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It's official: The three men in a room have opened the doors and let us all in on the budget deal they have been working on for days.
Governor David Paterson announced tonight that a deal has been reached with Senate Majority Leader Malcolm Smith and Assembly Speaker Sheldon Silver. The deal includes several spending cuts, a tax hike on the wealthiest New Yorkers and reforms to Medicaid that are being touted as necessary changes to the system.
"Over the last year, New York faced a historic fiscal crisis that tested our resolve. But by working together cooperatively with our partners in the Legislature, we made the tough choices necessary to address that challenge through shared sacrifice and responsible budgeting," said Governor Paterson. "The agreement we are announcing today closes the largest deficit in State history, stabilizes our finances, and institutes critical reforms that will help eliminate waste and inefficiency in our government. We have produced a budget that provides a solid foundation to move forward and address the challenges ahead. We have accomplished this with a budget that holds government accountable to the people of New York, and protects those who can not protect themselves."
There are several items in the budget that were cut, but then restored thanks to funding from the federal stimulus package. Some of these items include funding for public schools, which would have been slashed $1.1 billion under the Deficit Reduction Plan. But in the budget, there will actually be a $405 million increase in aid - a modest increase, but better than the original cut that was proposed.
There will be $2.3 billion in cuts to health care in New York, which is a lower figure than the proposed $3.5 billion in cuts that Governor Paterson was aiming for in his Executive Budget. Among items in the health care portion of the budget are reforms to the Medicaid hospital reimbursement system.
Here are some of the other highlights (you can also read the full list below the fold):
- The budget will expand the bottle bill, albeit slightly. So far, all that is being expanded is bottled water. Based on the summary given, that doesn't seem to include drinks like Gatorade, which do not have deposits on them. Even with the inclusion of bottled water, the state is expected to gain $115 million with that move.
In addition, the state will retain 80 percent of unclaimed deposits. In the past, bottlers kept 100 percent of unclaimed deposits.
- One of the more talked about changes this year is the STAR rebate program. The budget will eliminate the STAR rebate program along with the enhanced New York City STAR tax credit, which is a $1.5 billion savings to the state.
However, the STAR exemption program and the New York City STAR credit will remain in tact and still provide $3.3 billion in property tax assistance to New York's taxpayers.
- It's not Fair Share Tax Reform, but it's a lot better than nothing. Overall, the budget will produce $5.3 billion in revenues from taxes and fees. Among those taxes and fees are two new tax levels that will produce $4 billion in revenue. This is how it breaks down:
- From 2009 to 2011, married couples filing jointly will pay the following rates:
- Income over $300,000: 7.85 percent
- Income over $500,000: 8.97 percent
Again, you can read the full summary below the fold.
The budget is far from perfect. A lot of what was cut in Governor Paterson's proposal was still slashed, but it was also saved by the economic stimulus package funding the state received. Still, there are plenty of individuals and groups in this state that will be in quite a bind, including schools. So while having an on-time budget is a feel-good story, the impact of this budget still will leave plenty of New Yorkers hurting.
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