- Associated Press - Wednesday, January 22, 2014

ALBANY, N.Y. (AP) - Gov. Andrew Cuomo proposed an election year budget of $137.2 billion that he says keeps a tight leash on spending increases even as it provides business, property and estate tax relief.

Cuomo in releasing his budget Tuesday said he intentionally supplemented his spending plan with policy proposals ranging from strengthening anti-corruption laws for public officials to protecting medical patients from surprise out-of-network bills. The budget essentially spells out the Democratic governor’s agenda for the legislative session.

“This budget will enact a specific action agenda - more policies and program developments than in previous years,” Cuomo said.

The budget proposal projects increases of 4.6 percent for federally and state funded Medicaid, to $58.2 billion, and 3.8 percent in aid for schools, to $21.9 billion. It keeps many other spending lines flat, including $714.7 million in state aid to cities, towns and villages.

In education, the governor wants to spend $1.5 billion to establish statewide prekindergarten programs over the next five years while spending $720 million to expand afterschool programs. A $2 billion bond act subject to voter approval in November would bring broadband and computers to classrooms.

He would cut the tax rate on net corporate income from 7.1 percent to 6.5 percent, establish a 20 percent real property tax credit for manufacturers and eliminate net income tax on upstate manufacturers. He would raise the estate tax exemption from $1 million to $5.25 million while cutting the top rate from 16 percent to 10 percent.

The budget proposes a two-year property tax freeze through state rebates to homeowners in local jurisdictions that stay within a 2 percent tax increase limit.

Cuomo’s proposal kicked off months of negotiations in which the governor and state lawmakers will try to extend their three-year streak of reaching a final budget deal by the start of the state fiscal year April 1.

Cuomo has said the state can amass a $500 million surplus this coming year if lawmakers agree to limit spending increases to 2 percent. The governor said that would allow surpluses to grow to $2 billion in three years.

But E.J. McMahon, of the fiscally conservative Empire Center, said that adopting the budget wouldn’t lead to the $2 billion surplus Cuomo proposes using to offset the tax cuts - while calling it a fine goal. Instead, by traditional measures, it has budget gaps of $1.6 billion in 2016, $2 billion in 2017 and $3 billion in 2018.

“He has basically changed the rules,” McMahon said. “It’s like a coach saying we’ve not only won more games, we’ve already scored 30 more points, when it’s actually his goal to score 30.”

Counted separately from the budget, the administration also estimates another $2.4 billion in federal recovery funds for rebuilding from Superstorm Sandy and $2.5 billion for New York’s implementation of the federal health insurance overhaul law.

Lawmakers are likely to seek some changes to the spending plan in the coming months. State Senate Republican leader Dean Skelos immediately disparaged Cuomo’s inclusion in the budget of public financing for elections, saying he thinks New Yorkers would rather see public money go into education and infrastructure as opposed to so-called campaign robocalls.

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