Latest Budget: OK, Taxes on the Rich After All

Governor Paterson announced a "budget agreement" with legislative leaders on Sunday. He says this agreement closes the state's budget gap -- which he found to be $2.2 billion bigger than expected last week -- and "stabilizes our finances, and institutes critical reforms that will help eliminate waste and inefficiency in our government." It does so, in part, by cutting $6.5 billion from state spending, though it's hard to see how this is achieved from the Governor's summary: no specific reductions are mentioned, and public schools, transportation, the Environmental Protection Fund, city governments etc. get more money. Nor are Paterson's threatened layoffs mentioned.

But additional revenue sources are specified, some from "reforms" and federal stimulus funds (which, for example, are said to "save $1.6 billion this year and billions more in future years" in Medicaid), some from tactics like expansion of the nickel deposit to bottled water, and of course taxes: despite Paterson's previous pledges, the rich will take a hit, with citizens making over $300,000 seeing their marginal rate increased from 6.85 percent to 7.85 percent, and those making over half a million going to 8.97 percent.

The Governor seems confident the budget will pass on time -- that is, on Wednesday -- but Newsday says that's unlikely, with some of the needed bills unprinted at Saturday's deadline and Republicans likely to slow passage (senate minority leader Dean Skelos calls the numbers "staggering" and says "the public should be outraged").