Despite falling tax revenues and a bleak economy, Gov. David Paterson and state lawmakers have agreed on a 2009-10 budget that will increase state spending next year by nearly 9 percent, or $10.5 billion, officials said Sunday.
Helping to pay for it is $5.3 billion in new taxes and fees and $6.2 billion in federal stimulus money, which accounts for a bulk of the higher spending.
Lawmakers are expected to vote to approve the whopping $131.8 billion package Tuesday and Wednesday. The new fiscal year starts Wednesday, so it appears all the bills won’t be passed on time.
Paterson and the Democratic leaders who control the Legislature praised the plan as one that closes a huge potential budget gap of $17.7 billion, retains essential services and cuts future deficits by 80 percent.
“We have produced a budget that provides a solid foundation to move forward and address the challenges ahead,’’ said the Democratic governor, who has been heavily criticized by special-interest groups for cuts to education and health care.
Republicans blasted the budget as bloated and wasteful, saying it only adds to New Yorkers’ tax burden and hurts the sagging economy.
“The end result of the most secret budget process in state history is a plan that taxes too much, spends too much and does nothing to create jobs,” said Senate Minority Leader Dean Skelos, R-Nassau County, who said, “The New York City Democrats went nuts on taxes and spending.’’
Details of the spending plan emerged Sunday after weeks of feverish behind-closed-doors negotiations among Paterson and legislative leaders, who claimed they could not have made tough decisions if the public was watching. The lack of transparency has drawn criticism from good-government groups.
Among the budget highlights:—Higher income taxes on married taxpayers who make more than $250,000 and some single taxpayers who make as low as $200,000. The rate will go up to 7.85 percent, from the current 6.85 percent, on all adjusted gross income over $250,000 and under $500,000 for those taxpayers. Income above $500,000 would be taxed at 8.97 percent.—No increase in operating aid to local school districts, but about $800 million more in federal aid for special-education programs.—Higher taxes on utility bills, some insurance policies and beer and wine and higher charges to register vehicles and renew drivers’ licenses, totaling about $1.3 billion.—The elimination of the STAR property-tax rebate program, costing residential property taxpayers $1.5 billion.—Imposition of a nickel deposit on bottles of water, with the state keeping 80 percent of the roughly $100 million in revenue.—Cuts of $2.3 billion to health care – less than the $3.5 billion Paterson originally proposed.—A cut of 8,900 state workers, mostly through layoffs, starting in July. The workers are slated to get a 3 percent raise on April 1.