Spitzer Details Cuts and Fee Increases in Budget ALBANY, NEW YORK (WXXI) - Governor Spitzer presented a $124.3 billion dollar state budget, at a time of growing economic uncertainty. The governor outlined how he'd close a multi billion dollar deficit through spending cuts to health care and education, closing tax loopholes, and raising numerous fees.

Governor Spitzer began his budget presentation well aware of the gyrations on Wall Street, which could potentially have a big effect on New York's economy.

"The stock market has this morning alone been something like a bungee jump," said Spitzer, as Wall Street stumbled, then seemed to revive after the Federal Reserve cut interest rates.

In this atmosphere of financial uncertainty Governor Spitzer explained, with the help of detailed charts and graphs, how he would close the state's $4.4 billion dollar deficit in his new state budget plan. The governor is adding $400 million dollars in spending, to provide universal health care to children, and to improve the Upstate economy, so he says he really had to come up with $4.8 billion dollars in savings or revenue increases.

Spitzer says the budget does not raise taxes.

"It does level the playing field by closing certain tax loopholes," Spitzer said.

The loophole closures include enforcing the tax on Internet purchases, known as the Amazon tax by forcing large on-line retailers to collect sales taxes from New York purchasers and pay it to the state tax department. He'd also subject out of state credit card companies to bank taxes, and close a loophole that gives LLC's- Limited Liability Corporations- a break. The Governor also makes changes to the so-called sin taxes. He says he'll finally begin collecting sales tax on cigarettes sold on Indian reservations to non-Indians. He'd also reclassify alcoholic drinks known as malt beverages to be taxed as liquor, not beer, and subject some cigars to cigarette taxes .

The governor would add or increase 46 different fees, including higher real estate closing fees for houses over $175,000, and increasing a charge on auto insurance policies to help pay for police from $5 to $20..

Spitzer would also postpone a scheduled increase in the size of the STAR property tax rebate check program. Instead of increasing by 17%, as planned, the checks would be the same amount as last year, a decision the governor said was painful, but necessary.

"We simply can't afford it," the governor said.

The leading Republican in the legislature, State Senate Majority Leader Joe Bruno called the proposed reduction in STAR rebates "unconscionable".

Spitzer also plans to tax HMO's at the same rate as other insurance companies. The change could bring nearly $250 million dollars to the state budget. Senator Bruno condemned that plan as a "secret" tax that he says would only be passed on to employers and health insurance policy holders.

"I believe the governor has missed addressing the real priorities of the people of New York State," said Bruno, who said he was "disappointed" by the budget plan.

Spitzer includes a number of spending cuts in his budget. He plans to trim nearly one billion dollars from the Medicaid budget, partly by cutting reimbursement rates to drug companies, and funneling more money into outpatient and primary care.

Spitzer has also had to scale back on his plan to fully fund the settlement of a decades- long school aide lawsuit. The governor is cutting $350 million dollars from a scheduled increase to needy schools. The legislature is expected to restore much of the school aid money.

The governor again called for selling or leasing the state's lottery to fund a $4 billion dollar endowment for public colleges and universities. Assembly Speaker Sheldon Silver, a Democrat , says he has concerns about what he calls "monetizing" the lottery. The Speaker also objected to the governor's plan to sell the rights to create slot-like machines at the Belmont raceway. Overall, though, the Speaker said he was "pleased" with Spitzer's spending plan.

With all of the trouble in the financial markets, it's uncertain whether budget numbers will still be balanced in the coming months. The governor, in his presentation to state lawmakers, said the degree of economic uncertainty is even more severe than he would have predicted even one week ago.

Diana Fortuna, with the budget watchdog group Citizens Budget Commission, calls the situation "scary", and says it's possible that corrections will need to be made to the governor's math if the markets continue to decline. Fortuna says the effects of this week's downturn in stocks and the financial markets may not be felt for a couple of months, or just around the time the legislature has to approve the budget, on April 1st.

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