Easter Weekend Begins a Groggy Stretch Run for Lawmakers Aiming to Meet Budget Deadline

ALBANY – Governor Pataki has appeared to ease up on his Ahab-like quest for a timely budget. Though he urged legislators and their staffs last week to spend the weekend at the Capitol, even after many claimed to have been working for days on end without sleep, the governor spent the past two days in New York City.Legislative staff members dressed in jeans and jogging pants passed in and out of the Capitol on Saturday, but were scarce on Easter Sunday. The Assembly speaker, Sheldon Silver, a Democrat from Manhattan who is Mr. Pataki’s chief antagonist in budget talks, publicly refused to meet with the governor Friday night, saying he did not wish to be lectured. The Senate majority leader, Joseph Bruno, a Republican from Rensselaer, told Mr. Pataki his staff needed sleep.Heading into the weekend, lawmakers had completed a richer alternative to Mr. Pataki’s $105.5 billion budget. Messrs. Bruno and Silver said they had approved their own $106.5 billion spending plan. If the April 1 budget deadline is to be met, the governor has until Thursday to review the proposal, resubmit budget bills accordingly, and win their approval – a process he has said would take several days to complete. Mr. Pataki maintains that the Legislature’s budget is far more expensive than advertised.As is, the legislative budget increases funds next year for New York City schools. On mass-transit spending, revenue sources for the Legislature’s $17.9 billion proposal remain unclear. The governor had proposed spending $19.2 billion on transportation.The Legislature avoided increasing taxes on businesses in New York and approved a change to the state’s corporate tax laws that is expected to save instate businesses $130 million a year after a three-year phase-in.On education, legislators added $314 million to Mr. Pataki’s proposal to spend $525 million more this year than last year. Lawmakers agreed the money should go to poorer school districts, but were divided on the formula that would be used to apportion it among Long Island, New York City, and upstate school districts. Mr. Pataki is appealing a decision by a state court that mandated state increases of $5.63 billion in operating spending and $9.2 billion in capital spending on public schools in New York City over the next four years.On transportation, legislators agreed to put $2.9 million in new borrowing up for a statewide referendum in November. If approved, half the money would go to the Metropolitan Transportation Authority and the other half for upstate roads and bridges. Legislators also said they rearranged projects in such a way as to draw more federal subsidies for transportation, increasing federal aid to $5.8 billion from $4.5 billion. Legislators failed to come up with revenue sources for roughly $3 billion of their transportation plan, however, leaving open the possibility that a tax or fee increase would be negotiated in private.One tax increase lawmakers rejected was a proposed surcharge on business income for unincorporated businesses in the MTA’s 12-county service area.Lawmakers also agreed to change the tax formula for corporations, eliminating taxes based on sales, in-state employee numbers, and infrastructure, and replacing them with a single tax on in-state sales. Business leaders had been pushing for a so-called single sales factor in New York for years, to no avail. The new formula is thought to decrease the incentive for companies to outsource jobs.Lawmakers agreed to continue the state’s annual 14-day exemption from sales tax on clothing and shoe purchases of $110 or less, with a permanent reinstatement of the exemption to begin in April 2006. The governor had proposed a 14-day exemption from sales tax on shoe and clothing purchases less than $250.Lawmakers rejected a proposed acceleration of the phase-out of the temporary surcharge on high-income individuals in the state. The current rates are set to expire at the beginning of 2006.Lawmakers rejected a proposed economic-development program aimed at upstate businesses but expanded the state’s Empire Zone program.They agreed to cap the growth rate in county spending on the state’s $44.5 billion Medicaid program at 2005 levels. That proposal was hailed by county executives, who say Medicaid is ruining their finances. The cap is expected to save counties $3.3 billion a year after it is fully implemented. Erie County, which blamed 2,000 job cuts earlier this year on Medicaid costs, would save an immediate $15 million, lawmakers said.Messrs. Bruno and Silver said they would begin introducing budget bills outlining last week’s agreements throughout the day today. If Mr. Pataki refuses to accept the bills, legislators are likely to blame him for holding up the first on-time budget since 1984.Mr. Bruno told Mr. Pataki last Thursday that the process had sped along this year largely because of the governor. “We are as far as we are because of your leadership, governor,” Mr. Bruno said.

Easter Weekend Begins a Groggy Stretch Run for Lawmakers Aiming to Meet Budget Deadline

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