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Cuomo Unveils New York Budget Proposal, Announces State-Funded Universal Pre-K Plan

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ALBANY, N.Y. (CBSNewYork/AP) — Gov. Andrew Cuomo unveiled a budget proposal that he hopes will provide tax relief to both New York’s residents and businesses.

Cuomo proposed budgeting $137.2 billion for the fiscal year starting April 1, a spending increase of less than 2 percent accompanied by business, property and estate tax relief.

The budget he released projects increases of 4.6 percent for federally and state funded Medicaid, to $58.2 billion, and 3.8 percent in aid for schools, to $21.9 billion. It keeps many other spending lines flat, including $714.7 million in state aid to cities, towns and villages.

“This year is relatively simple and straightforward,” Cuomo said. However, he said it contains more policy and program proposals than usual.

In education, the governor wants to spend $1.5 billion to establish statewide prekindergarten programs over the next five years while spending $720 million to expand after-school programs. A $2 billion bond act subject to voter approval in November would bring broadband and computers to classrooms.

Cuomo, who is running for re-election on a platform of reducing taxes, would like to cut the tax rate on net corporate income from 7.1 to 6.5 percent, establish a 20 percent real property tax credit for manufacturers and eliminate net income tax on upstate manufacturers. He would raise the estate tax exemption from $1 million to $5.25 million while cutting the top rate from 16 percent to 10 percent.

The budget proposes a two-year property tax freeze through state rebates to homeowners in local jurisdictions that stay within a 2 percent tax increase cap.

“This budget recognizes and believes that tax relief is an economic growth strategy that is working for our state,” Cuomo said.

His proposal Tuesday kicks off months of negotiations in which the governor and state lawmakers will try to maintain their three-year streak of reaching a final budget deal by the start of the state fiscal year April 1.

Cuomo has said the state can amass a $500 million budget surplus this coming year if lawmakers agree to limit spending increases to 2 percent. The governor said that would allow surpluses to grow to $2 billion in three years.

Counted separately from the budget, the administration estimates another $2.4 billion in federal recovery funds for rebuilding from superstorm Sandy and $2.5 billion for New York’s implementation of the federal health insurance overhaul law.

On prekindergarten, Cuomo said existing state revenues would fund the program. That differs from the proposal by New York City Mayor Bill de Blasio to fund citywide pre-K with a tax surcharge on those earning $500,000 or more. Both Cuomo’s and de Blasio’s plans call for full-day universal pre-K.

“All the educators will tell you this is the single most advantageous reform that a state can make, that the younger you get children into school, the more open and accessible their brain, the more they can take in earlier,” said Cuomo. “It’s a priority. We believe in children, we believe in pre-k, we believe in education. Let’s put our money where our mouth is and make it a reality.

“This budget includes a fully funded five-year plan to cover the additional costs of full-day pre-K across the state,” Cuomo said. “We currently estimate the cost at about $1.5 billion over the next five years.”

De Blasio said Tuesday that Cuomo’s proposal is commendable but that he wants to continue seeking the tax hike because he’s concerned the money Cuomo’s talking about is not dedicated and could be shifted around down the road.

“It’s different than what we intend to do,” de Blasio told reporters, including WCBS 880’s Rich Lamb. “What we intend to do is create a stable, consistent, reliable funding mechanism for the next five years that will allow us to have full-day pre-K for every child and after-school programs for every middle school child that needs them.”

Pundits told CBS 2’s Marcia Kramer that de Blasio’s insistence on hiking taxes to pay for the programs raises a lot of questions. Is it just about the progressive mayor’s desire to tax the wealthy? Does de Blasio want to use some of the money for something else? Or is the city skeptical of the state’s ability to keep its fiscal promises?

Lawmakers are likely to seek some changes to the spending plan in the coming months. Democratic Assembly Speaker Sheldon Silver has said his conference will need to examine the details of the proposed tax cuts to make sure the state can continue to adequately support education and health care.

The budget proposal also details the governor’s ambitious plans to rebuild New York’s infrastructure in the wake of mass flooding like that from superstorm Sandy. Cuomo wants to fortify coastal infrastructure and to replace and repair 104 older bridges statewide. He also wants Metro-North Railroad to expand to New York City’s Penn Station.

The governor’s proposal also calls for federal support to keep Brooklyn’s ailing hospitals open, changing the controversial Common Core school curriculum, ending standardized testing for grades K-2, begin construction of four new casinos in the fall, allow public funding of political campaigns and reforming the state’s ethics policy.

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(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)