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March 28, 2013

State set to approve budget

Some local officials question option to defer pension costs

By JOE MAHONEY
The Daily Star

---- — New York lawmakers are poised today to adopt a $135 billion state budget that boosts the minimum wage, sends $350 rebate checks to families with children just before the 2014 elections and gives counties a new option for dealing with rising pension costs.

The budget bills were passed by the state Senate early Wednesday, and the Assembly is expected to follow today. The budget calls for higher fines for those who use their smartphones while driving — with a fine of $150 for a first offense, $200 for a second offense and $400 for a third offense in 18 months.

Pleased with the spending blueprint, Gov. Andrew Cuomo took to the radio airwaves to quote from an oft-heard line in the popular reality television show “Duck Dynasty, declaring, “I am hap-hap-happy” that the budget will be finalized on time.

To balance the budget, the spending legislation advanced by Cuomo includes an extension of the so-called millionaires’ tax that raises $2 billion annually. Cuomo had been against a higher tax rate for the wealthy, but altered his position in late 2011 after polls showed public support for the higher bite into the coffers of the state’s most affluent earners.

The state’s fiscal 2013-14 fiscal year begins Monday, and if the budget is adopted today, lawmakers will be able to leave the Capitol before the windup of the Passover and Holy Week days of religious observation.

Assemblyman Pete Lopez, R-Schoharie, said while he has reservations with some aspects of the budget, he will likely support much of it.

“Certainly, all of us understand the need to exercise budget discipline,” he said, “and this budget attempts to do that. It attempts to make sure we are not spending beyond our means.”

Lopez said the decision on how to vote on individual bills is often complicated by the smorgasbord of items tucked into each measure. 

“The bills are crafted intentionally to make votes more difficult for the members,” he said. “There will be some things that will be very good, and some thing that are intentionally inserted into them that we are not happy about.”

For instance, Lopez said, he will be scouring the legislation to identify any spending for the administration of the controversial gun control legislation known as the SAFE Act, which was pushed through in January by Cuomo. Approximately 50 upstate counties have gone on record in opposition to that measure, arguing it impinges on the rights of those who lawfully own guns.

The Schoharie County Board of Supervisors earlier this month passed a resolution urging Lopez and state Sen. James Seward, R-Milford, to vote against any spending that would be poured into administering the new law.

Lopez said he was also troubled by what he called a $1.75 billion raid on a pool of workers’ compensation funds, using that money to balance the overall budget. That budget maneuver has also been blasted by the construction industry lobby, which contends that if the state Insurance Fund is overly capitalized, the excess money should be returned to the policy holders who paid the premiums.

Under the new budget, New York’s minimum wage, set now at $7.25 an hour, would gradually increase to $9 an hour by 2016. The wage floor would rise to $8 an hour by year’s end, and then go to $8.75 an hour at the end of 2014. The boost to $9 would kick in at the end of 2015.

The higher minimum wage emerged from compromise with Senate Republicans, who succeeded in a push for tax breaks for businesses that employ young people and veterans.

The pro-labor Fiscal Policy Institute criticized the tax breaks for businesses, saying taxpayers will end up subsidizing most of the cost to businesses that will result from the higher minimum wage.

The tax rebate program included in the budget package was targeted at middle class New Yorkers, the most influential voters at election time. Under the program, households with children less than 18 years of age and with incomes ranging from $40,000 to $300,000 annually would receive a $350 rebate by Oct. 15, 2014, just a few weeks before the general election. The so-called middle class tax cut would reduce state revenues by $1.1 billion over three years.

The new budget framework also gives struggling counties saddled with rising public employee pension obligations a new option of deferring payments to the pension system in the short term, while extending the payback period to 12 years.

However, both Otsego County acting Treasurer Russ Bachman and Schoharie County Treasurer William Cherry voiced strong reservations with the new option.

“You’d be taking current expenses and turning it into a liability that you’d be paying at a future time,” Bachman said.

“You’re basically mortgaging the future,” Cherry said. “The retirement system is going to get their money one way or the other. You’d be kicking the can down the road. All it does is add interest to your cost.”

Groups advocating for greater transparency in government criticized lawmakers for hatching several significant budget deals behind closed doors. The Senate passed a number of bills in the pre-dawn hours of Wednesday, prompting one legislator, Sen. Terry Gipson, D-Rhinebeck, to suggest his colleagues were acting on “vampire bills.”

Delaware County Social Services Commissioner William Moon said it will likely take days for the public to gain a full understanding of the many details in the thousands of pages of budget bills.

Moon said public assistance programs — at least from early reviews — are apparently being spared of the cuts they have consistently taken over the past five years.

“These bills are passed in such a a fast and furious way that it makes it very difficult for people running major programs and who can’t send a staff person to Albany to really know what’s in them,” he said. “I’ll probably be able to get up to speed in a week or so. One thing I can say is that when they start restoring some of our funding that will be a day to cheer.”