Pushing deadlines, Legislature, governor struggle to complete state budget

Albany

Fights over a new fee on opioid sales, school safety issues, education requirements for yeshivas and the amount of taxes that should be extracted from a major health insurance sale remained some of the sticking points late Thursday in efforts to finalize a $168 billion 2018-19 state budget.

While GOP Senate Deputy Majority Leader John De Francisco on Thursday afternoon predicted the budget could be completed early Friday, it looked increasingly like lawmakers would be working through Good Friday and maybe longer putting final touches on the spending plan.

“Nobody knows until everything is done,” De Francisco said Thursday afternoon.

Seven hours later, though, there were still no agreements and there was even some subdued talk of offering a budget extension measure that could allow lawmakers to leave for Easter and the start of Passover and return the following week.

Assembly Democratic majority members were scheduled to go into conference just prior to 10 p.m. and they had requested a "message of necessity’’ from Gov. Andrew Cuomo that would let them vote on at least two noncontroversial budget bills without the customary three-day “aging” period that is supposed to provide time for actually reading the bills members will vote for.

The battle over yeshivas appeared to be caught in political tug of war between the GOP-controlled Senate and Democratic-led Assembly.

Brooklyn Democratic Sen. Simcha Felder was holding out for an exemption or moratorium from from upcoming state guidelines that will ensure subjects like math and science are taught in Yeshivas in a way that is “substantially equivalent” to the public schools.

While Felder is a Democrat, he caucuses with Republicans and consequently has the needed 32^nd, or swing vote, in the 63-seat senate.

He said to have some allies on this issue, especially lawmakers in the Catskills as well as Rockland and Orange counties with substantial Orthodox enclaves where residents tend to vote in unified blocs.

The proposal to exempt those schools, though, was sharply opposed by most Assembly Democrats, who have close ties to teachers’ unions and related education groups.

Assembly opposition may have been a reason that a pay raise commission was floated as a potential trade for a yeshiva deal.

Many Assembly members remain upset over a 2016 commission that failed to push through what would have been lawmakers’ first raise since 1999 in their $79,500 base salaries. That raise faltered when Gov. Andrew Cuomo’s appointees to the commission failed to act. The prospect of another attempt at raising their pay may have been seen as a way to get Assembly members to relent on the yeshiva issue.

Even if it passes, though, exempting yeshivas from educational guidelines could spark a legal challenge, noted Michael Rebell, a Columbia University professor and lawyer who has pursued school funding-equity cases.

Prior Court of Appeals rulings maintain that all schools in the state need to prepare youngsters to be effective citizens with the ability to vote and serve on a jury.

“I’m concerned about the civic education side,” Rebell said of the potential exemptions.

Also in play was the extent to which the state should tax the pending sale of the Fidelis health insurance firm to the St. Louis-based Centene Corp. for $3.75 billion.

Fidelis, which is operated by the Catholic church, is a major Medicaid provider, and Gov. Andrew Cuomo says the state should get a significant share of the proceeds, possibly collecting unspent excess reserve funds that insurers hold for unexpected expenses. New York Cardinal Timothy Dolan, though, says they want to use the sale proceeds to set up a fund to help the poor.

An opioid fee was still alive late Thursday as well.

Described as an assessment or surcharge, this would be collected from manufacturers and wholesalers, allowing the Senate Republicans to maintain that they haven’t approved any new taxes in the budget.

But critics of the plan note that the cost, estimated at $100 million annually, would inevitably be passed along to consumers.

There were also questions about whether the money would supplement existing anti-addiction programs or start new efforts to fight the opioid abuse epidemic sweeping New York and other states.

School safety improvements and tougher gun control measures were in discussion: Assembly Democrats want to make it harder for domestic abusers to buy guns while Senate Republicans have pushed for more police and mental health services in the schools.

There had been some progress.

Two out of 10 main budget bills — Public Protection and General Government and Education, Labor and Family Assistance  — were printed on Wednesday, while the noncontroversial Debt Services bill was passed by both houses last week.

Many of the controversial initiatives in the PPGG and ELFA bills were removed, either to be considered after the budget, or to be used as a negotiating chip during the last-minute deal-making.

Some omitted portions, like the precise amount of state aid to public schools will be revived in the final spending bill.

Others, like the Child Victims Act, voting reform, bail reform and the DREAM Act, had been dropped in the interest of passing an on-time budget.

A major priority this year is finding a way to plug New York State’s $4 billion budget gap and devising a state work-around for the federal tax code, passed in December, which cap the state and local tax deduction that many well-off New Yorkers claim.

Legislative leaders say they are close to agreement on the tax plan, which could include shifting income tax burden to a payroll tax (to be deducted by employers), and enabling tax-deductible charitable donations to healthcare and school funds.

That measure would also allow school districts to set up charitable foundations. Taxpayers could donate to these foundations and claim a deduction, which would presumably offset the amount of property tax revenue a school district would need to raise.

De Francisco said he thought that was a bad idea and would not likely solve the problem created by the new limits on deductibility.

“It’s an administrative nightmare,” he said of the payroll/income tax swap.

rkarlin@timesunion.com 518 454 5758 @RickKarlinTU