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In what some Capitol insiders are calling a classic case of political quid pro quo, Gov. Pataki announced Monday that Albany would be pumping an additional $7.5 million into Mayor Masiello's City of Buffalo budget for the coming fiscal year.

Four months after Masiello broke Democratic Party ranks and endorsed the Republican governor for re-election, Pataki said he would send $80.7 million Buffalo's way in the state's 1999-2000 fiscal year.

By coming out of the gate now with the additional money, Pataki ensures that Masiello will not have to take his annual tin-cup brigade to Assembly Democrats, a group that has not held the mayor in high regard since his endorsement of Pataki.

It was the Assembly that Masiello largely turned to last year for additional state aid after he said Pataki's budget fell $16 million short of the city's needs, and sources had said Assembly Speaker Sheldon Silver, D-Manhattan, was not going to be breaking a sweat to help Masiello this year.

In a statement, Pataki made no mention of the mayor's endorsement last September, which came a day after the Democratic gubernatorial primary.

"This aid package will help the City of Buffalo maintain vital services and bolster its efforts to restore the city to fiscal health," Pataki said. "As our economy continues to expand and create new jobs, we need to make sure that Buffalo is on a secure footing to enter the next century."

While the mayor was reticent to say the city still might need additional funds, he was clearly delighted in comparison to his fiscal position when Pataki proposed his budget last year. Masiello said having assurances of help from Pataki already will enable him to lobby for aid in other areas, from funding for a new convention center to waterfront development projects.

Asked whether the endorsement played into the extra cash, Masiello said, "I supported the governor for what he did and what I believed he would do for the city. This is an example of a partnership that works for the people of our city, and any way I can help improve and enhance our position, I'm going to do that."

Pataki administration officials tried to downplay any talk of a reward for last fall's endorsement.

"I think the governor has shown a commitment to Buffalo for four years. This is just an extension of that commitment," said Michael McKeon, the governor's spokesman.

News of Pataki's aid commitment to Buffalo came in the form of a one-page release Monday afternoon, two days before the governor will unveil his budget proposal. Such state funding would amount to a 10 percent increase for the city, compared with the approximately 2 percent inflation rate the governor has said he intends to impose on the state budget for the next fiscal year.

Deputy Assembly Speaker Arthur O. Eve, D-Buffalo, noted that Pataki last year vetoed $2 million in revenue sharing out of $16 million that the Legislature had sought to provide for Buffalo.

"I'm sure the governor appreciates the mayor's endorsement, which was a very, very significant endorsement," said Eve, one of the Democrats who strongly criticized the mayor's endorsement decision. "And if he's paying back on that, I'm sure the mayor is pleased, and certainly the city can use whatever he gets from the governor."

Assemblyman Sam Hoyt, D-Buffalo, said that "if George Pataki announces for president and Tony Masiello endorses him, I wonder if the Buffalo Convention Center and the zoo will be paid for."

Hoyt noted how Masiello had come to the Assembly for help in the last four years after Pataki made his budget proposals for Buffalo.

"This is a pleasant change," Hoyt said. "Nevertheless, my suspicion is that despite the assistance of the governor, which I appreciate, there's still going to be a substantial gap that the mayor will turn to the Democrats in the Assembly to help fill."

Another Democrat, speaking on condition of anonymity, cautioned Masiello not to get too excited until he sees the entire budget package. Rumors have spread in recent days that the governor's education and health-care components of the budget could end up leaving cities such as Buffalo scrambling for money.

There was some confusion Monday about how much of an increase Pataki was really promising. City officials were said to be upset at first that what he was portraying as a $7.5 million funding increase was, in fact, merely a flat-line funding plan from the current budget.

The city will get $80.7 million out of the 1999-2000 state budget; that is, on paper, what the city is getting this year. But because the city and state have different fiscal years, Buffalo officials say a state law ensures that an additional $7.5 million will come out of next year's state budget. For purposes of the city's fiscal year, that really puts the total coming from Albany at $88.2 million.

Besides the extra aid for Buffalo, Pataki also announced a $60 million tax credit for companies in the state that create jobs in cities. Companies that expand their operations in cities, or move from out of state to a city in New York, would get a $1,000 credit for every full-time worker hired above a 25-worker minimum. This means that a company that hires 30 workers would get a $5,000 state tax credit.

Like a series of personal income- and business-tax proposals the governor has unveiled in recent days, however, the $60 million tax credit plan would not become effective until 2001. Pataki also called for $5 million to help cities raze vacate buildings.

The governor said he would again push for changes in state mandates affecting cities.

Pataki said he would urge revisions to what he said is the state's costly Wicks Law, which requires multiple contracts for public works projects. He also wants to require outside arbitrators to consider the ability of a municipality to pay for any increase in union contract settlements.

Another plan, the details of which were not released, would make it easier for municipalities to merge.

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