Cuomo Strikes Ethics Deal Setting Up New York Budget Passage

(Bloomberg) — New York Governor Andrew Cuomo struck an agreement on a budget that will require lawmakers to disclose more about their incomes as a result of scandals that have gripped the capital.

The deal reached Sunday with legislators in Albany clears a path for Cuomo to enact a spending plan before the April 1 start of the fiscal year for the fifth time in a row. Cuomo had said he wouldn’t sign a budget without rules aimed at curbing the abuse of power after former Assembly Speaker Sheldon Silver was arrested on federal corruption charges.

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“I said I would not sign a budget without real ethics reform, and this budget does just that,” Cuomo said in a e-mailed statement Sunday.

The outcome is a victory for Cuomo, a 57-year-old Democrat, who can point to it as a sign he’s combating dysfunction and cleaning up a sullied statehouse. Its passage would mark the longest stretch of on-time budgets in at least four decades, which has helped New York win its highest credit rating from Standard & Poor’s since 1972.

Cuomo said that the budget, which also includes education initiatives he sought, will hold spending growth to less than 2 percent for a fifth year. The full details will be released Monday, his office said in the statement.

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Minimum Wage

Still, aspects of the accord announced Sunday failed to include some of Cuomo’s key proposals, including an increase in the minimum wage to $10.50 an hour from $8.75, which would have been the highest among U.S. states. It also didn’t include an extension to the mayor’s control over New York City’s schools. Cuomo said on March 28 that both items, along with others left out of the budget, would be dealt with before the legislative session ends in June.

When Cuomo introduced the spending plan Jan. 21, his priority was overhauling the education system by making it easier to fire educators, boosting the role of student exams in teacher evaluations and increasing the number of charter schools, all of which rankled teachers unions. He said if lawmakers agreed, schools would get more than $700 million in extra funding.

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That priority was overtaken by the need to address ethics scandals in Albany. The day after Cuomo’s budget proposal was released, Silver was arrested on federal charges that he made almost $4 million from kickback schemes over 15 years. Silver, a Democrat who had served as the Assembly leader for more than 20 years, said he’ll be exonerated.

Ethics Rules

Cuomo rushed to move forward with new ethics regulations as Manhattan U.S. Attorney Preet Bharara warned of more arrests to come.

On Feb. 2, Cuomo said he’d rather have a late budget than one without broad disclosure requirements for lawmakers concerning their outside jobs, a threat that could’ve led to a government shutdown.

As he pressed his proposals, teachers unions targeted him in television advertisements and in protests.

The attacks resonated with the public. A poll by Quinnipiac University in Hamden, Connecticut, this month showed his job approval rating had fallen to 50 percent, the lowest since he took office in January 2011. It found that most of the damage was from voters who disapproved of his stance on education.

School Overhauls

Despite that toll, the budget deal includes most of the governor’s proposed education measures. Teacher evaluations will determine whether they receive tenure, and educators will be fired if they receive failing grades for three consecutive years, according to people familiar with the deal.

Schools that fail to meet standards will be taken over by a state receiver as well, said the people, who spoke on condition of anonymity because the bills are still being written. Teachers that excel will get pay raises and bonuses, they said.

The governor also won the ethics issue, with new rules in the budget that require lawmakers to disclose their clients for the first time and would strip pensions from public officials convicted of graft. The pension change needs approval by voters before it can take effect.

Also, as the governor proposed in January, the New York Thruway Authority will get $1.3 billion of the surplus left from legal settlements with financial institutions, the people said. Much of the authority’s funds will be used to help finance a $4 billion replacement for the Tappan Zee Bridge, one of the nation’s largest infrastructure projects. Upstate New York will get $1.5 billion of the settlement money to pay for economic development projects, with another $500 million set to be spent on broadband Internet service for rural areas.

A commission will also be set up to give lawmakers their first raise from their $79,500 base salary in 15 years, according to the people familiar with the agreement. The raise would also be applied to the governor’s staff.

To contact the reporter on this story: Freeman Klopott in Albany at fklopott@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net William Selway, Andrew Davis

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Source Article from http://finance.yahoo.com/news/cuomo-strikes-ethics-deal-setting-041013604.html

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