Officials: State budget will be late

March 31, 2008 8:45:00 PM PDT
A $124 billion state budget proposal due at midnight Monday won't be passed until later this week, creating the latest state budget in three years, according to Assembly and Senate officials.The Assembly wasn't expected to vote on its first budget bills until late Monday night and all the bills won't likely be done until Wednesday, said two officials in the Democrat-controlled Assembly. In the Republican-controlled Senate, budget bills, many of which must be approved by the Assembly first, aren't expected to be passed until Thursday or Friday, according to a Senate official.

The officials spoke on the condition of anonymity because their leaders hadn't conceded that the 2008-09 budget will be late.

But unlike past years when partisan disputes made budgets weeks and even months late, this year has some special circumstances. Chief among them is that the governor who drafted the proposal in January, Eliot Spitzer, resigned March 17 after he was implicated in a prostitution investigation. His lieutenant governor, David Paterson took over. But he then revealed some past extramarital affairs, saying he didn't want to be blackmailed into decisions as governor.

The result was at least five days in critical budget crafting and negotiations was lost while the transition to a new administration, usually two months in the making, was reduced to days.

"I think that under the circumstances, they have been working hard to comply with the constitutional deadline," said Elizabeth Lynam of the independent Citizens Budget Commission. "A few days isn't going to make that much difference."

There was no immediate comment from Republican Senate Majority Leader Joseph Bruno or Democratic Assembly Speaker Sheldon Silver.

If the budget is late by just a few days, there is little harm to school districts, nonprofit agencies and the many businesses that rely on state funding or services. But the longer the budget remains open to negotiations, the worse the forecasts for revenues become and the less that can be spent.

The budget proposal being negotiated would increase spending 4.4 percent by raising some narrow taxes and fees.

Some of the possible items in the 2008-09 spending plan include a doubling of the cigarette tax to $3 a pack, no pay raise for legislators or judges, and a requirement that Internet retailers such as Amazon.com collect state sales taxes on purchases made in New York.

An on-time budget had become a kind of brass ring for Paterson and lawmakers. They hoped agreement on a budget in dire economic times with a nearly $5 billion deficit would help put a month of unprecedented scandal behind them.

"We have a conceptual agreement, as you know, and we're just trying to keep that intact," Bruno told reporters Monday, a day of frustration and uncertainty in Albany. He referred to the general agreement announced Sunday with Paterson and Silver, but which failed to gain quick approval by the rank-and-file.

Despite promises to make budget talks more open and transparent, legislative leaders and the new governor kept details of the 2008-09 budget secret Monday. In Albany, such secrecy has been common when leaders feared lobbyists could unravel the vote in the Senate and Assembly.

Lobbyists, meanwhile, continued their last-ditch pitches.

On Monday, in a driving freezing rain, hundreds of prison guards rallied loudly at the Capitol steps to stop a measure that would close a medium security prison and three minimum security prisons, threatening their jobs. The proposal by former Gov. Spitzer would save taxpayers $33.5 million a year and avoid $30 million in capital costs while the prison population drops.

The New York State Correctional Officers and Police Benevolent Association union rallied and attracted several supportive Republican senators and assemblymen who blamed the closing proposal on Spitzer, who resigned this month when he was implicated in a prostitution scandal.

"Client No. 9!" some prison guards shouted when Republicans' mentioned Spitzer, to the Republicans' delight. It was a reference to how the former Democratic governor was identified in the federal investigation leading to his resignation this month.

The union members would find out after the television news cameras left that the proposed budget deal had already spared their jobs. Bruno issued a press release saying the proposal excludes the closing of Camp Pharsalia in Chenango County, Camp McGregor in Saratoga County, Camp Gabriels in Franklin County and Hudson Correctional Facility in Columbia County. The three camps are about half full, while Hudson is near capacity. In all, 584 full- and part-time workers watch 939 inmates.

Other lobbyists seeking more school aid or the higher cigarette tax also continued to work the Capitol's halls, seeking information through the secrecy of the budget process. Others, like Philip Morris USA, offered reporters surrogates such as convenience store chains that employ hundreds of workers to warn a cigarette tax would cut business by 10 percent.

Bruno confirmed a cigarette tax increase was proposed, but how much was secret and possibly still part of negotiations Monday afternoon. The original proposal doubled the cigarette tax to $3 per pack.

The lack of funds for judges' raises drew fresh criticism and a threat from the state's highest judge, Chief Judge Judith Kaye.

"We will, if necessary, bring a lawsuit to resolve this crisis. It pains me beyond any words I can think of," Kaye said. The last raise for state judges was in 1999.

"I don't make nearly as much today as I made 25 years ago," Kaye said. "I'm not looking for millions of dollars in compensation. I know where to go if I want to earn big bucks, but I don't. I want to be a judge, I want to be in public service."

Her $156,000 salary is about the same as a first-year attorney gets after passing the bar exam.

Legislative officials said the following fees and taxes were also part of the proposal as of Monday:

-Some closing of corporate tax loopholes, which could cost banks and, eventually, consumers.

-$245 million in additional funding to nursing homes and hospitals that Spitzer had cut.

-A capital program that had been expected to be about $1 billion.

-A requirement that Amazon.com and other Internet retailers collect sales taxes when items are purchased. Currently, New Yorkers are on a kind of honor system that is hard to enforce.

The difficulty of the negotiations, held behind closed doors throughout the weekend, was clear by the frustration among rank-and-file lawmakers who thought they had shed the criticism that they couldn't pass a budget on time. It's an image that has haunted incumbents in election years, like this one.

The Legislature and Gov. Eliot Spitzer missed an on-time budget by hours last year, after a budget was passed on time the previous two years. Before that, the budget was late 20 straight years.


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