NEW YORK (Reuters) - New York legislators approved a $137.9 billion budget for the state's 2014-15 fiscal year late on Monday, providing funding for statewide full-day pre-kindergarten programs and keeping spending growth below 2 percent.
Passed on the last day of the state's fiscal year, the approval marks the state's fourth on-time budget in a row, something that has not happened for nearly four decades and not under a single governor since Nelson Rockefeller.
The spending blueprint includes an increase of more than 5 percent in school aid, of which $340 million will be used to roll out pre-kindergarten and expand after-school programs across the state.
Governor Andrew Cuomo signed the budget into law at a meeting with legislative leaders on Tuesday morning.
"This state's administration has delivered four on-time budgets in a row - under the same governor and legislative leadership - for the first time in more than forty years," Cuomo said in a statement.
Cuomo was able to push through his signature tax relief agenda. The new budget earmarks $1.5 billion in property tax relief for homeowners and establishes a 20 percent real estate property tax credit for manufacturers who own or lease property. Beginning in 2014, the tax rate on income for all manufacturers will fall to zero from the current 5.9 percent.
The budget totals $142.8 billion when combined with federal aid for Superstorm Sandy and the Affordable Care Act, making it $2.5 billion, or 1.8 percent, more than the previous year.
Under Cuomo, who is up for reelection in November, New York is shedding its reputation for budgetary dysfunction. Since 1978 the state budget has been an average of 36 days late, in some years running into July and even August, according to the state's budget office.
Unlike that of most other states, New York's fiscal year starts on April 1 instead of July 1.
Cuomo has long been linked to a run for the Democratic presidential nomination and the comparison with Rockefeller, who was vice president under Gerald Ford, may turn out to be an auspicious one for Cuomo.
Elizabeth Lynam, a long-time state budget watcher at the Citizens Budget Commission, says Cuomo has brought a consensus-building approach to the job over the last three years and that is allowing him to bridge divides.
"Other governors have held out, taking the criticism for being late in favor of better leverage with the legislature," said Lynam. "He is willing to compromise; he makes that clear."
New York City Mayor Bill de Blasio had made a high-profile pitch to hike taxes on the city's wealthy to help fund those programs in the city, but he needed the state legislature's approval.
Lawmakers rejected de Blasio's funding scheme, instead allocating state funds. New York City will get the lion's share, about $300 million, leaving other school districts around the state with $40 million.
Under the new budget, charter schools will be eligible for the pre-kindergarten funding. The spending plan also increases tuition funding for charter schools over three years, up to $500 per student in the third year.
On Saturday, after lawmakers had reached a budget agreement with Cuomo that allowed for Monday's vote, de Blasio said the state made a powerful and historic decision that will change the lives of tens of thousands of children.
The budget also includes a plan to borrow $2 billion through the sale of general obligation bonds, which must be approved by voters in November, to provide high-speed Internet and other technology and classroom construction to school districts.
Reporting by Edward Krudy and Hilary Russ; Editing by Sofina Mirza-Reid and Gunna Dickson