New York reaches budget deal

ALBANY, N.Y., March 27 (UPI) -- New York Gov. Andrew Cuomo and legislative leaders said Sunday they had sketched out a $132.5 billion budget that holds the line on major tax increases.

The tentative deal, reached five days before the budget deadline and capping weeks of behind-the-scenes negotiating, also includes a plan to overhaul the state's Medicaid programs and would end a temporary income tax surcharge on the wealthiest state residents, The New York Times reported.

It approved by lawmakers and signed by Cuomo, it would be the first time in five years the state will have a budget before the deadline.

The governor and lawmakers also have agreed to establish a Department of Financial Services by combining the state banking and insurance agencies, along with other consolidations, the Times said.

"I have said that New York is at a crossroads -- one road leading to further dysfunction and decline, the other towards fiscal responsibility and government efficiency," Cuomo said in a statement. "I believe this budget puts us on the right path."

Republican Senate Majority Leader Dean Skelos said the agreement "keeps our Senate Republican commitment to reduce spending, cut taxes and empower the private sector to create jobs."

"We have tightened our belt and protected middle-class families in every region of this state," Kelos said.