The Associated Press reports - “Assembly Speaker Sheldon Silver said late Saturday that New York’s Legislature has agreed to a 2009-10 state budget that will keep school funding flat, restore aid to New York City, and includes increased income tax rates for wealthier New Yorkers.

The agreement announced just before midnight also includes some restoration of proposed cuts in health care and in higher education and includes a bigger bottle law, putting nickel deposits on bottled water under the measure that currently covers only carbonated drinks.

The powerful Manhattan Democrat tells The Associated Press that the spending plan will likely be adopted Tuesday, resulting in an on-time budget.

There is no total yet for the budget but it will include $5 billion in spending cuts and use $5 billion of the federal economic stimulus package to help fill some of the gaps created by rejecting increases in some other taxes and fees.”

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“It is impossible to view the emerging budget as a path to economic recovery,” Business Council President Kenneth Adams said Friday before the final deal was struck. “This course will doom New York to lag the rest of the nation when the recovery begins.”

James T. Madore of Newsday writes - “State leaders hurried last night to wrap up negotiations on next year’s budget and meet Wednesday’s deadline for adoption.

The first of nine bills landed on lawmakers’ desks, allowing for the required three-day review period. At 1 p.m., 21 staffers sat in a Capitol hallway to proofread legislation.

Talks continued on issues from taxing the wealthy and revamping Medicaid reimbursements to property tax relief and aid to municipalities. A bailout of the Metropolitan Transportation Authority also was in the mix.

“Most issues are closed out or being closed out,” said Austin Shafran, aide to State Senate Majority Leader Malcolm Smith (D-St. Albans).

Dan Weiller, a spokesman for Assembly Speaker Sheldon Silver (D-Manhattan), added, “We hope to have most, if not all, of the bills on the desks and voting on Tuesday.” A spokesman for Gov. David A. Paterson concurred.

Sources said Senate Democrats were lobbying for restoration of state aid to school districts with high property taxes and tax relief targeted to low-income homeowners, both key for Long Island.”

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Kenneth Adams told Newsday, “”How will a budget with the biggest tax increase in state history lead us to economic recovery? … It will prolong the recession.”

The Buffalo News reports today - “Taxes and fees could rise more than $7 billion in the upcoming state budget, making it the biggest increase in New York’s history, the state’s chief business lobbyist warned Friday.

“How could the governor and Legislature impose the largest tax increase in New York State history in the middle of this deep recession, and how could they expect economic recovery?” said Kenneth Adams, president of the Business Council of New York.

He predicted such a large tax increase would hamper the state’s ability to recover from the current economic slide.

The increased tax levy includes: hiking income taxes on wealthier residents, boosting various business taxes, and hitting consumers on several fronts — from taxes on health insurance premiums to energy bills.

Those fees and taxes, if they occur, as negotiators at the Capitol are considering, are likely to boost state revenues by $7 billion, the business group estimates.

State officials continued their information blackout Friday, as they have been doing for weeks, saying only that the budget is not complete and any such estimates are premature.

The need for even more revenue grew Friday, as the two legislative leaders and Gov. David A. Paterson looked to restore some money for a variety of popular programs.

On Friday night, sources said, state officials were looking to raid federal Medicaid money that was destined to go to at least four counties, including Erie. With much fanfare, Paterson three weeks ago announced $2.7 billion in federal Medicaid stimulus money would be going to counties over the next 27 months, money to help lower property taxes. Erie was due to get $75 million of that.

Now, however, state officials want to take a portion from counties that run public hospitals: Erie, Westchester and Nassau counties, and New York City.”

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Calling it one of the Worst Budgets in State History, The Business Council of New York State release the following statement.

“Facing a budget shortfall of $16 billion and a profound economic crisis, the Governor and legislature have decided to throw fiscal responsibility out the window. This reckless budget ignores economic common sense, crushes New Yorkers with $7 billion in new taxes and slams the brakes on our hopes for recovery,” said Kenneth Adams, president & CEO of The Business Council of New York State.

“Just when we need private sector job growth to get New Yorkers back to work and lift us out of this recession, Albany leaders are telling NYS employers to take a hike — the largest tax hike in New York State history”, he added. “It is outrageous.”

“It is clear that this budget rejects key fiscal reforms that have broad-based support,” said Adams. “It is impossible to view this budget as a path to economic recovery. Businesses and jobs will hasten their departure from the state, and how can you blame them? Albany treats them with disdain.”

“Governor Paterson has called repeatedly for shared sacrifice, but this budget is clearly being balanced on the backs of New York’s businesses and their employees,” noted Adams.

“The current economic crisis has created an opportunity for our state leaders to make real reforms to reduce spending and fix New York’s structural deficit. They have wasted this opportunity,” said Adams. “Indeed, if they follow this path, New York will face yet another crisis in the coming months because we know our economy cannot sustain the level of government spending called for in this budget.”

The Business Council of New York State released the following statement on the budget.

“The Governor and legislature are poised to enact the largest tax increase in New York State history. It appears that the budget lacks badly needed reductions in spending and rejects key fiscal reforms that have broad-based support,” said Kenneth Adams, president & CEO of The Business Council of New York State. “It is impossible to view the emerging budget as a path to economic recovery.”

“State revenues are dropping like a stone, yet Albany’s leaders want to increase spending. This is a reckless and dangerous approach that defies fiscal logic. To burden all New Yorkers with billions of dollars in new taxes will make the current economic crisis worse and set back chances for New York’s recovery,” added Adams.

“The current economic crisis has created an opportunity for our state leaders to make real reforms to reduce spending and fix New York’s structural deficit. It appears that they have wasted this opportunity,” said Adams. “Indeed, if they follow this path, New York will be facing yet another crisis in the coming months because we know our economy cannot sustain the level of government spending called for in this budget.”

“This course will doom New York to lag the rest of the nation when the recovery begins. Our state will become even less competitive than it already is,” concluded Adams. “We urge the Governor and leaders to make the right choices and reduce spending rather than raise billions of dollars in new taxes in the middle of this terrible recession.”

The Daily News resports - “Gov. Paterson and legislative leaders are in final discussions on a plan to hike the state’s personal income tax.

Assembly Democrats are pushing a three-tier plan that would raise the top rate - 6.85% - on people earning more than $300,000 a year, lawmakers said.

Under the plan, people with annual incomes between $300,000 and $500,000 would be hit with a 7.97% personal income-tax rate, lawmakers briefed on the plan said.

Those making between $500,000 and $1 million a year would pay 8.47%, while those making more than $1 million would pay 8.97%.

The increases, which would expire in five years, are expected to generate $4 billion, lawmakers briefed on the plan said last night.

“Everything’s on the table,” Assembly Speaker Sheldon Silver said.”

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The Daily News reports - “U.S. stocks rallied, extending the market’s best monthly gain since 1974, on better-than-estimated earnings at Best Buy Co. and ConAgra Foods Inc. and prospects for lower labor costs at General Motors Corp.

Best Buy, the largest U.S. electronics chain, jumped 13 percent and ConAgra, maker of Banquet frozen dinners and Slim Jim meat snacks, rose 9.2 percent. GM climbed 14 percent after saying 7,500 union members signed up for buyouts. Research In Motion Ltd. gained 4.9 percent after Goldman Sachs Group Inc. recommended buying shares of the maker of BlackBerry phones.”

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James T. Madore of Newsday reports - “The leader of State Senate Democrats, who are holding up an MTA bailout, said yesterday that he and Gov. David A. Paterson might have found a way around the impasse.

“We think we may have a solution,” Senate Majority Leader Malcolm Smith (D-St. Albans) said after a private meeting with Paterson. However, he declined to discuss specifics.

Asked if the compromise includes controversial new bridge tolls and a payroll tax on employers, Smith said those and other options were “on the table.” He also said state leaders had not decided if the MTA rescue plan would be part of the state budget due April 1 or a separate bill taken up later.

He added, “We’re trying to be as creative as possible, but more importantly the first goal is to make sure the public doesn’t lose service, as well as having anybody lose their jobs.”

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The Business Council of New York State released the following statement.

“Proposed tax increases on insurers are a back-door way to fund a bloated state budget and put New York jobs at risk,” said Kenneth Adams, president & CEO of The Business Council of New York State.

Among several proposed insurance tax increases in the Executive Budget is an increase in what are known as Section 332 assessments. The intent of these assessments, as it is in many states, is to fund the operation of the Department of Insurance. They are paid only by “domestic” or New York-based insurers.

“Instead of funding regulatory oversight of the industry, these assessments have been increasing rapidly to pay for programs that have little or nothing to do with insurance regulation,” said Adams.

In 2001, the assessments were just over $101-million. In the proposed 2009-10 budget they would be more than $541-million, a five-fold increase in this tax alone.

“Business Council members in this industry report that they have seen their tax bill triple in the last three years. Increasing the tax burden on one economic sector this dramatically takes away money that could be used for new jobs, investment and growth,” said Adams. “These taxes will put these New York companies at a competitive disadvantage. Firms that have been headquartered in New York for more than a century will have to reconsider where they can grow in the future.”

The life insurance industry is one of the most important in New York. Companies maintain headquarters across the state, in New York City, Binghamton, Albany and Syracuse. The life insurance industry directly employs 30,000 people and creates another 45,000 indirect jobs in other sectors of the New York economy.

New York health insurers directly employ approximately 35,000 people. And New York property-casualty insurers employ thousands more.
“This industry has seen constant tax increases in recent years. The multiple tax proposals in this budget should be rejected. Imposing these new taxes could cost New York good jobs,” said Adams.

A Poughkeepsie Journal editorial states - “Gov. David Paterson has definitely shaken up stalled budget negotiations, but whether he’ll actually cut nearly 9,000 jobs from the state work force as he is vowing is not a sure bet.
The governor is, at least, serious about holding down spending this year, and he has to be. The state faces about a $16 billion budget shortfall, and he has repeatedly asked for public employee unions to make cost-cutting concessions.

The unions need to recognize they are not immune from the teetering economy around them. Yet, rather than holding off on raises or accepting a few days or even weeks off without pay, etc., the unions would rather run the risk of seeing some of its members lose their jobs. The strategy could backfire.

Paterson’s plan may be a bit rash, and there were ways, plenty of ways, for the state to achieve this workforce reduction over the years. The cuts are projected to save the $481 million over two years. The state could have been saving this money all along. Instead, state government has gotten more bloated, annually growing at nearly twice the rate of inflation most of the last decade.

Meanwhile, study after study, report after report has shown how the state could have saved money by consolidating prisons, reducing the number of authorities and making necessary reforms to a far-too-generous pension system.

All of these pleas were virtually ignored. Instead of keeping costs down and socking some money away for an eventual economic downturn, the state has spent itself into considerable debt and now has a budget deficit that can’t be ignored.”

To read the rest of the editorial click here.