Deal On Ny State Budget Announced

03.31.09 | FL News Team

The so-called three men in a room have emerged in Albany to announce a budget agreement. Governor David Paterson, Assembly Speaker Sheldon Silver, and Senate Majority Leader Malcolm Smith crafted the agreement under top secret conditions. They are touting the plan, which fills the largest budget gap in history.

The budget will cut 6-billion dollars in spending and use stimulus money to fill a 20-billion-dollar gap. However, there is still a 7-billion dollar increase in taxes and fees -- the largest in state history. The spending plan also comes in at a record 132-billion dollars. That is 11-billion dollars more than what Paterson first proposed.

Wealthy residents will be hit with higher taxes from the controversial "Millionaire's Tax." Paterson had argued such a tax would result in an exodus from the state of people who will spend, invest and create jobs.  But now he is singing a different tune, saying he does not want to balance the budget on the backs of the poor.

Bottled water drinkers will also shell out an extra nickel for each bottle as a recycling deposit. The three legislative leaders say this is not a happy budget and that tough choices had to be made to balance the books. Paterson says he cannot predict the end of the financial crisis but says this budget sets the stage for a turnaround.