Higher electric bills. More taxes on beer, wine and even bottles of water. A new monthly cell phone safety charge.
Those are only a few of the highlights – or some taxpayers may say lowlights – from the tax and spending increases included in the $131.8 billion budget agreement state lawmakers reached over the weekend and are expected to approve this week.
The budget, which is an increase of $10.5 billion or 8.7 percent over last year, attempts to close a $17.7 billion budget gap for 2009-2010 – the largest in state history. However, that $10.5 billion increase includes $7.2 billion in federal funds from the stimulus package that the state must spend this fiscal year.
Still, the budget is receiving some harsh criticisms from a variety of groups as well as members of the Republican Party who say they were shut out of the process while Governor David Paterson, Senate Majority Leader Malcolm Smith and Assembly Speaker Sheldon Silver negotiated the agreement.
“The three men in a room had the opportunity to live up to the words they had spoke repeatedly for the past few months by working in bipartisan fashion to tackle New York challenges,” Republican Queens State Senator Frank Padavan said. “At a time when clear and strong actions matter, when fiscal responsibility is needed, we have an out-of-control state budget crafted under a dark shroud of secrecy that will certainly have devastating consequences.”
After announcing the agreement on Sunday, March 29, the Democratic leaders defended the budget. Some of the victories they highlighted included a health care savings package totaling $2.3 billion including reforms to the state’s Medicaid hospital reimbursement system to lower costs and improve patient outcomes, restoring $49 million in reductions to community schools and $31 million to programs at CUNY and SUNY schools and restoring $328 million in federal aid to the city.
It also includes increasing school aid by $1.2 billion compared to 2008-2009, also due in part to the infusion of federal stimulus funds.
“The 2009-10 state budget could have been a disaster for schools, students and taxpayers, but by utilizing federal stimulus funds to fill the hole in school funding, we are able to keep our children on the path to a sound education,” said Queens Assemblymember Catherine Nolan, who chairs the State Assembly Education Committee.
While Democratic leaders said the budget that will likely pass this week does not include some tax increases like Paterson’s proposed tax on non-diet soda that would raise $404 million, the budget does include tax hikes in other areas.
A surcharge on gas and electric bills could cost some families $100 more per month for their utilities, the beer tax will increase by 3 cents per 12-pack, a public safety cell phone surcharge would increase bills $1.20 and even a learner’s permit for drivers would increase from $2.50 to $3.25.
Meanwhile, Albany leaders remained split along partisan lines about the budget and its impact on the current fiscal crisis and future of the state.
“This budget is far from ideal, but neither was the dire state of the economy that confronts us,” Smith said. “What we now have, however, is a road map for long-term economic growth and sustainable recovery to bring New York back into fiscal solvency.”
Senator Padavan had a different take.
“This budget is fiscally reckless, highly irresponsible and will only continue New York’s fiscal woes,” Padavan said.
