New York State Budget Deal to Include Minimum Wage Hike and $1B Tax Cut

A tentative deal on the New York state budget includes a minimum wage hike as well as $1 billion in middle-class income tax relief, Gov. Andrew Cuomo said Wednesday as lawmakers seek to strike a budget deal ahead of a crucial Friday deadline.

The wage would increase from $9 to $15 in New York City within three years. Elsewhere in the state the phase-in would take longer, and after three years the state could halt the increases in the event of an economic downturn.

"We want to raise the minimum wage to a wage where a person can support a family with dignity and succeed," the Democratic governor said. "But we want to do it in a way that stimulates the economy and certainly doesn't hinder the economy."

The roughly $150 billion budget agreement with legislative leaders also includes $1 billion in income tax relief for the middle class, spread over five years. The cut would be available to joint filers making up to $300,000.

Legislative leaders will now take the plan back to rank-and-file lawmakers to see if it has enough support for a formal vote. Officials hope to approve a budget before the start of a new fiscal year on Friday.

"We are not there. We'll get there," said Senate Leader John Flanagan, a Republican from Long Island, following another round of closed-door negotiations with Cuomo Wednesday morning.

One remaining sticking point is Cuomo's proposal to cut hundreds of millions of dollars of Medicaid expenses for New York City. The Assembly's Democratic majority opposes the plan.

"For us in the Assembly what happens with Medicaid is a very big issue," said Speaker Carl Heastie, a Bronx Democrat. "It's still not resolved."

In January, Cuomo proposed gradually raising the minimum wage to $15 by the end of 2018 in the city and by mid-2021 elsewhere in the state. The decision to reassess the upstate phase-in after three years — when it would be $12.75 under Cuomo's plan — is a concession to Senate Republicans concerned about the effect of such a sharp increase on businesses' labor costs.

The $1 billion tax cut, which was not in Cuomo's original budget, comes after Senate Republicans proposed $3.5 billion in middle-class tax relief. Assembly Democrats had proposed a separate, $450 million tax cut for middle-class and low-income residents.

The public and lawmakers will likely have little time to study the budget deal before it goes to a vote. That upsets some lawmakers who say the process should be more open.

"Billions of dollars of taxpayer money... we need to have more transparency, more inclusion," Senate Minority Leader Andrea Stewart-Cousins, D-Yonkers, said Wednesday on public radio.