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Budget talks favor more funds for schools

ALBANY – Officials say more than $550 million will be earmarked to partly, but not completely, undo a fiscal sleight of hand the state has employed the past four years to help balance its own budgets by using money that was otherwise intended for public schools across the state.

The aid adjustment, known as Gap Elimination Adjustment, has especially hit suburban districts hard and led to teacher layoffs and cuts in classroom and after-school programs. Gov. Andrew M. Cuomo proposed providing about $300 million to reduce the level the state grabs under the line item.

But a state official with knowledge of the talks says the funding to reduce what districts term a money grab had grown to more than $500 million during budget talks Friday.

While not getting rid of the Gap Elimination Adjustment, as many districts had hoped, it will reduce what had been a $2.8 billion hit on schools four years ago to under $1 billion in the coming school year, according to a state official close to the talks who spoke on condition of anonymity.

Meanwhile, as The Buffalo News reported earlier this week, state officials expect overall education aid to grow to at least $1.1 billion, up from the roughly $800 million Cuomo proposed. The Legislature also redirects how that money will be spent from the governor’s original plan, including driving more money to what districts have called a “take back” program by Albany to erase the state general fund’s red ink.

Precise district-by-district funding levels will not be made available until Sunday night or Monday, when officials are hoping to enact the 2014 budget before the new fiscal year begins Tuesday. Bleary-eyed staffers operating on little or no sleep the past few days were rushing to introduce budget bills before midnight Friday so they could go through the legal, three-day “aging” process so they could be voted on Monday.

The usual Albany confusion spread through the Capitol on Friday afternoon, helped along by legislative leaders. Senate co-leader Dean Skelos, a Long Island Republican, emerged from a private session with Cuomo in the afternoon to say that “as far as I’m concerned” the sides had reached a budget deal. He declined to provide any details.

Soon afterward, the other Senate co-leader, Jeff Klein, a Bronx Democrat, emerged from the same room with a different story. “I don’t think there’s a deal yet,” said Klein, who was still pushing for a low-income housing program. Klein appears to have abandoned his quest to increase benefits and provide up to six weeks of paid family leave for parents to take time off to care for a new child or sick family member.

Assembly Speaker Sheldon Silver, a Manhattan Democrat, did not take part – at least in person as far as reporters were told – in the private meeting with Cuomo, Skelos and Klein.

At about noon Friday, the speaker was exhibiting his full poker-face mode. “We’re at the same place we were last night,” Silver said of the talks.

By midafternoon, with a number of key items still under negotiation, it had become clear the prospects were over for the governor and legislative leaders to make a joint appearance to announce a budget deal. Lawmakers are due back at the Capitol on Sunday night for private party conferences, with voting expected to begin first thing Monday morning.

For the public, as well as lawmakers facing election in the fall, the education component of the budget is one of the most important. State officials close to the education talks said overall school funding statewide could surpass a 5 percent increase when the final numbers emerge.

Besides about $340 million in new state aid for expanded all-day prekindergarten classes – $300 million of which is earmarked for New York City – there is also an approximately $2 billion bond act proposal for spending by public schools, as well as certain private schools, on building renovations and other items. Critics have slammed that borrowing because it would permit districts to enter into long-term borrowing deals for things with short life spans, such as classroom computers.

While there are some new funding deals for New York City charter schools, some upstate charters – notably in Buffalo and Rochester – say decisions they are hearing about in the new budget will end up hurting them. Buffalo charter schools, which enroll about 8,000 children, insist the new budget could end up with $1.4 million less than what they say they should be getting.

While charter school aid will rise by $250 per student under one likely scenario, Buffalo charter officials say it will still result in a net cut for their facilities when all expense factors are included. Eric Klapper, chief operating officer at Tapestry Charter School, which has 800 Buffalo students, said the per-pupil amount the charters get from the local district has been frozen for four years. A plan to let charter schools qualify for building aid reimbursements – for such things as building expansion or repairs – died earlier this week in the Legislature.

“There is a catastrophic problem in education in Buffalo … “I’m trying to help solve the problem for the city and the money isn’t there,” Klapper said.

As state budget stakeholders await the release of budget bills this weekend, it was becoming clear that one of the state’s embattled manufacturing industries is emerging as one of the winners in the looming 2014 budget plan, sources said.

A plan promoted originally by Cuomo to give upstate manufacturers their own tax cuts has been expanded statewide and will cost the state an estimated $193 million. The tax break reduces a portion of the corporate income tax rate for manufacturers down to zero, officials close to the budget talks say. It also changes the definition of qualifying manufacturers to restrict the tax break to true “nuts and bolts” manufacturers, one source said.

State sources say still alive is a tax break for smaller manufacturers that pay their taxes through the personal income tax. The plan is to provide about $100 million in state tax breaks so that eligible manufacturers could deduct up to 20 percent of their property tax bill on state taxes. That proposal is expected to be especially helpful to smaller upstate manufacturers.

A state energy tax surcharge will be reduced on both homeowners and businesses; Cuomo had proposed the tax break just for businesses. And a proposal to create an independent consumer advocate to monitor the utility industry, a priority of AARP, has died.

Officials cautioned that numbers for some areas of the budget still could change as money for other programs – notably education – is shifted.