STATE'S NEWEST BUDGET DEAL PLANS FOR GAMBLING PROFITS.(MAIN)

Byline: JAMES M. ODATO and JAY JOCHNOWITZ Capitol bureau

State leaders tentatively reached a new budget deal Tuesday that would add about $500 million for education, economic development and social services, and significantly expand gambling in New York to build a cash cushion for years to come.

The deal, if successful, would arrive almost seven months after a budget was due and effectively complete a $79.6 billion bare-bones budget passed by the Legislature in August.

Although Senate Majority Leader Joseph Bruno, R-Brunswick, and Assembly Speaker Sheldon Silver, D-Manhattan, stressed that there are still outstanding issues to resolve, they appear relatively minor. Silver said voting could happen as early as today.

``I want to be clear, I am not announcing that we have a done deal,'' said Bruno at a late afternoon news conference. ``We have a deal that's cooking and it's in the oven ... I'm hoping that everything gets done, concluded, so we take this pie or whatever it is, a roast, a cake, or whatever it is, out of the oven tomorrow.''

The plan, which came together in talks among Bruno, Silver and Gov. George Pataki, would include $100 million for economic development, including the GeNYsis biotechnology program, Centers for Excellence, and the creation of upstate and downstate tourism boards. It also features $200 million for not-for-profit groups and another $200 million in targeted education aid to teaching centers, mentoring and a teacher support program.

Half of the $400 million in spending might not get accomplished this year, aides to Bruno said.

Also included are eight additional Empire Zones and a ``Liberty Zone'' in lower Manhattan that would offer incentives for development.

Most of the immediate money would come from reshuffling funds in the state budget, along with $115 million that the state had set aside in an account for paying back taxes a court had ruled were illegally collected on natural gas piped to New York from Tennessee. The Legislature plans to pass a law making the tax retroactively legal.

The agreement would give Pataki a key item he had sought: more gambling in New York, which the governor says will bolster the economy and create jobs. Bruno said conservative estimates put potential casino revenue to the state at $1 billion a year.

State officials had begun talking in earnest about expanding gambling amid forecasts of dramatic declines in revenue stemming from the World Trade Center disaster Sept. 11. Silver and Bruno said the choice was either to let gambling money leave the state for Canada, Connecticut and New Jersey, or help tourist areas like Niagara Falls and the Catskills compete.

``You're talking two tourist areas that have gone down dramatically ... because of their failure to compete,'' said Silver. ``There are New Yorkers who are dropping their dollars and supporting the governments of New Jersey and Connecticut ... We are trying to keep New York competitive in that regard.''

Several groups and some legislators voiced opposition, and lawsuits are inevitable.

``What they're doing is making New York state really into the world's largest casino and they're doing it in violation of what I believe is the law,'' said Donald Trump, who has long opposed casinos in New York to protect his Atlantic City emporiums.

Trump said he hasn't decided whether to sue. He accused state leaders of using the economic fallout from the Sept. 11 World Trade Center disaster as an excuse for an unprecedented expansion of gaming.

Trump said it is ``unlikely'' that he would participate in a casino project in the Catskills.

The casino deal would allow up to three Catskills casinos and three in the Buffalo-Niagara Falls region. According to a draft bill, only Ulster and Sullivan counties are included in the Catskills, meaning that Greene County, identified in past legislation and in a governor's task force report as a site for a casino, is cut out. Greene County officials have pursued a casino for years, and a developer working with the St. Regis Mohawks had a plan for one in the town of Catskill.

The legislation requires the Seneca Nation, which could build the three casinos in western New York, and whichever tribes develop in the Catskills to allow union organizing.

Some Indian law experts say the provisions may be unenforceable because they aren't planned to be included as components of a gaming compact, but as side deals.

``If there is no waiver of immunity and it's not in a compact then it may not be enforceable. There should be some terms for enforcement of the agreement some way,'' said Kevin Gover, a private practice lawyer and former head of the Bureau of Indian Affairs during the Clinton administration.

He added, however, that tribes would likely honor their side agreements. ``I don't think it's fair to assume the tribes will be looking for a way to escape their agreement with the governor. These provisions for unions are becoming more common.''

The governor's key consultant in the deal, John O'Mara, said he is confident the items are enforceable.

Assembly Environment Committee Chairman Richard Brodsky said he has been pushing to require Native Americans to honor the State Environmental Quality Review Act, which calls for developers to first do environmental impact studies. Such a requirement isn't in the draft law.

Gover said he thinks it will take about two years to get approvals for casinos.

Under the casino deal, the state intends to eventually collect up to 25 percent of slot machine revenue. Local host governments would get one fourth of the state's share.

Assemblyman Richard Smith, D-Hamburg, credited Silver for essentially doubling the sum the Pataki administration had wanted to share with localities.

The Legislature also would allow video lottery terminals at horse racing tracks in a deal that resulted in a substantial compromise between the Assembly and Senate. The Senate, which had been pushing for the electronic gaming at the harness track in Yonkers and at the thoroughbred track at Aqueduct, agreed to include two upstate harness sites -- Monticello and Vernon Downs -- and the Finger Lakes thoroughbred track. VLTs could also be installed at harness tracks at Saratoga Springs in Bruno's district, and Batavia and Buffalo, close to the sites where the Senecas want to set up their casinos, if the county legislatures there agree.

Bruno estimated that the state's share of VLT revenue with the tracks would be $300 million to $400 million annually, a more conservative forecast than industry figures of about three times those amounts.

Only one major issue was said to have threatened the deal in conference discussions Tuesday. Brodsky, a Westchester Democrat, said Silver's conference was urging him to renegotiate funding for the Environmental Protection Fund, which pays for such things as landfills and open space purchases. Pataki in January proposed increasing the fund from $125 million to $150 million. In passing a bare-bones budget in August, the Legislature removed all funding for the program, with plans to negotiate a figure in a supplemental budget.

Silver said the money remains available for the fund, but Pataki refuses to include it. Rather than hold up the budget deal, however, Silver said he would continue to push Pataki for an agreement. FACTS:Highlights of the budget deal:New revenue: Six casinos in the Catskills and Western New York, including slot machines. Estimated future state share: $1 billion annually Participation in Powerball lottery. $200 million annually Video lottery terminals at racetracks: $300 to $400 million annually Release of Tennessee natural gas taxes: $115 million, one time. New spending: Economic development: $100 million Support for nonprofit groups: $200 million Additional school aid: $200 million

STATE'S NEWEST BUDGET DEAL PLANS FOR GAMBLING PROFITS.(MAIN)

Byline: JAMES M. ODATO and JAY JOCHNOWITZ Capitol bureau

State leaders tentatively reached a new budget deal Tuesday that would add about $500 million for education, economic development and social services, and significantly expand gambling in New York to build a cash cushion for years to come.

The deal, if successful, would arrive almost seven months after a budget was due and effectively complete a $79.6 billion bare-bones budget passed by the Legislature in August.

Although Senate Majority Leader Joseph Bruno, R-Brunswick, and Assembly Speaker Sheldon Silver, D-Manhattan, stressed that there are still outstanding issues to resolve, they appear relatively minor. Silver said voting could happen as early as today.

``I want to be clear, I am not announcing that we have a done deal,'' said Bruno at a late afternoon news conference. ``We have a deal that's cooking and it's in the oven ... I'm hoping that everything gets done, concluded, so we take this pie or whatever it is, a roast, a cake, or whatever it is, out of the oven tomorrow.''

The plan, which came together in talks among Bruno, Silver and Gov. George Pataki, would include $100 million for economic development, including the GeNYsis biotechnology program, Centers for Excellence, and the creation of upstate and downstate tourism boards. It also features $200 million for not-for-profit groups and another $200 million in targeted education aid to teaching centers, mentoring and a teacher support program.

Half of the $400 million in spending might not get accomplished this year, aides to Bruno said.

Also included are eight additional Empire Zones and a ``Liberty Zone'' in lower Manhattan that would offer incentives for development.

Most of the immediate money would come from reshuffling funds in the state budget, along with $115 million that the state had set aside in an account for paying back taxes a court had ruled were illegally collected on natural gas piped to New York from Tennessee. The Legislature plans to pass a law making the tax retroactively legal.

The agreement would give Pataki a key item he had sought: more gambling in New York, which the governor says will bolster the economy and create jobs. Bruno said conservative estimates put potential casino revenue to the state at $1 billion a year.

State officials had begun talking in earnest about expanding gambling amid forecasts of dramatic declines in revenue stemming from the World Trade Center disaster Sept. 11. Silver and Bruno said the choice was either to let gambling money leave the state for Canada, Connecticut and New Jersey, or help tourist areas like Niagara Falls and the Catskills compete.

``You're talking two tourist areas that have gone down dramatically ... because of their failure to compete,'' said Silver. ``There are New Yorkers who are dropping their dollars and supporting the governments of New Jersey and Connecticut ... We are trying to keep New York competitive in that regard.''

Several groups and some legislators voiced opposition, and lawsuits are inevitable.

``What they're doing is making New York state really into the world's largest casino and they're doing it in violation of what I believe is the law,'' said Donald Trump, who has long opposed casinos in New York to protect his Atlantic City emporiums.

Trump said he hasn't decided whether to sue. He accused state leaders of using the economic fallout from the Sept. 11 World Trade Center disaster as an excuse for an unprecedented expansion of gaming.

Trump said it is ``unlikely'' that he would participate in a casino project in the Catskills.

The casino deal would allow up to three Catskills casinos and three in the Buffalo-Niagara Falls region. According to a draft bill, only Ulster and Sullivan counties are included in the Catskills, meaning that Greene County, identified in past legislation and in a governor's task force report as a site for a casino, is cut out. Greene County officials have pursued a casino for years, and a developer working with the St. Regis Mohawks had a plan for one in the town of Catskill.

The legislation requires the Seneca Nation, which could build the three casinos in western New York, and whichever tribes develop in the Catskills to allow union organizing.

Some Indian law experts say the provisions may be unenforceable because they aren't planned to be included as components of a gaming compact, but as side deals.

``If there is no waiver of immunity and it's not in a compact then it may not be enforceable. There should be some terms for enforcement of the agreement some way,'' said Kevin Gover, a private practice lawyer and former head of the Bureau of Indian Affairs during the Clinton administration.

He added, however, that tribes would likely honor their side agreements. ``I don't think it's fair to assume the tribes will be looking for a way to escape their agreement with the governor. These provisions for unions are becoming more common.''

The governor's key consultant in the deal, John O'Mara, said he is confident the items are enforceable.

Assembly Environment Committee Chairman Richard Brodsky said he has been pushing to require Native Americans to honor the State Environmental Quality Review Act, which calls for developers to first do environmental impact studies. Such a requirement isn't in the draft law.

Gover said he thinks it will take about two years to get approvals for casinos.

Under the casino deal, the state intends to eventually collect up to 25 percent of slot machine revenue. Local host governments would get one fourth of the state's share.

Assemblyman Richard Smith, D-Hamburg, credited Silver for essentially doubling the sum the Pataki administration had wanted to share with localities.

The Legislature also would allow video lottery terminals at horse racing tracks in a deal that resulted in a substantial compromise between the Assembly and Senate. The Senate, which had been pushing for the electronic gaming at the harness track in Yonkers and at the thoroughbred track at Aqueduct, agreed to include two upstate harness sites -- Monticello and Vernon Downs -- and the Finger Lakes thoroughbred track. VLTs could also be installed at harness tracks at Saratoga Springs in Bruno's district, and Batavia and Buffalo, close to the sites where the Senecas want to set up their casinos, if the county legislatures there agree.

Bruno estimated that the state's share of VLT revenue with the tracks would be $300 million to $400 million annually, a more conservative forecast than industry figures of about three times those amounts.

Only one major issue was said to have threatened the deal in conference discussions Tuesday. Brodsky, a Westchester Democrat, said Silver's conference was urging him to renegotiate funding for the Environmental Protection Fund, which pays for such things as landfills and open space purchases. Pataki in January proposed increasing the fund from $125 million to $150 million. In passing a bare-bones budget in August, the Legislature removed all funding for the program, with plans to negotiate a figure in a supplemental budget.

Silver said the money remains available for the fund, but Pataki refuses to include it. Rather than hold up the budget deal, however, Silver said he would continue to push Pataki for an agreement. FACTS:Highlights of the budget deal:New revenue: Six casinos in the Catskills and Western New York, including slot machines. Estimated future state share: $1 billion annually Participation in Powerball lottery. $200 million annually Video lottery terminals at racetracks: $300 to $400 million annually Release of Tennessee natural gas taxes: $115 million, one time. New spending: Economic development: $100 million Support for nonprofit groups: $200 million Additional school aid: $200 million

STATE'S NEWEST BUDGET DEAL PLANS FOR GAMBLING PROFITS.(MAIN)

Byline: JAMES M. ODATO and JAY JOCHNOWITZ Capitol bureau

State leaders tentatively reached a new budget deal Tuesday that would add about $500 million for education, economic development and social services, and significantly expand gambling in New York to build a cash cushion for years to come.

The deal, if successful, would arrive almost seven months after a budget was due and effectively complete a $79.6 billion bare-bones budget passed by the Legislature in August.

Although Senate Majority Leader Joseph Bruno, R-Brunswick, and Assembly Speaker Sheldon Silver, D-Manhattan, stressed that there are still outstanding issues to resolve, they appear relatively minor. Silver said voting could happen as early as today.

``I want to be clear, I am not announcing that we have a done deal,'' said Bruno at a late afternoon news conference. ``We have a deal that's cooking and it's in the oven ... I'm hoping that everything gets done, concluded, so we take this pie or whatever it is, a roast, a cake, or whatever it is, out of the oven tomorrow.''

The plan, which came together in talks among Bruno, Silver and Gov. George Pataki, would include $100 million for economic development, including the GeNYsis biotechnology program, Centers for Excellence, and the creation of upstate and downstate tourism boards. It also features $200 million for not-for-profit groups and another $200 million in targeted education aid to teaching centers, mentoring and a teacher support program.

Half of the $400 million in spending might not get accomplished this year, aides to Bruno said.

Also included are eight additional Empire Zones and a ``Liberty Zone'' in lower Manhattan that would offer incentives for development.

Most of the immediate money would come from reshuffling funds in the state budget, along with $115 million that the state had set aside in an account for paying back taxes a court had ruled were illegally collected on natural gas piped to New York from Tennessee. The Legislature plans to pass a law making the tax retroactively legal.

The agreement would give Pataki a key item he had sought: more gambling in New York, which the governor says will bolster the economy and create jobs. Bruno said conservative estimates put potential casino revenue to the state at $1 billion a year.

State officials had begun talking in earnest about expanding gambling amid forecasts of dramatic declines in revenue stemming from the World Trade Center disaster Sept. 11. Silver and Bruno said the choice was either to let gambling money leave the state for Canada, Connecticut and New Jersey, or help tourist areas like Niagara Falls and the Catskills compete.

``You're talking two tourist areas that have gone down dramatically ... because of their failure to compete,'' said Silver. ``There are New Yorkers who are dropping their dollars and supporting the governments of New Jersey and Connecticut ... We are trying to keep New York competitive in that regard.''

Several groups and some legislators voiced opposition, and lawsuits are inevitable.

``What they're doing is making New York state really into the world's largest casino and they're doing it in violation of what I believe is the law,'' said Donald Trump, who has long opposed casinos in New York to protect his Atlantic City emporiums.

Trump said he hasn't decided whether to sue. He accused state leaders of using the economic fallout from the Sept. 11 World Trade Center disaster as an excuse for an unprecedented expansion of gaming.

Trump said it is ``unlikely'' that he would participate in a casino project in the Catskills.

The casino deal would allow up to three Catskills casinos and three in the Buffalo-Niagara Falls region. According to a draft bill, only Ulster and Sullivan counties are included in the Catskills, meaning that Greene County, identified in past legislation and in a governor's task force report as a site for a casino, is cut out. Greene County officials have pursued a casino for years, and a developer working with the St. Regis Mohawks had a plan for one in the town of Catskill.

The legislation requires the Seneca Nation, which could build the three casinos in western New York, and whichever tribes develop in the Catskills to allow union organizing.

Some Indian law experts say the provisions may be unenforceable because they aren't planned to be included as components of a gaming compact, but as side deals.

``If there is no waiver of immunity and it's not in a compact then it may not be enforceable. There should be some terms for enforcement of the agreement some way,'' said Kevin Gover, a private practice lawyer and former head of the Bureau of Indian Affairs during the Clinton administration.

He added, however, that tribes would likely honor their side agreements. ``I don't think it's fair to assume the tribes will be looking for a way to escape their agreement with the governor. These provisions for unions are becoming more common.''

The governor's key consultant in the deal, John O'Mara, said he is confident the items are enforceable.

Assembly Environment Committee Chairman Richard Brodsky said he has been pushing to require Native Americans to honor the State Environmental Quality Review Act, which calls for developers to first do environmental impact studies. Such a requirement isn't in the draft law.

Gover said he thinks it will take about two years to get approvals for casinos.

Under the casino deal, the state intends to eventually collect up to 25 percent of slot machine revenue. Local host governments would get one fourth of the state's share.

Assemblyman Richard Smith, D-Hamburg, credited Silver for essentially doubling the sum the Pataki administration had wanted to share with localities.

The Legislature also would allow video lottery terminals at horse racing tracks in a deal that resulted in a substantial compromise between the Assembly and Senate. The Senate, which had been pushing for the electronic gaming at the harness track in Yonkers and at the thoroughbred track at Aqueduct, agreed to include two upstate harness sites -- Monticello and Vernon Downs -- and the Finger Lakes thoroughbred track. VLTs could also be installed at harness tracks at Saratoga Springs in Bruno's district, and Batavia and Buffalo, close to the sites where the Senecas want to set up their casinos, if the county legislatures there agree.

Bruno estimated that the state's share of VLT revenue with the tracks would be $300 million to $400 million annually, a more conservative forecast than industry figures of about three times those amounts.

Only one major issue was said to have threatened the deal in conference discussions Tuesday. Brodsky, a Westchester Democrat, said Silver's conference was urging him to renegotiate funding for the Environmental Protection Fund, which pays for such things as landfills and open space purchases. Pataki in January proposed increasing the fund from $125 million to $150 million. In passing a bare-bones budget in August, the Legislature removed all funding for the program, with plans to negotiate a figure in a supplemental budget.

Silver said the money remains available for the fund, but Pataki refuses to include it. Rather than hold up the budget deal, however, Silver said he would continue to push Pataki for an agreement. FACTS:Highlights of the budget deal:New revenue: Six casinos in the Catskills and Western New York, including slot machines. Estimated future state share: $1 billion annually Participation in Powerball lottery. $200 million annually Video lottery terminals at racetracks: $300 to $400 million annually Release of Tennessee natural gas taxes: $115 million, one time. New spending: Economic development: $100 million Support for nonprofit groups: $200 million Additional school aid: $200 million

STATE'S NEWEST BUDGET DEAL PLANS FOR GAMBLING PROFITS.(MAIN)

Byline: JAMES M. ODATO and JAY JOCHNOWITZ Capitol bureau

State leaders tentatively reached a new budget deal Tuesday that would add about $500 million for education, economic development and social services, and significantly expand gambling in New York to build a cash cushion for years to come.

The deal, if successful, would arrive almost seven months after a budget was due and effectively complete a $79.6 billion bare-bones budget passed by the Legislature in August.

Although Senate Majority Leader Joseph Bruno, R-Brunswick, and Assembly Speaker Sheldon Silver, D-Manhattan, stressed that there are still outstanding issues to resolve, they appear relatively minor. Silver said voting could happen as early as today.

``I want to be clear, I am not announcing that we have a done deal,'' said Bruno at a late afternoon news conference. ``We have a deal that's cooking and it's in the oven ... I'm hoping that everything gets done, concluded, so we take this pie or whatever it is, a roast, a cake, or whatever it is, out of the oven tomorrow.''

The plan, which came together in talks among Bruno, Silver and Gov. George Pataki, would include $100 million for economic development, including the GeNYsis biotechnology program, Centers for Excellence, and the creation of upstate and downstate tourism boards. It also features $200 million for not-for-profit groups and another $200 million in targeted education aid to teaching centers, mentoring and a teacher support program.

Half of the $400 million in spending might not get accomplished this year, aides to Bruno said.

Also included are eight additional Empire Zones and a ``Liberty Zone'' in lower Manhattan that would offer incentives for development.

Most of the immediate money would come from reshuffling funds in the state budget, along with $115 million that the state had set aside in an account for paying back taxes a court had ruled were illegally collected on natural gas piped to New York from Tennessee. The Legislature plans to pass a law making the tax retroactively legal.

The agreement would give Pataki a key item he had sought: more gambling in New York, which the governor says will bolster the economy and create jobs. Bruno said conservative estimates put potential casino revenue to the state at $1 billion a year.

State officials had begun talking in earnest about expanding gambling amid forecasts of dramatic declines in revenue stemming from the World Trade Center disaster Sept. 11. Silver and Bruno said the choice was either to let gambling money leave the state for Canada, Connecticut and New Jersey, or help tourist areas like Niagara Falls and the Catskills compete.

``You're talking two tourist areas that have gone down dramatically ... because of their failure to compete,'' said Silver. ``There are New Yorkers who are dropping their dollars and supporting the governments of New Jersey and Connecticut ... We are trying to keep New York competitive in that regard.''

Several groups and some legislators voiced opposition, and lawsuits are inevitable.

``What they're doing is making New York state really into the world's largest casino and they're doing it in violation of what I believe is the law,'' said Donald Trump, who has long opposed casinos in New York to protect his Atlantic City emporiums.

Trump said he hasn't decided whether to sue. He accused state leaders of using the economic fallout from the Sept. 11 World Trade Center disaster as an excuse for an unprecedented expansion of gaming.

Trump said it is ``unlikely'' that he would participate in a casino project in the Catskills.

The casino deal would allow up to three Catskills casinos and three in the Buffalo-Niagara Falls region. According to a draft bill, only Ulster and Sullivan counties are included in the Catskills, meaning that Greene County, identified in past legislation and in a governor's task force report as a site for a casino, is cut out. Greene County officials have pursued a casino for years, and a developer working with the St. Regis Mohawks had a plan for one in the town of Catskill.

The legislation requires the Seneca Nation, which could build the three casinos in western New York, and whichever tribes develop in the Catskills to allow union organizing.

Some Indian law experts say the provisions may be unenforceable because they aren't planned to be included as components of a gaming compact, but as side deals.

``If there is no waiver of immunity and it's not in a compact then it may not be enforceable. There should be some terms for enforcement of the agreement some way,'' said Kevin Gover, a private practice lawyer and former head of the Bureau of Indian Affairs during the Clinton administration.

He added, however, that tribes would likely honor their side agreements. ``I don't think it's fair to assume the tribes will be looking for a way to escape their agreement with the governor. These provisions for unions are becoming more common.''

The governor's key consultant in the deal, John O'Mara, said he is confident the items are enforceable.

Assembly Environment Committee Chairman Richard Brodsky said he has been pushing to require Native Americans to honor the State Environmental Quality Review Act, which calls for developers to first do environmental impact studies. Such a requirement isn't in the draft law.

Gover said he thinks it will take about two years to get approvals for casinos.

Under the casino deal, the state intends to eventually collect up to 25 percent of slot machine revenue. Local host governments would get one fourth of the state's share.

Assemblyman Richard Smith, D-Hamburg, credited Silver for essentially doubling the sum the Pataki administration had wanted to share with localities.

The Legislature also would allow video lottery terminals at horse racing tracks in a deal that resulted in a substantial compromise between the Assembly and Senate. The Senate, which had been pushing for the electronic gaming at the harness track in Yonkers and at the thoroughbred track at Aqueduct, agreed to include two upstate harness sites -- Monticello and Vernon Downs -- and the Finger Lakes thoroughbred track. VLTs could also be installed at harness tracks at Saratoga Springs in Bruno's district, and Batavia and Buffalo, close to the sites where the Senecas want to set up their casinos, if the county legislatures there agree.

Bruno estimated that the state's share of VLT revenue with the tracks would be $300 million to $400 million annually, a more conservative forecast than industry figures of about three times those amounts.

Only one major issue was said to have threatened the deal in conference discussions Tuesday. Brodsky, a Westchester Democrat, said Silver's conference was urging him to renegotiate funding for the Environmental Protection Fund, which pays for such things as landfills and open space purchases. Pataki in January proposed increasing the fund from $125 million to $150 million. In passing a bare-bones budget in August, the Legislature removed all funding for the program, with plans to negotiate a figure in a supplemental budget.

Silver said the money remains available for the fund, but Pataki refuses to include it. Rather than hold up the budget deal, however, Silver said he would continue to push Pataki for an agreement. FACTS:Highlights of the budget deal:New revenue: Six casinos in the Catskills and Western New York, including slot machines. Estimated future state share: $1 billion annually Participation in Powerball lottery. $200 million annually Video lottery terminals at racetracks: $300 to $400 million annually Release of Tennessee natural gas taxes: $115 million, one time. New spending: Economic development: $100 million Support for nonprofit groups: $200 million Additional school aid: $200 million

STATE'S NEWEST BUDGET DEAL PLANS FOR GAMBLING PROFITS.(MAIN)

Byline: JAMES M. ODATO and JAY JOCHNOWITZ Capitol bureau

State leaders tentatively reached a new budget deal Tuesday that would add about $500 million for education, economic development and social services, and significantly expand gambling in New York to build a cash cushion for years to come.

The deal, if successful, would arrive almost seven months after a budget was due and effectively complete a $79.6 billion bare-bones budget passed by the Legislature in August.

Although Senate Majority Leader Joseph Bruno, R-Brunswick, and Assembly Speaker Sheldon Silver, D-Manhattan, stressed that there are still outstanding issues to resolve, they appear relatively minor. Silver said voting could happen as early as today.

``I want to be clear, I am not announcing that we have a done deal,'' said Bruno at a late afternoon news conference. ``We have a deal that's cooking and it's in the oven ... I'm hoping that everything gets done, concluded, so we take this pie or whatever it is, a roast, a cake, or whatever it is, out of the oven tomorrow.''

The plan, which came together in talks among Bruno, Silver and Gov. George Pataki, would include $100 million for economic development, including the GeNYsis biotechnology program, Centers for Excellence, and the creation of upstate and downstate tourism boards. It also features $200 million for not-for-profit groups and another $200 million in targeted education aid to teaching centers, mentoring and a teacher support program.

Half of the $400 million in spending might not get accomplished this year, aides to Bruno said.

Also included are eight additional Empire Zones and a ``Liberty Zone'' in lower Manhattan that would offer incentives for development.

Most of the immediate money would come from reshuffling funds in the state budget, along with $115 million that the state had set aside in an account for paying back taxes a court had ruled were illegally collected on natural gas piped to New York from Tennessee. The Legislature plans to pass a law making the tax retroactively legal.

The agreement would give Pataki a key item he had sought: more gambling in New York, which the governor says will bolster the economy and create jobs. Bruno said conservative estimates put potential casino revenue to the state at $1 billion a year.

State officials had begun talking in earnest about expanding gambling amid forecasts of dramatic declines in revenue stemming from the World Trade Center disaster Sept. 11. Silver and Bruno said the choice was either to let gambling money leave the state for Canada, Connecticut and New Jersey, or help tourist areas like Niagara Falls and the Catskills compete.

``You're talking two tourist areas that have gone down dramatically ... because of their failure to compete,'' said Silver. ``There are New Yorkers who are dropping their dollars and supporting the governments of New Jersey and Connecticut ... We are trying to keep New York competitive in that regard.''

Several groups and some legislators voiced opposition, and lawsuits are inevitable.

``What they're doing is making New York state really into the world's largest casino and they're doing it in violation of what I believe is the law,'' said Donald Trump, who has long opposed casinos in New York to protect his Atlantic City emporiums.

Trump said he hasn't decided whether to sue. He accused state leaders of using the economic fallout from the Sept. 11 World Trade Center disaster as an excuse for an unprecedented expansion of gaming.

Trump said it is ``unlikely'' that he would participate in a casino project in the Catskills.

The casino deal would allow up to three Catskills casinos and three in the Buffalo-Niagara Falls region. According to a draft bill, only Ulster and Sullivan counties are included in the Catskills, meaning that Greene County, identified in past legislation and in a governor's task force report as a site for a casino, is cut out. Greene County officials have pursued a casino for years, and a developer working with the St. Regis Mohawks had a plan for one in the town of Catskill.

The legislation requires the Seneca Nation, which could build the three casinos in western New York, and whichever tribes develop in the Catskills to allow union organizing.

Some Indian law experts say the provisions may be unenforceable because they aren't planned to be included as components of a gaming compact, but as side deals.

``If there is no waiver of immunity and it's not in a compact then it may not be enforceable. There should be some terms for enforcement of the agreement some way,'' said Kevin Gover, a private practice lawyer and former head of the Bureau of Indian Affairs during the Clinton administration.

He added, however, that tribes would likely honor their side agreements. ``I don't think it's fair to assume the tribes will be looking for a way to escape their agreement with the governor. These provisions for unions are becoming more common.''

The governor's key consultant in the deal, John O'Mara, said he is confident the items are enforceable.

Assembly Environment Committee Chairman Richard Brodsky said he has been pushing to require Native Americans to honor the State Environmental Quality Review Act, which calls for developers to first do environmental impact studies. Such a requirement isn't in the draft law.

Gover said he thinks it will take about two years to get approvals for casinos.

Under the casino deal, the state intends to eventually collect up to 25 percent of slot machine revenue. Local host governments would get one fourth of the state's share.

Assemblyman Richard Smith, D-Hamburg, credited Silver for essentially doubling the sum the Pataki administration had wanted to share with localities.

The Legislature also would allow video lottery terminals at horse racing tracks in a deal that resulted in a substantial compromise between the Assembly and Senate. The Senate, which had been pushing for the electronic gaming at the harness track in Yonkers and at the thoroughbred track at Aqueduct, agreed to include two upstate harness sites -- Monticello and Vernon Downs -- and the Finger Lakes thoroughbred track. VLTs could also be installed at harness tracks at Saratoga Springs in Bruno's district, and Batavia and Buffalo, close to the sites where the Senecas want to set up their casinos, if the county legislatures there agree.

Bruno estimated that the state's share of VLT revenue with the tracks would be $300 million to $400 million annually, a more conservative forecast than industry figures of about three times those amounts.

Only one major issue was said to have threatened the deal in conference discussions Tuesday. Brodsky, a Westchester Democrat, said Silver's conference was urging him to renegotiate funding for the Environmental Protection Fund, which pays for such things as landfills and open space purchases. Pataki in January proposed increasing the fund from $125 million to $150 million. In passing a bare-bones budget in August, the Legislature removed all funding for the program, with plans to negotiate a figure in a supplemental budget.

Silver said the money remains available for the fund, but Pataki refuses to include it. Rather than hold up the budget deal, however, Silver said he would continue to push Pataki for an agreement. FACTS:Highlights of the budget deal:New revenue: Six casinos in the Catskills and Western New York, including slot machines. Estimated future state share: $1 billion annually Participation in Powerball lottery. $200 million annually Video lottery terminals at racetracks: $300 to $400 million annually Release of Tennessee natural gas taxes: $115 million, one time. New spending: Economic development: $100 million Support for nonprofit groups: $200 million Additional school aid: $200 million

STATE'S NEWEST BUDGET DEAL PLANS FOR GAMBLING PROFITS.(MAIN)

Byline: JAMES M. ODATO and JAY JOCHNOWITZ Capitol bureau

State leaders tentatively reached a new budget deal Tuesday that would add about $500 million for education, economic development and social services, and significantly expand gambling in New York to build a cash cushion for years to come.

The deal, if successful, would arrive almost seven months after a budget was due and effectively complete a $79.6 billion bare-bones budget passed by the Legislature in August.

Although Senate Majority Leader Joseph Bruno, R-Brunswick, and Assembly Speaker Sheldon Silver, D-Manhattan, stressed that there are still outstanding issues to resolve, they appear relatively minor. Silver said voting could happen as early as today.

``I want to be clear, I am not announcing that we have a done deal,'' said Bruno at a late afternoon news conference. ``We have a deal that's cooking and it's in the oven ... I'm hoping that everything gets done, concluded, so we take this pie or whatever it is, a roast, a cake, or whatever it is, out of the oven tomorrow.''

The plan, which came together in talks among Bruno, Silver and Gov. George Pataki, would include $100 million for economic development, including the GeNYsis biotechnology program, Centers for Excellence, and the creation of upstate and downstate tourism boards. It also features $200 million for not-for-profit groups and another $200 million in targeted education aid to teaching centers, mentoring and a teacher support program.

Half of the $400 million in spending might not get accomplished this year, aides to Bruno said.

Also included are eight additional Empire Zones and a ``Liberty Zone'' in lower Manhattan that would offer incentives for development.

Most of the immediate money would come from reshuffling funds in the state budget, along with $115 million that the state had set aside in an account for paying back taxes a court had ruled were illegally collected on natural gas piped to New York from Tennessee. The Legislature plans to pass a law making the tax retroactively legal.

The agreement would give Pataki a key item he had sought: more gambling in New York, which the governor says will bolster the economy and create jobs. Bruno said conservative estimates put potential casino revenue to the state at $1 billion a year.

State officials had begun talking in earnest about expanding gambling amid forecasts of dramatic declines in revenue stemming from the World Trade Center disaster Sept. 11. Silver and Bruno said the choice was either to let gambling money leave the state for Canada, Connecticut and New Jersey, or help tourist areas like Niagara Falls and the Catskills compete.

``You're talking two tourist areas that have gone down dramatically ... because of their failure to compete,'' said Silver. ``There are New Yorkers who are dropping their dollars and supporting the governments of New Jersey and Connecticut ... We are trying to keep New York competitive in that regard.''

Several groups and some legislators voiced opposition, and lawsuits are inevitable.

``What they're doing is making New York state really into the world's largest casino and they're doing it in violation of what I believe is the law,'' said Donald Trump, who has long opposed casinos in New York to protect his Atlantic City emporiums.

Trump said he hasn't decided whether to sue. He accused state leaders of using the economic fallout from the Sept. 11 World Trade Center disaster as an excuse for an unprecedented expansion of gaming.

Trump said it is ``unlikely'' that he would participate in a casino project in the Catskills.

The casino deal would allow up to three Catskills casinos and three in the Buffalo-Niagara Falls region. According to a draft bill, only Ulster and Sullivan counties are included in the Catskills, meaning that Greene County, identified in past legislation and in a governor's task force report as a site for a casino, is cut out. Greene County officials have pursued a casino for years, and a developer working with the St. Regis Mohawks had a plan for one in the town of Catskill.

The legislation requires the Seneca Nation, which could build the three casinos in western New York, and whichever tribes develop in the Catskills to allow union organizing.

Some Indian law experts say the provisions may be unenforceable because they aren't planned to be included as components of a gaming compact, but as side deals.

``If there is no waiver of immunity and it's not in a compact then it may not be enforceable. There should be some terms for enforcement of the agreement some way,'' said Kevin Gover, a private practice lawyer and former head of the Bureau of Indian Affairs during the Clinton administration.

He added, however, that tribes would likely honor their side agreements. ``I don't think it's fair to assume the tribes will be looking for a way to escape their agreement with the governor. These provisions for unions are becoming more common.''

The governor's key consultant in the deal, John O'Mara, said he is confident the items are enforceable.

Assembly Environment Committee Chairman Richard Brodsky said he has been pushing to require Native Americans to honor the State Environmental Quality Review Act, which calls for developers to first do environmental impact studies. Such a requirement isn't in the draft law.

Gover said he thinks it will take about two years to get approvals for casinos.

Under the casino deal, the state intends to eventually collect up to 25 percent of slot machine revenue. Local host governments would get one fourth of the state's share.

Assemblyman Richard Smith, D-Hamburg, credited Silver for essentially doubling the sum the Pataki administration had wanted to share with localities.

The Legislature also would allow video lottery terminals at horse racing tracks in a deal that resulted in a substantial compromise between the Assembly and Senate. The Senate, which had been pushing for the electronic gaming at the harness track in Yonkers and at the thoroughbred track at Aqueduct, agreed to include two upstate harness sites -- Monticello and Vernon Downs -- and the Finger Lakes thoroughbred track. VLTs could also be installed at harness tracks at Saratoga Springs in Bruno's district, and Batavia and Buffalo, close to the sites where the Senecas want to set up their casinos, if the county legislatures there agree.

Bruno estimated that the state's share of VLT revenue with the tracks would be $300 million to $400 million annually, a more conservative forecast than industry figures of about three times those amounts.

Only one major issue was said to have threatened the deal in conference discussions Tuesday. Brodsky, a Westchester Democrat, said Silver's conference was urging him to renegotiate funding for the Environmental Protection Fund, which pays for such things as landfills and open space purchases. Pataki in January proposed increasing the fund from $125 million to $150 million. In passing a bare-bones budget in August, the Legislature removed all funding for the program, with plans to negotiate a figure in a supplemental budget.

Silver said the money remains available for the fund, but Pataki refuses to include it. Rather than hold up the budget deal, however, Silver said he would continue to push Pataki for an agreement. FACTS:Highlights of the budget deal:New revenue: Six casinos in the Catskills and Western New York, including slot machines. Estimated future state share: $1 billion annually Participation in Powerball lottery. $200 million annually Video lottery terminals at racetracks: $300 to $400 million annually Release of Tennessee natural gas taxes: $115 million, one time. New spending: Economic development: $100 million Support for nonprofit groups: $200 million Additional school aid: $200 million