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June 8, 2006

Reprinted from the Times Union, March 28, 2006

State Aid for Albany Gutted

Legislature trims $322M from Pataki's proposal for city, possibly putting convention center project in jeopardy

By JAMES M. ODATO, Hearst Times Union Capitol bureau

First published: Tuesday, March 28, 2006

ALBANY -- The Legislature stunned Albany Mayor Jerry Jennings by stripping away $322 million of Gov. George Pataki's proposed extra state aid for the city, possibly putting a downtown convention center and hotel project in peril.

"If this stays the way it is, the convention center will never happen," Jennings said after confronting several lawmakers Monday. "It's dead if this bill goes through."

So angry that he mused about wanting to "blow this place up," Jennings clutched the key pages of a local government aid bill that had been printed overnight, part of a roughly $112 billion budget plan lawmakers are piecing together.

The Assembly and Senate restructured Pataki's payment-in-lieu-of-tax program even though Jennings was counting on much of it to back up the financing for a hotel, a key ingredient of the proposed $200 million convention center project.

The Legislature's plan gives Albany just a one-year, $6 million allotment of extra PILOT aid instead of the $328 million Pataki had proposed through 2038. The rest was cut from the budget based on a consensus agreement, said Sen. Hugh Farley, R-Niskayuna, who negotiated the issue with the Assembly. Albany can still rely on $205.7 million in previously enacted PILOT funding through 2029.

While Jennings fumed, Saratoga Springs Mayor Valerie Keehn was delighted with the legislative budget plan that included extra revenues for hosting a video lottery terminal casino and potentially up to $12 million for her city's own convention center.

As for the Albany project, Assemblymen Ronald Canestrari, D-Cohoes; Jack McEneny, D-Albany; and Sen. Neil Breslin, D-Bethlehem, said Jennings overreacted. They joined Senate Majority Leader Joseph Bruno and Assembly Speaker Sheldon Silver in saying the budget deal still gives the city $6 million more than it could count on a year ago, and that should be enough to keep the convention center project on track.

"Nothing's dead," Canestrari said.

Bruno said Jennings' financing arrangements aren't clear to him because the two haven't met.

"I don't know what the ramifications are. All I knew was that $6 million was important for this year and we're trying to help that happen," he said, adding there seems to be confusion over where Albany leaders want the center to be built. "They have to get their own act together... It's time to get decisive."

Jennings said the extra PILOT funding was essential to back up $85 million in borrowing for the hotel. The extra aid also is necessary for city operations, Jennings said. If the extra $6 million a year Pataki planned from 2006 through 2010 doesn't come through, he said, layoffs may be necessary.

McEneny said the Senate wasn't even keen on giving the extra $6 million in 2006, but the Assembly won that one-year commitment.

The mayor said he hopes to work with Pataki to get the PILOT money back into the final budget.

For Saratoga Springs, Bruno negotiated hundreds of thousands of dollars in extra state aid for hosting the Saratoga Gaming & Raceway video lottery casino.

Under a deal also pushed by Assembly Minority Leader James Tedisco, Saratoga Springs will get a sum equal to 3.5 percent of video lottery terminal net revenues starting in the 2007-2008 budget year. The money should be good for $2.6 million a year, Bruno's aides said. Saratoga County will get about $860,000 a year.

Pataki had planned to give communities hosting VLT casinos some extra revenue, but only those with fiscal problems, such as Yonkers. However, the legislative budget plan struck language that tied VLT aid to municipalities with a heavy percentage of children in free-lunch school programs.

Bruno said he also is working on getting $12 million that the Saratoga Springs City Center is seeking for expansion. The aid, he said, will be part of a capital spending plan to be disclosed later.

Meanwhile, lawmakers are still working out education, tax cut and economic development components of the legislative budget. Much of that should get wrapped up today, Bruno said, so budget bills can be passed from Wednesday through Friday.

A deal is coming together that would provide for child tax credits along the lines of the Assembly Democrats' plan for up to $300 per year per child to help with costs of raising children, a source close to the talks said. The deal would also provide for some tax cuts for small businesses, a reduced corporate tax for manufacturers and a tax relief for agribusinesses.


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