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Pataki threatening veto of tax-cut-heavy budget

State lawmakers on Friday gave final approval to the 2006 state budget, but the wrangling over the new fiscal plan is anything but final. Several major fiscal issues remain unresolved and Gov. George E. Pataki already is threatening to veto parts of it unless spending is trimmed.

After 20 straight years of late budgets, Friday's approval was the second year in a row that the budget was passed on time.

In the fog that is Albany's budget-making process, officials could not even agree how much the new plan spends: the Senate says it's $112.4 billion, the Assembly puts it at $113.25 billion and the governor believes it is $115.5 billion. Even at the lowest level, the new budget spends at more than twice the inflation rate over the last year.

With the governor largely on the sidelines during the budget deliberations since he proposed his spending plan in January, lawmakers added billions of dollars in new spending, rejected numerous proposals to cut costs of school districts and Medicaid, and pushed through $1.6 billion in new tax cuts just seven months before they all face voters in November.

The $1.6 billion tax cut package includes a $330 credit on next year's state income tax filing for parents with children between the ages of 4 and 17 and the elimination of the state sales tax -- effective today -- on clothing purchases under $110.

>Rebates due in October

Its most expensive piece is a rebate -- with checks to be mailed out in October within weeks of when the 212-member Legislature is up for re-election -- on property taxes that will range between $80 to $800 for homeowners across the state.

Lawmakers turned to the state's ever-reliable source of money -- borrowing -- to the tune of $11.7 billion in new debt over the next five years.

Lawmakers approved a record $1.2 billion increase in aid to schools, including $67.4 million in overall operating and capital aid to the ailing Buffalo school district, turned back Pataki's plan to raise tuition at state colleges and rejected more than $830 million in cuts proposed by the governor for the state's hospital and nursing home industry.

Besides hikes in local school aid, the budget adds sharp increases in aid to Buffalo and other cities and towns in the region, spreads money for development projects at the waterfront and at the region's state colleges and pumps money into an assortment of private companies, such as $1 million in worker training money at American Axle, and not-for-profits, including local gambling treatment, alcoholism and other social service groups.

>$200 million in pork

As always, the Legislature also approved $200 million in various pork barrel spending, not including millions more that will be divvied up over the years from unidentified pots of money that critics have labeled legalized slush funds. Exactly what projects will be funded from the so-called "member item" pot wasn't available Friday; those projects will come out in dribs and drabs as the elections draw closer.

"This is truly a proud moment for all of us," said Senate Majority Leader Joseph Bruno, a Rensselaer County Republican, whose GOP stronghold in the Senate has been targeted by Democrats for a takeover this fall.

Besides being on time, something almost more unthinkable happened Friday: the budget was approved with the sun still shining above the Capitol, a change from the frenzied, late-night fiscal sessions that dominated budget-making for years.

While lawmakers are calling it an on-time budget, there are still numerous fiscal matters left to resolve, including how to spend more than $1 billion in programs that include child care funding for low-income people, food pantries, adult literacy programs and a slew of entitlement programs.

The legislators also have left unresolved several issues, even though their budget plan counts them as being done.

For instance, $325 million is budgeted as savings in Medicaid from a crackdown on fraud; yet the sides still are apart on the creation of a new investigative agency to root out fraud.

The Legislature's budget also counts on millions from the collection of taxes on cigarette and gasoline sales by Indian retailers; lawmakers rejected Pataki's attempt to delay enforcement of the tax law. But lawmakers did not put in a new way to force the tax collection and Pataki already has talked of ignoring a 2005 law ordering the taxes collected.

Despite all that, Assembly Speaker Sheldon Silver, D-Manhattan, declared, "The budget is done."

Pataki's office released a review Friday of the legislative budget, depicting it as a free-spending plan that drives up huge deficits over the next couple of years. The governor has 10 days to review the bills; talks are expected to begin next week to try to avoid a bitter veto showdown.

In Rochester on Friday, Pataki said the legislative budget "spends more than the state can afford, reforms too little and jeopardizes our taxpayers, our economic growth and our finances as we go forward into the future."

>'Get with the program'

Bruno, who like Pataki is a Republican, said the governor's office ought to "stop acting like children having a tantrum." He said Pataki ought to be "applauding" the legislative changes to his budget, not criticizing it or threatening vetoes. "They ought to get with the program," he said.

The big numbers even confused lawmakers. "$1.6 million," Sen. Owen Johnson, a Long Island Republican, said of the size of the tax cuts before quickly correcting himself to $1.6 billion. Flustered, he added, "It's a lot of zeroes after it."

Sen. Dale Volker, R-Depew, told his colleagues that this was his 34th budget as a state lawmaker. "I don't believe I have ever been part of a budget that provided the kind of money we have," he said. For Western New York, "We've never received anything like the help that is here."

e-mail: tprecious@buffnews.com