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Paterson readies veto

ALBANY — New York’s Legislature began passing a state budget Monday that was due April 1, although Gov. David A. Paterson’s threat of vetoes means the long fight will likely have at least one more round.

The plan would impose a smaller cut in aid to public schools than first proposed, eliminate a sales tax exemption on clothing and increase the tax credit for movie and TV productions that film scenes in New York.

The Legislature’s $136 billion plan also includes policy provisions that could affect New Yorkers for years. It includes counting prisoners as residents of their last address, most of which are in New York City. That could cost traditionally Republican upstate areas, where prisons are located, a state Senate seat in next year’s realignment of election districts. It also would give gay couples who are legally married in other states the ability to file as married couples for tax purposes in New York, where gay marriage is illegal.

But the Legislature’s budget, forced in a power struggle with Paterson, is also remarkable for what it doesn’t provide. Lawmakers rejected Paterson’s budget bills that included a cap in the growth of some of the nation’s highest property taxes; a plan to give greater autonomy to the public universities and allow them to set their own tuition increases; and creation of a contingency fund if $1 billion promised from Washington but now threatened creates another big midyear deficit.

Paterson has promised vetoes of the Legislature’s budget that he claims spends $400 million more than his without enough money to pay for it. Lawmakers earlier Monday refused to accept Paterson’s latest and final emergency spending bill that contained his spending and policy goals.

“The fact that members of the Legislature are even considering voting on budget proposals that include increased state spending and additional taxes and fees is a demonstration of their blatant disregard for New York’s taxpayers,” stated the bipartisan business group Unshackle Upstate.

But the Legislature is also credited with avoiding what could be annual tuition increases of up to 8 percent at the State University of New York and City University of New York. It was part of Paterson’s plan to allow the public universities to set tuition without Albany’s approval.

“Letting certain public colleges and universities charge higher rates of tuition lays the groundwork for a tiered system that could price poor students out of more expensive institutions and drive middle-income students even deeper into student loan debt,” said Fran Clark of the New York Public Interest Research Group.

The Legislature’s plan includes amendments to Paterson’s budget proposal from January. Each version of the budget adds up to about $136 billion, with less than a 1 percent increase in spending over the latest fiscal year. The two plans are about $400 million apart, but differ greatly in key areas such as education and property tax relief.

The Legislature’s plan would increase the Hollywood film tax credit to $420 million a year — from $350 million — that mostly drives productions and tax revenues to New York City. The Legislature also wants to the richest New Yorkers to pay more in taxes and receive reduced tax deductions for charitable donations. It comes a year after the income tax was raised for the wealthiest New Yorkers — a change that led many to move to other states, resulting in far less revenue than anticipated.

The Senate’s Democratic majority pushed for a last-minute change in the school aid bill that would require wealthy and average needs schools to devote their share of the restored funding to property tax relief to lower tax bills.

But there may be little aid left to do that. Forty percent of the $600 million to restore Paterson’s proposed 5 percent cut in school aid — worth $1.4 million — would go to New York City, in line with its enrollment.

More than half the remainder would be directed to so-called high-needs schools to restore teacher jobs and other instructional cuts. The remainder would be shared by the majority of the state’s 700 school districts for tax relief.

Senate Democratic leader John Sampson said he’ll have the 32 votes needed to pass the Legislature’s budget in his chamber, where Democrats have a 32-30 seat majority. But Republican senators could block any override attempt of Paterson’s expected vetoes.

Republican Assemblyman James Tedisco of Schenectady County said each Democratic budget plan — the governor’s and the Legislature’s — taxes and spends too much as the state is trying to pull out of the recession.

“If they had a third foot they’d shoot that, too,” he said.