From the Morning Memo:

Gov. Andrew Cuomo this week continued his simmering disagreement with Senate Republicans over tax and fee increases in the budget, saying that without the revenue, the state would have to cut back on health care and school spending.

“If they don’t approve that and if we have no revenues, then they’re going to be voting for a cut in education and a cut in Medicaid,” Cuomo said. “If that’s what they want to do, then let the Republicans do that.”

Cuomo’s $168 billion spending proposal would increase taxes and fees by about $1 billion in order to close a $4.4 billion shortfall. The gap shrinks to $1.7 billion when spending is capped at a 2 percent ceiling.

The budget includes taxes on “windfall” profits of health insurance companies that have benefitted from the December tax law and a surcharge on drug companies that manufacture opioids.

But Republicans in the Senate have raised red flags with the increases and supported a push to end the Start-Up New York program, a tax-free business incentive initiative created by Cuomo that’s meant to spur job creation. Critics contend the program’s job creation efforts have not lived up to expectations and should be shuttered.

Still, cutting spending on education and health care — the two primary cost drivers for New York — are unpalatable for lawmakers in either party, especially in an election year.

Cuomo has largely avoided broad-based tax increases to close deficits in the past, thanks in part to capped spending and settlement funds that have helped bridge gaps in previous years.

But the tax push this year has emboldened some GOP lawmakers, including Sen. John DeFrancisco, a GOP candidate for governor who cited the proposals as a main driver in his decision to run for governor.