Albany Democrats who once promised reform cast it aside in the most secretive budget process in years. They crafted a $131.8 billion spending plan that relies on federal stimulus spending and nearly $7 billion a year in new taxes and fees to close a projected $16 billion deficit.

Gov. David A. Paterson, who spent the past several months warning New Yorkers of the fiscal crisis, caved in to Assembly Speaker Sheldon Silver and Senate Majority Leader Malcolm Smith with income tax increases and fewer spending cuts than he had sought to pay in his proposal. Details are still emerging from behind the closed doors, but it appears that special interest groups, particularly public employee unions, won their campaign against the sacrifices Gov. Paterson had asked of them.

State-supported spending will rise $3.3 billion in the fiscal year beginning April 1, for an increase of $10.5 billion when combined with federal funds. Gov. Paterson had proposed a $121.1 billion budget, a $1.3 billion hike without the stimulus funds.

If the Legislature backs the plan this week, New Yorkers will lose their $1.5 billion worth of STAR rebates this year at the same time they will be asked to ante up another $7 billion in various taxes and fees, among them a 5 cent deposit on bottled water.

Under the proposal, it will cost New Yorkers an extra $557 million in new utility taxes to light and heat their homes in the coming year. They will pay new or higher fees for a driver’s license, to rent a car or to purchase wine or beer while Gov. Paterson’s proposal to sell wine in grocery stores was dropped. Some other additional fees first sought by the governor were eliminated by using federal stimulus money, which means the revenue will have to be raised through other means or spending cuts made in future years after the funding ends.

Assembly Speaker Sheldon Silver emerged the winner in his campaign for a tax hike on affluent New Yorkers. However, it will even reach deeper than his so-called “millionaire’s tax.” Two tax brackets will be added to married and joint filers who make more than $300,000 a year, but it will also raise the tax rate on individual filers who earn more than $200,000 annually to generate $4 billion a year in taxes. The television and film industry, though, will receive $350 million in tax credits to hold the line on production costs and pass it on to investors.

E.J. McMahon, an Albany critic and director of the Empire Center for Public Policy, said the income tax hike “looks like the biggest tax increase in the state’s history.”

Lawmakers get to keep their $170 million slush fund in member items to be doled out at their discretion to projects in their home districts.

The budget cuts health care spending, but not as deep as Gov. Paterson had sought. It restores the governor’s proposed cuts in school aid with a slight increase in education funding. Upstate could suffer job losses and wider economic repercussions with the proposed closing of three state prisons that had not been identified Monday, one of the consequences of the behind-the-scenes, down-to-the-wire negotiations.

New Yorkers will have no time to learn the details of the budget or make their sentiments known to their elected officials. In the interests of an on-time budget, Gov. Paterson, Speaker Silver and Majority Leader Smith sacrificed transparency to mute opposition while they now try to ram the proposal through the Legislature. Sadly, it is Albany functioning at its worst that makes a travesty of the legislative process.

Reform? What reform?

Read article here