Paterson Still Pushing Long-Shot Property Tax Cap

A day after the Legislature passed one of the latest state budgets in New York history, financial and business analysts said the budget overspends and overtaxes while Gov. David Paterson said the work isn't done.

The lame-duck Democrat says he'll push lawmakers to approve his property tax cap, which appears to have little chance in the Assembly. On Wednesday, he repeated his threat to bring the Assembly back to Albany in October — the height of election season — to face a vote on his proposal to limit local property tax growth to 4 percent annually.

Powerful Assembly Speaker Sheldon Silver, a Manhattan Democrat, said he remains "open" to addressing the issue, but he noted the Assembly sought property tax relief by fighting to restore Paterson's 5 percent cut in aid to schools to contend with a $9.2 billion deficit. Paterson vetoed that attempt.

Paterson also cast more doubt on the "framework" lawmakers said they'd agreed to Tuesday night for dealing with a landmark proposal to give the State University of New York and City University of New York more autonomy from Albany, which continues annual cuts to funding. Paterson told reporters Wednesday that he's not sure what the "framework" means and he had no knowledge of agreements on details.

State University of Buffalo President John B. Simpson called lack of legislative approval a defeat.

"I am deeply disappointed that Albany has failed once again to give UB the policy tools we need to gain new operating resources, and use those resources more effectively," Simpson said. "This failure is bad for students, bad for the university, and bad for the Western New York community."

The university centers in Buffalo, Binghamton, Albany and Stony Brook had the most to gain. They were to get the financial resources and freedom to grow into national academic powers.

Silver has been opposed to the plan that would allow tuition to rise quicker and set higher tuition for doctoral degree-granting universities, which he said could limit access to state-funded higher education to lower- and middle-class families.

The Senate vote that closed the budget due April 1 drew criticism Wednesday.

E.J. McMahon of the fiscally conservative Manhattan Institute said the $136 billion plan "shapes up as a flimsy house of cards that could begin to collapse before the year is out."

He said it relies on nearly $800 million in tax increases and other revenue-rising acts and is an increase in spending in all funds — including federal funds — of 5.7 percent. But that includes the $2.1 billion payment in school aid due in the 2009-10 fiscal year that the Legislature and Paterson couldn't agree to close, and so it was rolled into the current fiscal year. Without that, this year's budget boosted spending about 2.4 percent, tiny by Albany standards.

Major elements of the budget include:

—A $1.60 per pack increase in the cigarette tax to $3.40 a pack, the highest in the nation.

—Eliminating the sales tax exemption on clothing and shoes costing under $110. The exemption would end in October, then return April 1, but exempt clothing and shoes worth $55. The $110 exemption would return April 1, 2012. That is supposed to bring in $330 million.

—Cutting in half the charitable deductions for New Yorkers making $10 million a year.

—Expanding the hours of the Quick Draw gambling game run by the Lottery Division, often in bars, and expanding the hours of video slot machines at race tracks.

—Delaying $100 million in business tax breaks.

"It's official: Albany has enacted the anti-recovery budget," said Kenneth Adams, CEO of the state Business Council.

"When nearly every other state has made the tough decisions to hold the line on spending and taxes, New York has increased spending in the last two years by nearly $14 billion and increased our already sky-high taxes by over $9.5 billion, despite the steepest economic downturn in eighty years," Adams said.

Kathryn Wylde, CEO of the Partnership for New York City, was disappointed there were no structural budget reforms because another big deficit and difficult budget is expected next year. But, she noted, "for the most part, the governor and Legislature rejected significant tax increases."

Paterson defended the budget, saying it doesn't borrow billions of dollars to further put New York in debt and tax increases amount to less than 10 percent of the budget, which he called "not much taxing." Spending, he noted, increased only around the inflation rate, rare in Albany.