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ALBANY MAKES SOME GOOD CALLS, BUT A BOOMING ECONOMY HELPS

If it had been the Vatican, a puff of smoke would have issued forth to signify that the powers had finally completed their task and were ready to tell the people about it. New York State -- oh, glorious moment -- has a budget. Let the smoke roll forth from the Capitol peaks.

What other states generally take for granted -- an on-time budget to guide state activities for a year -- perennially eludes New York. That history makes news out of the simple fact that a budget deal of any sort has been reached. For the record, the new state budget is late by four months, the longest delay ever. This is the 13th consecutive year of failure to be timely. Try bragging about that.

That said, what about the budget agreement that Republican Gov. Pataki, Republican Senate Majority Leader Joseph Bruno and Democratic Assembly Speaker Sheldon Silver finally managed to proclaim late Tuesday?

A basic fact about the budget is that the extraordinary good times on Wall Street gave Albany negotiators a flood of income-tax money to use to finance new spending initiatives and tax cuts. Just as the new U.S. budget is blessed with cash to paper over differences in Washington, so the state budget-makers were able to produce a bonanza of goodies to rave about in the name of statesmanship while hiking no taxes and laying off no state employees. To that extent, it's a politician's dream come true.

However, since most of the spending initiatives and tax cuts are again structured to take several years to reach full implementation, there are solid risks. If an economic downturn intervenes, as it did in the late 1980s, the commitment to future tax cuts could be hard to fulfill. Outside credit-raters are already worrying about the consequences of a revenue dip down the road.

The budget reserves $530 million to protect against a reversal. Such atypical caution by state budget-makers is worthy, but is it enough to weather a storm? No one can know.

Education: A winner all around

With money to burn, budget-makers picked a good place to use much of it, education. New York's school districts share a $750 million aid increase, billed as the greatest hike in state history. But the biggest deal is a package of education changes that merges what had been competing proposals from Pataki and Silver, a feat made possible by the revenue bonanza. Pataki contributes a plan that uses state revenues to relieve the burden of regressive local school property taxes. It's a momentous shift, and one that needs to be made.

But homeowners under 65 will have to wait until 1999-2000 to get any relief. Next year there's help only for senior citizens. By 2002, taxpayers living in medium-priced homes can expect a 27 percent cut; most seniors will save an average of 45 percent. The state will fill in for the lost revenue to the schools.

For Silver's part, the budget includes a five-year phase-in of state funding for prekindergarten for all 4-year-olds, full-day kindergarten for all New York children and reduced class size in primary grades. They are good goals.

Fortunately, the budget dumps Pataki's plan to reduce need-based tuition assistance grants to college students and raise tuition in the State University of New York. Both programs are unchanged.

Yes, other taxes were cut

Besides completing the third year of the 1995 personal income-tax reduction, the budget provides phased reductions in the sales tax, the gross receipts tax on utility bills and the inheritance tax.

Individual consumers can cheer an elimination of the state's 4 percent sales tax on clothing costing under $100 to take effect on Dec. 1, 1999, but it's not a good policy for Western New York. In this area, with heavy tourism from around the world and considerable business from Canadian shoppers, the sales tax brings in revenue from outside.

The state move will also set off competition for county governments to follow suit, and the local revenue losses may be hard to digest.

The estate tax cut is said by the governor to be to the benefit of working families, farm families and small businesses. They would be worthy beneficiaries. But why is the state giving up a one-cent per container tax on beverages? It looks like the bottlers' lobby won one.

What about welfare?

It might seem that with all the money flowing in, the state could have eased up more on the poor, but the boundary lines for welfare changes have been set nationally. It's good that Pataki abandoned his plan to run ahead of the federal government by gradually reducing welfare benefits in advance of the five-year federal lifetime benefit.

New York's Home Relief aid for childless able-bodied adults is replaced by a "safety net" program providing vouchers and cash for basic needs. This at least preserves some safety net.

And in the national welfare-cutting climate, the plan to protect the state from being a magnet for welfare by putting a limit on newcomers' benefits is a good idea.

City Hall: A loser

With all the money to throw around, the budget-makers still failed to come up with enough new state aid to meet the expectations folded into the city budget in May. The city budgeted $8.75 million; the state is providing about $5 million.

Sure, the Albany powers can say City Hall was being overly optimistic, even greedy, but it's Albany's fault that a late state budget left City Hall unsure of aid and able to speculate. The state should pay up.

Fortunately, there's still time to add more aid. The leaders have their agreement, but the budget isn't final until the Legislature has passed the bills that make it official.

Save the Bills for Buffalo

The budget includes a $125 million pot for statewide recreational facilities. That's where state money to improve Rich Stadium for a new Buffalo Bills lease is supposed to come from. Pataki has clearly made saving the Bills a high priority.

He is in the right corner. Soon the state will be discussing aid for New York City to help the Big Apple keep its beloved Yankees, who want a new stadium. The figures being tossed around for that endeavor are huge. Albany must remember that while major-league baseball occupies the eastern end of the state, there's only one big-league football team playing in New York, and it's here.

Now that the state has recognized it has a role, it's up to Bills Owner Ralph C. Wilson to acknowledge that commitment and keep the team here.

Not enough maximum security

Pataki made a good case in his budget presentations for a major prison building program, advocating 3,600 new maximum-security cells. He settled for one new 750-cell maximum-security prison and 800 maximum-security cells at existing prisons, all to be built over the next two years.

In recent years, New York has built mostly medium-security facilities with barracks-like settings. Pataki had wanted places for the worst of the worst, arguing that lack of such cells meant violent prisoners were being housed in places meant for milder criminals.

The state does need accommodations for the toughest prisoners that are suited to their violent nature. Pataki may have conceded too much in this case.

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