N.Y. Budget Adds $1.50 to Cigarettes

NEW YORK -- City leaders struck a $42.3-billion budget deal Wednesday night designed to close a $5-billion shortfall in the wake of an economic recession and the World Trade Center attack.

Negotiators for the City Council and Mayor Michael R. Bloomberg agreed on a package to raise $400 million in new revenues by increasing the cigarette tax, fees on cell phones and fines for parking tickets.

Another group of provisions that would have included a commuter tax and an absentee-landlord tax, which had been advanced by the council but opposed by Bloomberg, was not part of the deal, according to city officials.

The tentative pact, which still requires approval of the full City Council, concludes months of often tense negotiations between the Bloomberg administration and council to find ways to bridge the budget gap, which was exacerbated by the Sept. 11 terrorist attack. Council approval is expected later this week.

“Despite the tremendous challenges we faced this year we were able to fulfill our responsibility to this city by passing a budget that is fair, compassionate and does more with less,” Bloomberg said.

City Council Speaker Gifford Miller called the deal “the first step in a long road toward restoring fiscal stability in this city.”

The resolution of budget negotiations comes after the city missed two deadlines this month to pass a spending plan.

The budget relies heavily on borrowing and cuts to programs and city agencies, including the police and fire departments.

The plan minimizes cuts to cultural institutions.

It also calls for glass and plastic recycling to be rescinded for a year, but maintains metal and paper recycling.

The only tax increase is the levy on cigarettes, which will go from 8 cents to $1.50 per pack, bringing the total price to almost $7.