State budget agreement reached with middle class tax credit, education investments, reforms, minimum wage increase
Gov. Andrew Cuomo and the leaders in the state Senate and Assembly say they have reached an agreement on the 2013-14 budget, and have released an outline of the plan.
According to the governor’s announcement, the budget contains a new $350 tax credit for every middle class family, education investments and reforms, and an increase in the minimum wage to $9 per hour.The three leaders – the governor, Senate Majority Coalition Co-Leaders Dean Skelos and Jeff Klein, and Assembly Speaker Sheldon Silver – said the budget is on track to pass before the April 1 deadline, the first time New York has had three consecutive, on-time budgets since 1984.
The budget closes a $1.3 billion gap with no new taxes or fees, according to today’s announcement.
The budget includes $1.125 billion in new tax cuts to middle class families over three years. Families with incomes between $40,000 and $300,000 will be eligible to receive a new child tax credit of $350 per year for three years, beginning in 2014.
The plan includes nearly $800 million in tax cuts for New York businesses over three years. Cutting taxes sends a positive sign to the private sector that New York is pro-business and helps reverse New York’s reputation as overtaxing business, the governor’s announcement said.
The plan includes a permanent tax credit for those who hire veterans, and $181 million in tax credits over three years for businesses that hire youth.
The governor says the plan modernizes and simplifies unemployment insurance and workers’ compensation to provide employers $1.3 billion in savings without affecting workers’ benefits.
The budget provides initial funding for his “Innovation Hot Spots” program to create or designate 10 high-tech innovation incubators at locations affiliated with higher education institutions to promote private-sector growth; a $50 million Innovation Venture Capital Fund that will provide seed and early-stage funding to promote new business formation and growth and ease the transition from ideas through research to marketable products.
$5 million is included for a “Next Generation Job Linkage Program” helping employers to identify a job to be filled, define the skill, and provide the training for it, in hopes of placing people in an estimated 210,000 unfilled jobs in the state.
The announcement says the budget increases support for the Environmental Protection Fund and the “Cleaner, Greener Communities” program, to launch new projects across the state for jobs and the environment.
The budget includes a third round of development awards through the Regional Economic Development Councils including $150 million in new funding and $70 million in tax credits.
To bolster tourism and to better market New York-made foods and produce, the budget launches a “Market NY” initiative.
The budget includes $110 million for a third round of competitive grants for SUNY and CUNY projects that connect economic development and academic excellence.
“The Budget reflects New York State’s focus on creating a world-class education system that will fully prepare all of New York’s students to compete in the 21st Century economy,” today’s statement said. “To accomplish the goal, the Budget includes an increase of nearly $1 billion in education aid,” including $25 million for pre-kindergarten programs, for which schools must compete; an unspecified amount “To maintain New York State’s leadership in holding teachers accountable for student achievement, the Budget continues to tie increases in funding for education to the implementation of a teacher evaluation system. No teacher evaluations means no state increase”; $20 million to “cover the full cost of expanding learning time for students” for schools that increase total class time by 25 percent with longer school days and more school days; $15 million “to transform schools into community hubs that integrate social, health and other services, as well as after-school programming to support students and their families”; $11 million “To improve results and incentive high-performance” through $15,000 in annual stipends for four years to the most effective teachers beginning with math and science teachers”; $4 million to expand “Early College High School” programs; and an unspecified amount to “increase the standards for teacher certification to require passage of a ‘bar exam,’ in addition to longer, more intensive and high-quality student-teaching experience in a school setting.”
Other measures in the budget plan not directly related to revenue or expenses include raising the minimum wage to $9 an hour over three years, and reforms that were recommended by the Moreland Commission to give the Public Service Commission greater authority over the state’s utilities.
Other measures include a previously announced Pension Stabilization Program that has been agreed to by the State Comptroller’s Office for local governments to access short term relief as the savings of Tier VI begin to take effect, and phasing out over three years starting next year the Temporary Utility Assessment, a tax on electric, gas, water and steam utilities.
“Two years ago our state was facing significant challenges, with constant spending and tax increases chasing businesses and people from our state and scandals making our government a joke of late night television,” Gov. Cuomo said. “Today New York State is creating hundreds of thousands of private sector jobs, opening the doors to new small businesses, cutting taxes for middle class families to their lowest rates in 60 years, and making education investments and reforms like never before.”