ALBANY – Gov. Andrew M. Cuomo on Tuesday proposed a 2013 budget with modest funding increases for economic development and higher- education programs and a 3 percent increase in the main state aid program for schools. He also promised to use his legal powers to push through a hike in the state’s minimum wage.
But while the new budget plan unveiled Tuesday proposes another $100 million in job-creation efforts from a special $1 billion funding pot for the Buffalo region put forth by Cuomo last year, a number of lawmakers and economic development officials were left confused about the program’s timetable.
After a year of state officials describing the $1 billion commitment as a five-year initiative, Cuomo on Tuesday suddenly termed it a 10-year program. Administration officials later said the plan is flexible and could be funded over five or 10 years, depending on the needs of businesses interested in locating to the region.
In his third fiscal plan since becoming governor, Cuomo proposed a $142.6 billion budget peppered with a series of relatively small funded ideas, a continuation of efforts already under way and further controls on state agency spending as a bow to New York’s sluggish economy.
The new budget is up 5.3 percent over last year’s $133.4 billion fiscal plan, but officials noted that the large overall budget hike is due to about $6 billion in what they called new “extraordinary’’ federal aid to fund Superstorm Sandy recovery efforts and to pay for a federal health insurance program New York will administer.
The state taxpayer portion of the budget increases about 1.6 percent.
While there are no tax increases, about $330 million would be raised through closing tax loopholes and extending some current taxes – from levies on utility companies that could bring $500 million a year and that will be passed on to consumers, to giving new powers to localities to extend sales tax levels without state legislative approval, to an $80 surcharge on certain driving-related violations.
While the governor has used his first two budget plans as devices to illustrate a major shift in the attitude of Albany, his new budget is arguably less dramatic and ambitious.
“It is not supposed to be traumatic. If the government is working and the government is working well, the budget is supposed to be simple,’’ he told lawmakers in a state theater near the Capitol.
While a projected $1.35 billion deficit has been erased, nearly $10 billion in red ink remains the following three years.
In setting up a battle with Republicans who partially control the Senate, Cuomo put his proposal to raise the minimum wage – from $7.25 per hour to $8.75 – into the budget plan. New York governors, thanks to a series of court decisions and language in the State Constitution, have relatively strong budget powers compared with other states; legislators cannot, for instance, change the language in legislation he is proposing, giving less incentive for Cuomo to negotiate certain provisions if lawmakers care about getting a budget done by the March 31 deadline.
Robert Megna, the governor’s budget director, said he believes the hike will drive more revenues to the state through higher worker wages, though the budget does not reflect that.
“Anything can be in the budget, and anything can be taken out of the budget,’’ said Senate co-leader Dean Skelos, a Long Island Republican. He said Cuomo’s plan not to index a minimum- wage hike to annual inflation increases makes it “a lot easier’’ to support.
Job creation and the Bills
For Buffalo, the governor’s budget calls for another down payment of his $1 billion vow for job creation in the region. After the speech, though, some were left confused by his characterization of it as a 10-year program. “We’ve always been told it’s a five-year program,’’ said Andrew Rudnick, president of the Buffalo Niagara Partnership.
Joshua Vlasto, Cuomo’s chief of staff, said the program is meant to be flexible and that funding could be accelerated if needed. “It’s whatever it needs to be to attract the kind of big industry and economic development that we’re looking to turn Buffalo around,” he said.
The new $100 million – which is not specifically identified – includes $75 million in new capital spending and $25 million in tax breaks to lure and retain companies.
Also in the budget is the financial deal to keep the Buffalo Bills from moving: $60 million in state funding, which includes $54 million in stadium renovations under a recent deal in which the team is expected not to move for at least the next seven years.
“For $60 million, the Bills better win this year, my friends,” Cuomo said. “Talk about performance funding.”
The modest economic development programs, a likely bow to the state’s deficit and the continuing sour national and state economy, include a $5 million statewide marketing effort – far less than what a special-interest committee with ties to Cuomo spent promoting the governor’s agenda. Another idea Cuomo has touted – “innovation hot spots” to link companies with universities – will be funded at just $1.25 million in the beginning.
The Cuomo budget proposes $434 million in state agency cuts, coming from about 1,400 jobs eliminated mostly through attrition, agency mergers and the closing of two state prisons – in Manhattan and Dutchess County.
State motor vehicle offices, though, could start opening on Saturdays.
A $50 million venture capital program will be funded mostly through the New York Power Authority and the state’s main economic development agency. And funding for the state university will continue to rise, as expected in a multi-year plan, by $300 million.
Reaction was predictable, from businesses supporting Cuomo’s call to reduce workers’ compensation and unemployment insurance increases to localities worried his plan does not do enough to reduce expensive state-imposed mandates that drive up property taxes.
But lawmakers in the majorities were not signaling any major bruising fiscal fights.
“I think it’s a good blueprint, and I don’t see any reason why we can’t have an on-time budget,” Skelos said.
Assembly Speaker Sheldon Silver, a Manhattan Democrat, said the governor’s plan “builds on our success over the last two years.” He offered no specific criticisms of any reductions in the growth of spending for certain programs.
Other “revenue extenders” include limits on what wealthy people can claim as charitable deductions and a $24 million tire waste fee. Other revenues will come from $7 million in various “loophole closings,” a favorite term used by governors instead of a tax increase.
Cuomo also would allow more places to offer Quick Draw, a lottery game that treatment experts call especially addictive. It comes as he wants to add up to seven new casinos in the state. He called his plan for the first three of those “one of the most exciting opportunities we have” for upstate and said casino proceeds to the government could flow in 2016 at about $150 million annually.
The governor’s budget proposes to extend the current $5 million tax credit for certain historic property rehabilitation projects. In December, he vetoed a bill, which developers said would mostly benefit downtown Buffalo and other upstate communities, to increase the credit to $12 million per project.
Local governments will see funding remain flat for their main unrestricted state aid funding program, while the budget will make it more difficult for drivers to plea-bargain traffic tickets, a route that costs the state millions in revenues each year. Total savings in local assistance will be $412 million, mostly by canceling cost-of-living increases for private health and human services workers local governments contract with to provide services.
What it means for all New Yorkers
• $142.6 billion spending plan, up significantly from last year’s $133.4 billion.
• $6 billion in federal relief for Superstorm Sandy.
• 1,400 state jobs cut; aid to municipalities stays flat.
• $434 million in state agency cuts.
• $50 million to encourage startup companies.
• Minimum wage would rise from $7.25 to $8.75.
• Quick Draw locations will increase.
• Education aid increases 4.4 percent.
• $25 million for all-day prekindergarten in poorer districts.
• $5 million for economic development marketing.
• $1.25 million to begin linking companies with universities.
• Almost $36 million to implement the state’s new gun control law.
What it means for Western New York
• $60 million package for the Buffalo Bills, including $54 million in stadium renovations.
• $100 million for job creation, part of the “Billion for Buffalo.”
• No plans to increase historic rehabilitation tax credit to $12 million per project, though $5 million level is extended.
• Aid to upstate transit systems like the NFTA remains unchanged.
• $85 million for Thruway Authority to eliminate need for toll increase on trucks.