New York legislators pass $131.1 billion budget

(AP) - New York state Senate Republicans' attemptsto block a tax hike on top earners and to continue property taxrebates for homeowners both failed Friday

ALBANY - (AP) - New York state Senate Republicans' attemptsto block a tax hike on top earners and to continue property taxrebates for homeowners both failed Friday before lawmakers passedthe $131.8 billion state budget.

In debates on the nine bills to enact the budget for the fiscalyear that started Wednesday, Republicans complained that they andtheir constituents were left out because it was negotiated mainlyby three downstate Democrats.

"There's no attention to western and upstate New York in thisbudget," said Sen. George Winner, an Elmira Republican.

Sen. Liz Krueger, a Manhattan Democrat, said the New York Cityarea generates far more state revenue than it receives, and thisbudget constitutes "a further transfer" from downstate to upstatethan the usual $13 billion. She said an income tax hike was neededto prevent cuts in fundamental services. It is expected to generate$4 billion a year for three years before it expires.

"What we were doing was actually protecting education funds,health care funds and other priorities," Krueger said.

The tax change will require wealthier residents, beginning withsingle filers earning $200,000 a year, to pay a higher tax rate of7.85 percent. Rates will increase to 8.97 percent on annual incomesabove $500,000. The current top rate is 6.85 percent on thoseearning more than $40,000.

Senate Republican leader Dean Skelos predicted the tax increase,"in the face of the worst economic crisis since the GreatDepression," will lead to more job losses, higher unemployment anda deeper recession.

Democratic Majority Leader Malcolm Smith said it will affectonly 4 percent of New Yorkers, noting that group will include someRepublican lawmakers.

Sen. Kenneth LaValle, a Long Island Republican, said residentsof Nassau and Suffolk counties pay the highest property taxes, andthey'll feel the loss of the STAR property tax rebates of $500 to$1,000. They will also pay 16 percent of the higher income taxes,he said.

"Today we are taxing the rich and not the poor," said Sen.Ruben Diaz, a Bronx Democrat. "Today we are not building thebudget on the backs of the poor."

The budget was negotiated by Gov. David Paterson, AssemblySpeaker Sheldon Silver and Smith, in consultation with otherDemocratic lawmakers. It uses federal stimulus money, tax hikes andsome program cuts to close an estimated $17.7 billion deficit.

The Senate passed the budget bills along party lines, 32-30, onThursday and Friday. The Assembly passed them Tuesday.

Along with the tax and spending measures, lawmakers passedlegislation to replace some mandatory prison sentences with judges'discretion to order probation, addiction treatment or boot camp.They also authorized nickel deposits on water bottles starting inJune. Carbonated beverages, beer and wine coolers already havemandatory deposits.

Paterson is expected to approve all the bills.

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