New York Agrees to Congestion Pricing and a Mansion Tax in $175 Billion Budget Deal

ALBANY — After weeks of intraparty bickering, the New York State Legislature and Gov. Andrew M. Cuomo agreed to a $175 billion budget early Sunday morning, packed with a bevy of progressive programs, including changes to the cash bail system, a new tax on high-end homes and a novel plan to charge motorists to drive into Manhattan’s busiest stretches.

In typical fashion for a State Capitol known for its peculiar and sometimes dysfunctional habits, the deal was announced after midnight via a five-page news release. But that rollout belied both the significance of some of the changes in policy agreed to in Albany, as well as the size of the state’s spending, second only to California.

Lawmakers were set to vote on the budget later Sunday.

Chief among the new policies was congestion pricing, the first such plan in the nation, and one that is likely to affect the habits of millions of New Yorkers and tourists who work and play in Manhattan. Under the plan agreed to on Sunday, vehicles traveling beneath 60th Street will be subject to a toll, revenue that will be funneled into the city’s beleaguered subways and other regional transportation needs.

The agreement also calls for an overhaul of the agency that oversees New York City’s bus and subway system, the Metropolitan Transportation Authority; the agency has been scapegoated in recent months by Mr. Cuomo, a third-term Democrat who effectively controls the authority and has been heavily criticized for the subway’s shoddy performance. As part of the budget deal, the authority’s policies will be changed to encourage speedier capital projects and increase oversight.

The budget, which is due April 1, also typically contains many nonfiscal policies, and this year was no exception, including a raft of changes to the state’s criminal justice system.

Under a deal struck late last week, the state will eliminate cash bail for most misdemeanors and nonviolent crimes, though it will not be completely eliminated as sought by some of the legislature’s more liberal members. Lawmakers and Mr. Cuomo also agreed to a number of changes to discovery — allowing defendants more access to evidence that prosecutors intend to use against them — and processes to ensure speedy trials.

The compromise on bail, which came after law enforcement officials expressed concerns about the total elimination of such a system, is one of many that appear in the budget.

Another is the so-called pied-à-terre tax, an annual recurring tax on second homes worth $5 million or more. Although the tax had the backing of state leaders, it evaporated under pressure from real estate interests and legal concerns. In its place, lawmakers and Mr. Cuomo agreed to a “mansion tax,” a one-time levy that would be charged at the point of sale on multimillion-dollar homes; the tax rate would top out at 4.15 percent on the sale of properties worth $25 million or more.

A plan to ban plastic bags in the state was also included in the budget, but it makes a fee on paper bags optional, which some environmentalists worry will lessen the popularity of reusable bags.

Mr. Cuomo trumpeted several other accomplishments, including a permanent property tax cap of 2 percent, something he had said was nonnegotiable. At the same time, the state was to establish a “consistent framework for the collection of required sales taxes by internet marketplace providers.”

Mr. Cuomo, who was been criticized for participating in big-money fund-raisers, also announced a commission to study and implement the idea of providing up to $100 million annually in public financing for campaigns for legislative and statewide offices, including his own. What exactly that program would look like will be up to the commission, whose report is due on Dec. 1.

The negotiations over the budget were the first of Mr. Cuomo’s more than eight years in office in which he dealt with an all-Democratic Legislature, and came at a time of increased financial stress for the state, which saw its income tax revenue dip sharply in recent months. That stress, and the new power dynamic, created significant intraparty tension as Mr. Cuomo and other members of his administration repeatedly accused lawmakers of having unrealistic expectations and a lack of experience.