Spitzer and Lawmakers Agree on State Budget

The state legislature has reached agreement on the $121 billion state budget, though much of the spending plan was not completed by the midnight deadline.

The budget cuts more than a billion dollars in Medicaid spending but expands the Child Health Plus insurance program, providing coverage for 400,000 uninsured children. Governor Spitzer gave up on $356 million in cuts he'd proposed for hospitals and nursing homes.

The property tax subsidy would increase under the $1.3 billion relief plan. The budget will also close a business tax loophole used by a few major corporations.

Nearly $2 billion in school aid will be added to the $17 billion spent last year, and the state will authorize up to 100 more charter schools - doubling the current limit - with as many as 50 in New York City.

The agreement authorizes $100 million for high-tech research and development, including stem cell research. Dropped in the negotiations were Spitzer's expanded bottle bill, pay raises for judges and legislators, and a tax deduction for families with kids in private schools.

The governor also compromised on a plan to stop $328 million in unrestricted aid payments to the city. The budget restores $20 million this fiscal year and the full amount next year.