Monday, March 28, 2011

N.Y. Budget Deal Cuts Aid to Schools and Health Care

N.Y. Budget Deal Cuts Aid to Schools and Health Care


Phil Mansfield for The New York Times
Gov. Andrew M. Cuomo, center, and legislative leaders announced a budget accord on Sunday, beating a deadline of March 31.

Capping weeks of secretive negotiations and intense political jockeying, Gov. Andrew M. Cuomo and leaders of the Legislature on Sunday announced a $132.5 billion budget agreement that would cut overall spending, impose no major new taxes and begin a long-term overhaul of New York State’s bloated Medicaid programs.

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The agreement, five days before the March 31 budget deadline, offered the prospect of Albany’s first on-time budget in five years. If enacted by lawmakers, the deal would cut the state’s overall year-to-year spending for the first time in more than a decade.
While some details were not available on Sunday night, the outlines of the deal suggested that Mr. Cuomo had won a significant victory in his battle to rein in state spending and corral the unions and other special interests that have long dominated the budget process in Albany. It would also fulfill one of Mr. Cuomo’s main campaign pledges: to avoid new taxes in addressing the state’s financial problems.
Dashing the hopes of many Democratic lawmakers, including the bulk of the New York City delegation, the budget did not include an extension of a temporary income tax surcharge on wealthy New Yorkers, a measure that has drawn support among Democrats and even some Senate Republicans as a way to further offset Mr. Cuomo’s proposed cuts in money for schools and other programs.
Mr. Cuomo persuaded legislative leaders to agree to a year-to-year cut of more than $2 billion in spending on health care and education, historically the two largest drivers of New York’s budget. Over all, officials said, the budget deal would reduce year-to-year spending by about 2 percent.
For both Medicaid and education, the deal calls for a two-year appropriation instead of the traditional one year’s worth of financing, locking in fixed rates of growth through Mr. Cuomo’s second year in office and potentially allowing him to avoid a repeat of the battles he fought this year with teachers’ unions and other special interests.
In exchange, Mr. Cuomo agreed to add $250 million — a modest amount by Albany standards — to his executive budget proposal, including more money for schools, the blind and the deaf, human services, higher education, and prescription drugs for the elderly.
Mr. Cuomo and the legislative leaders said they hoped the agreement would signal a new day of responsible budgeting and effective government in a Capitol long criticized for its gridlock and dysfunction.
“This budget brings the power back to the people,” Mr. Cuomo, a Democrat elected last fall, said at a news conference at the Capitol, where he was joined by both parties’ leaders in the Senate and the Assembly. “For them to see their government functioning this way, it’s a new day in New York. We set out to build a new New York, and this is the first step down that road.”
Mr. Cuomo succeeded in part by aggressively wielding a tool pioneered by his much-maligned predecessor, Gov. David A. Paterson: He threatened that if lawmakers missed the budget deadline, he would put his preferred cuts into an emergency spending measure, forcing them to vote for his budget or risk shutting down state government. That pressure helped drive lawmakers to the table in recent days, because refusing a deal with Mr. Cuomo would have meant giving up what scant restorations the Legislature had been able to wring from him.
Seeking to avoid the blistering attack ads from labor unions and hospitals that have pummeled past governors and weakened their hand with the Legislature, Mr. Cuomo also persuaded the state’s most powerful health care interests to draft a side deal with him that gave Mr. Cuomo the broad cuts he needed in exchange for concessions that would not directly affect the budget, like a “living wage” law for home care workers.
But Mr. Cuomo also made some concessions. He agreed to abandon a cap on “pain and suffering” damages for victims of medical malpractice, a controversial measure avidly sought by the hospital industry in exchange for its support of the health care cuts but strongly opposed by Assembly Democrats. A related proposal, to establish a state fund to pay for the future medical expenses of brain-damaged infants, survived the negotiations, drawing praise from hospital executives.
Advocates for increased school aid were livid over the deal, suggesting that Mr. Cuomo’s cuts — and his refusal to consider a “millionaires’ tax” to offset those cuts — would hurt students. “Governor Cuomo’s first budget makes heartlessly large cuts to our schools to finance tax cuts for millionaires and billionaires, and students in poor and middle-class districts will lose the most educationally,” Billy Easton, executive director of the Alliance for Quality Education, said.
The Assembly speaker, Sheldon Silver, a Manhattan Democrat, said he would fight to renew the income tax surcharge through a separate piece of legislation. “We still hope to convince our partners it’s the right thing to do,” Mr. Silver said.
The budget also did not include an extension of state rent regulations, which are set to expire in June, another issue that many Democratic lawmakers from New York City had supported.
Some details of the agreement remained unclear on Sunday. A district-by-district breakdown of school aid, with details that could trouble many rank-and-file lawmakers, would not be available until Monday, officials said. The deal also includes a cut of 3,700 prison beds but does not specify which prisons might close in the coming months.
“This budget agreement keeps our Senate Republican commitment to reduce spending, cut taxes and empower the private sector to create jobs,” said Dean G. Skelos, a Long Island Republican who is the Senate majority leader.
Legislative leaders also agreed to adopt Mr. Cuomo’s proposal to cut 10 percent from state agencies’ budgets, including $450 million in unspecified work-force savings, which are likely to lead to layoffs. No precise number was available.
“It sounds as if the budget has been settled generally on the governor’s terms, without significant new taxes,” said Edmund J. McMahon, director of the Empire Center for New York State Policy, a research group that favors reduced government spending. “That’s a real accomplishment. But with so many important details unsettled, he’ll have his work cut out for him in the coming months.”
The announcement Sunday came as Democrats, teachers’ unions and other groups mounted a last-ditch effort to force reconsideration of the income tax surcharge and rent regulation. While lawmakers in both the Republican-controlled Senate and the Democratic-controlled Assembly typically vote for budget deals that their leadership helped design, some Democrats have in recent days openly discussed voting against a budget that was too austere.
“I don’t know what I’m going to do yet,” said State Senator Liz Krueger, a Manhattan Democrat. “I have not seen any of the paperwork that’s come out yet, so there’s a lot to make an evaluation of.”

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