­ler, in an e-mailed state­ment. The budget also in­cludes an additional $1.1 bil­lion in ed­u­ca­tion spend­ing, a 5.3 per­cent in­crease over the cur­rent fis­cal year.

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