Tolls on bridges into Manhattan are off the table as Gov. Paterson and legislative leaders try to come up with a financial bailout package for the MTA, the governor said today.

“The Senate has really eliminated what my choice would be, which would be to have tolls,’’ he said after emerging from a closed-door meeting with legislative leaders.

Paterson initially backed a plan that would impose a new employment tax on all businesses in the MTA region (including Westchester, Rockland, Dutchess and Orange counties, besides the city and Long Island), higher train, bus and subway fares and a toll on the bridges.  Assembly Speaker Sheldon Silver backed a similar plan.

But Senate Majority Leader Malcolm Smith, D-Queens, couldn’t muster the votes for it because of opposition of some of his members to the tolls. So now, the governor said, the trick is to find some other source for the billions the tolls would have generated.

Absent a bailout plan, the MTA plans to raise fares sharply and cut service starting this summer.

Silver said the leaders are working “desperately’’ to come up with a deal.  But nothing yet.

   Adoption of a state budget got snarled today in the state Senate before the process even started.

   Republicans so far haven’t shown up for a legislative session that was supposed to start at 9:30 a.m. A Republican spokesman said the minority members were waiting for information about aid to local school districts and other data before considering whether to vote for the bills.

   But the Democrats think the Republicans are weighing whether to just try to delay the process and capitalize on the anger at higher taxes and spending increases that the public has been displaying since the $131.8 billion budget deal was announced on Sunday.

   Republicans, who hold 30 of the 62 Senate seats and are in the minority this year for the first time since 1965, also might want to deny Democrats the bragging rights of getting a state budget passed before the midnight tonight deadline.

   Passage of the budget is expected to go much smoother in the Assembly, where Democrats have a 109-41-seat majority over Republicans.

   Senate Democrats issued a point-by-point description of the proposed budget this morning, saying it’s the first time a breakdown by budget area has been uploaded on the Web by the Senate.

—Jay Gallagher

   The Campaign for Fiscal Equity and the Alliance for Quality Education have asked Arne Duncan, the United States secretary of education, to intervene in New York’s budget process because the state doesn’t plan to use federal stimulus money to increase foundation aid to school districts. The federal statute requires that the funds be distributed through the state’s primary education formulas, the groups said, and the proposed budget “appears to be in violation.”

   “We are asking you to intervene immediately to ensure that the budget scheduled for a vote tomorrow not be allowed to supersede or circumvent federal intent and requirements to fund ‘equity and adequacy’ in the distribution of (stimulus) funds to school districts,” said the letter, signed by Billy Easton, head of the Alliance for Quality Education, and Geri Palast, executive director of the Campaign for Fiscal Equity. 

   The $131.8 billion budget, which will be voted on by lawmakers this week, would delay a schedule for increasing school aid by $7 billion. The four-year plan, which was adopted in 2007, would be implemented over seven years instead of four. Lawmakers and the governor added the money to resolve a longstanding lawsuit over education equity in New York City. New York reworked the formula for school foundation aid, the largest state education grant, to target needy school districts around the state. In the last two years, 37.5 percent of the total foundation aid increase was distributed to districts.

   The Campaign for Fiscal Equity and Alliance for Quality Education want a larger portion of the state’s stimulus funds on foundation aid in 2009-10, and they are asking that the deferral of the phase-in not be allowed. They want at least one year of the foundation formula phase-in to be funded over the next two years.

   If approved by the Legislature, the $131.8 billion state budget will restore $30 million for the Comprehensive Attendance Policy mandate on religious and independent schools. Gov. David Paterson originally proposed eliminating the program, which requires teachers to take attendance whenever students move about during the school day. In an amendment to his budget recommendation, the governor reversed his decision to call for the mandate’s elimination but did not include any money to go with it.

   Getting rid of the Comprehensive Attendance Policy would have saved the state $44 million in 2009-10. The $30 million would be 68 percent of the $44 million.

   The Catholic Advocacy Network in the state has advocated for restoring the program and funding for it.

   The Legislature will be voting on the budget this week. The 2009-10 fiscal year begins Wednesday.

Here’s some of the comments coming in about the 2009-10 budget.

Senate Minority Leader Dean Skelos, R-Nassau County: “Governor Paterson and I agree on one thing – this budget doesn’t make sense. The governor’s moment of candor during his news conference today was honest and appropriate because this budget doesn’t make sense for the people of this state, no matter how the Governor tries to spin down the impact of massive tax hikes and runaway spending.”

Andrew Scherer, executive director of Legal Services NYC: “Because state leaders had the courage to ask wealthy New Yorkers to do their part and pitch in during this critical time, they were able to restore funding to civil legal services for thousands of New Yorkers facing foreclosure and eviction, seniors struggling to get their SSI benefits, and New Yorkers fighting to get unemployment, disability, welfare, and other benefits.”

Josh Cohen, NY Library Association president and Director of the Mid- Hudson Library System in Poughkeepsie over cuts to libraries: “Library usage is up by double digit numbers and yet state aid continues to be cut. There appears to be a disconnect somewhere in the state budget process.”

Brian Sampson, executive director of Unshackle Upstate: “We are in the midst of an economic crisis of major proportions. Rather than take progressive steps toward making New York more business-friendly to spur private sector investment and job creation, this budget does the opposite.”

Daniel Sisto, president of the Healthcare Association of New York: “This health care budget plan contains cuts far greater than what our members can absorb without reducing services and laying off staff. We are therefore compelled to issue to the State Legislature a memorandum of opposition to the plan.”

Westchester County Board of Legislators Chairman Bill Ryan added Legislator James Maisano, a New Rochelle Republican, to the Westchester Economic Recovery Task Force. Its first meeting is 10:30 a.m. Tuesday.

Maisano had been critical of the chairman for not including any Republicans or business members.

“I am please to accommodate Jim’s expressed interest in serving on this important special committee,” said Ryan, a Democrat. “His desire to contribute to this important undertaking is greatly appreciated.”

Maisano joins Legislators Tom Abinanti, task force chair, Peter Harckham, Ken Jenkins and Martin Rogowsky.

Ryan created the legislative task force to help turn Westchester’s economy around and maximize the amount of federal stimulus money the county gets. The task force is expected to work with local governments, business groups, non-profits and the public.

 The Westchester County Republican Committee is expected to nominate Rob Astorino tonight as the party’s choice for county executive.

The committee is holding its annual nomination convention for that office at 7 p.m. at the Crowne Plaza in White Plains — the event is open to the public.

In an announcement, Westchester GOP Chairman Douglas Colety said the party is “mounting a serious challenge to oppose a three-term incumbent” and with enormous economic challenges facing the county, Republicans are poised to return “fiscal discipline to county government.”

“The incumbent’s record of out-of-control taxing and spending over 12 years is clear and has spurred a near-revolt of Westchester taxpayers,” Colety said.

You can watch Gov. David Paterson explain the reason for at least $5.3 billion in new taxes and fees and a nearly 9 percent spending increase as part of the state budget at 11 a.m. here.

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.

A 2009-10 state budget was expected to be printed late Saturday in an effort to get it passed by Tuesday’s deadline, with lawmakers planning to increase income-tax rates on individuals who make more than $250,000 and households with incomes of more than $300,000 a year.

Without releasing the details publicly, legislators and Gov. David Paterson have coalesced around a plan to raise $4 billion in revenue through new income-tax brackets ranging of $250,000 and $500,000, according to lawmakers and aides.

The agreement, which some officials warned was still subject to change before the final budget bills were adopted, closely mirrors a proposal put forth by Assembly Democrats last week as a way to help the state close a $16 billion budget gap in the 2009-10 fiscal year, which starts Wednesday.

The plan is part of hundreds of pages of budget bills that legislative aides and the governor’s office were hoping to print Saturday night, allowing them to age three days in order for passage starting Tuesday at the Capitol.

The governor’s office declined Saturday to discuss the details of the budget. Budget negotiations have been conducted behind closed doors, drawing criticism from good-government groups and Republicans, who are in the minority in both houses of the Legislature.

“All parties have been working hard to finalize the budget and to begin the printing process so it can be voted on starting Tuesday,” said Jeffrey Gordon, a spokesman for Paterson’s budget office.

Raising income taxes on the wealthy has been pushed by Democratic lawmakers for months, but Paterson had resisted, saying it would lead people to flee the state and wouldn’t help the economy rebound.

Yet the Democratic governor in recent days said the state’s fiscal woes are expected to worsen and signaled a change in position, saying Friday that any further cuts to services would be “life threatening.” He warned that the state’s budget gap may still grow by another $3 billion.

Raising income taxes is expected to be among a variety of new taxes and fees to help close this year’s budget gap. State leaders have agreed to using about $6 billion in federal stimulus aid to close the gap, as well as making cuts of about $6.5 billion, according to state officials.

After initially being met with opposition, a plan to charge a 5 cent deposit on bottles of water was also added back to the budget, which is estimated to bring in about $100 million in revenue to the state. A portion of that revenue is expected to be used to replenish a fund dedicated to environmental initiatives, officials said.