Monday, March 26, 2007

Sides move closer on state budget


Despite breakthroughs Friday, talks bog down on tax relief, hospital funds

(March 26, 2007) — ALBANY — With the state budget due in a week, negotiators for Gov. Eliot Spitzer and the Assembly and Senate majorities failed to reach critical agreements Sunday.
Closed-door talks were scheduled to continue today, although all sides agreed even a deal early in the week might not leave enough time to print budget bills and approve them in both chambers to pass an on-time budget. The budget is due next Sunday.
Despite apparent breakthroughs Friday night, negotiators were again bogged down Saturday and Sunday on issues that were being negotiated as a package. That means there is no agreement on one issue until there is agreement on all, said officials close to the governor and the legislative majorities.
"Our concern has been and continues to be a fair and equal distribution of school aid and property tax relief for the most taxed residents in the country and health care restorations to prevent the pain and suffering of the (Spitzer) budget proposal out there now," said John McArdle, spokesman for Republican Senate Majority Leader Joseph Bruno. "Staffs are still talking and we continue to press for open conference committees."
There was no immediate comment from spokesmen for Spitzer or Democratic Assembly Speaker Sheldon Silver.The Legislature has passed on-time budgets in the last two years after 20 straight years of missed deadlines. Late budgets create fiscal uncertainty for school district officials and delay funding for nonprofit groups that run social service programs.
Three key negotiation issues remain:
How many suburban schools on Long Island and elsewhere will get greater increases in aid despite Spitzer's plan to direct far more of the funding increases to high-needs urban schools.
How to distribute more than $1 billion in property tax relief.
How much aid should be "restored" to hospitals and nursing homes to ease Spitzer's health care reform.
All sides acknowledge room for compromise in the key areas.Specifically, Spitzer last week said he is more committed to driving property tax relief to middle-class families than he is to how it is done. That means he is open to the Senate Republicans' proposal for rebate checks sent directly to taxpayers rather than Spitzer's original plan to increase funding for the state's STAR program.
Spitzer may also be open to changes in his school funding program so that wealthier but highly taxed school districts on Long Island get more than his minimum increase of 3 percent, according to a Spitzer official close to negotiations. The Senate GOP wants to add $538 million for these schools, most of which are in the conference's Long Island power base.
Senate Republicans who have fought Spitzer's $1.4 billion cut in the $45 billion Medicaid system may end up accepting some of Spitzer's reforms if he agrees to phase in his program so big hospitals and nursing homes don't face immediate 1 percent to 5 percent cuts in state aid.
Spitzer proposed a $120.6 billion budget in January. That's an increase of 7.8 percent — more than twice the inflation rate.

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