ALBANY - Gov. David A. Paterson and legislative leaders have reached agreement on a 2009-10 budget that maintains school aid at this year's levels, eliminates the popular STAR property-tax rebate checks and temporarily raises income taxes on households earning more than $300,000.
Aides to Paterson, State Senate Majority Leader Malcolm Smith (D-St.
Albans) and Assembly Speaker Sheldon Silver (D-Manhattan) confirmed
Sunday that a deal was reached late Saturday night, though the budget's
actual size still isn't known. This year's spending plan totals $120
The leaders, all Democrats, are rushing to meet Tuesday's deadline for
budget adoption. If they succeed, it will be only the third time in 25
Negotiations occurred as the economy sunk further into recession and
the state's budget deficit climbed to a record $16.2 billion.
Still, elimination of the popular STAR rebate checks is sure to anger
hard-pressed homeowners, particularly on Long Island. The checks, long
supported by the then-Senate Republican majority, sent $1.4 billion
back to taxpayers, offsetting ever higher school levies.
The income tax surcharge on households earning more than $300,000 would
expire in three years. It mirrors a similar temporary charge on the
incomes of millionaires enacted after the Sept. 11, 2001 terrorist
The new plan would raise the top income tax rate to 7.85 percent for
households with more than $300,000 and less than $500,000 per year. The
rate would increase to 8.97 percent for those earning more than
$500,000. The highest rate now is 6.85 percent.
The agreement uses federal stimulus aide to restore Paterson's proposed
$1.1 billion cut to school aid. But some school districts may have to
raise property taxes or lay off staff because they had anticipated
higher aid levels.
Smith and Silver also restored some unspecified reductions in health
care, and aid to municipalities was maintained at this year's levels.
Given the recession, there are few new programs in the 2009-10 budget
with the notable exception of $50 million in college loans for low- and
The bottle recycling law was expanded to include water bottles but not
juice containers. Special provisions were made for small stores at the
insistence of Senate Democrats.
And in a blow to North Fork vintners, the push to sell wine in grocery stores was defeated.
There also will be no increases in sales and gasoline taxes. But other
fees and taxes were included, such as a new marine fishing license.
In addition, the budget lifts the basic welfare grant by 10 percent, the first increase in years.
"This is a very difficult budget that reflects the extraordinary
challenges we face," Silver told The Associated Press on Saturday night.
Spokesmen for Paterson and Smith concurred Sunday.
NY Legislature Agrees to State Budget
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