ALBANY — Insiders said a $50 million “hedge fund” tax was all but dead yesterday after Assembly Speaker Sheldon Silver told The Post there was “a good chance” lawmakers would strip it from a final budget deal.
The tax on out-of-state hedge-fund executives with offices in New York was dubbed a job killer by Mayor Bloomberg.
Connecticut Gov. Jodi Rell had exploited the proposed tax in a high-profile effort to woo well-heeled execs from Manhattan to the Nutmeg State.
“There’s a good chance . . . that it will not be adopted,” Silver (D-Manhattan) said. “Nobody wants to drive businesses out of the state.”
The tax is currently part of a $1 billion revenue bill awaiting passage in the Senate to close out the state’s $134.4 billion spending plan and end the four-month budget fight.
Gov. Paterson first proposed the tax in December 2008, and resurrected it last month as way to finish off closing a $9.2 billion budget gap.
The Democratic governor backed off after the tax passed the Assembly and Rell moved in to siphon hedge-fund business to Connecticut, with its lower income taxes.
A Senate source confirmed that lawmakers reached a “soft agreement” Thursday night to ditch the tax.
The source said any deal was contingent on Silver accepting plans to cover the loss of up to $1 billion in federal Medicaid, and give public colleges and universities more freedom to set tuition.
The move comes just days before Rell planned to pitch executives on relocating at an “intimate, direct and private” dinner at The Water’s Edge at Giovanni’s, in Darien, Conn., Monday.
Rell spokesman Adam Liegot declined to comment on Albany’s effort to kill the measure, but said the Darien meeting was still on.
Tim Selby, president of the New York Hedge Fund Roundtable, and 25 to 30 other executives were slated to attend.
Selby said that while “it’s a positive step” to kill the tax, Albany needs to also enact legislation that shows pols “embrace” the powerful hedge-fund industry.
“How about enacting legislation that actually helps to develop the industry and grow jobs?” Selby said. “What is New York doing to compete with Connecticut?
“They are doing an outreach, having this dinner and bringing their biggest leader from the state to show they appreciate the industry. All our legislators did was back off.”
Sources said Bloomberg, himself a billionaire, personally appealed to hedge-funders to stay in the city after Rell made her pitch.
“This isn’t funny,” he said last week. “This is our jobs. She’s doing what she should do, and we should be out there doing the same thing: make this a more attractive place to do business.”
Additional reporting by Kaja Whitehouse