Gov. Andrew Cuomo on Tuesday did what no New York governor has tried in 15 years: He unveiled a budget plan that calls for an overall reduction in spending and up to 9,800 layoffs as the state tries to get out from under crippling deficits.
Cuomo's $132.9 billion budget — about $2 billion less than last year's plan — cuts education and health care spending and recommends layoffs through attrition. New York faces a $10 billion deficit, the same kind of historic shortfalls that states nationwide face when their executive budget proposals are due in the coming months.
Cuomo's budget, which includes no new or increased taxes, calls for a 7.3 percent cut in state aid to schools, or $1.5 billion from the state's more than $20 billion in annual school aid. Cuomo said that means local school budgets will get 2.9 percent less state aid.
Operating aid to the State University of New York, City University of New York and community colleges would fall 10 percent. State aid to private colleges also would be cut 10 percent.
"This budget achieves real, year-to-year savings while restructuring the way we manage our government," Cuomo said. "This is the first step toward rebuilding a new New York."
Mayor Michael Bloomberg says the budget actually reneges on more than $2 billion in Albany promises and the city is not being treated "equitably.''
Cuomo said he hopes to use attrition, estimated at more than 10,000 jobs a year, to help achieve $550 million in savings from the work force. The new governor also said he will use contract negotiations to minimize layoffs.
Meantime, the budget plan is drawing mixed reviews, with business groups praising plans to reduce spending while health, education and public employees advocates denounced cuts and layoffs.
Heather Briccetti, acting president of the Business Council, says the budget ends overspending that has led to a loss of jobs and population.
William Van Slyke, spokesman for the Healthcare Association of New York State, says Cuomo's proposed cut to Medicaid of nearly $1 billion is "unprecedented'' and will devastate some hospitals.
Kenneth Brynien, president of the Public Employees Federation, says the budget that could cut public sector jobs, would "cripple public services.''
Environmental groups are pleased that funding for environmental programs remains at current levels.
Cuomo said the overall budget, including federal funds tied to state spending, decreases 2.7 percent under his plan, a reduction in spending not seen in Albany since the mid-1990s. That's $3.7 billion less than the current 2010-11 budget. The state operations portion grew by 1 percent, a figure derived partly because billions in federal stimulus aid is no longer counted.
Besides addressing a $10 billion deficit projected for the coming fiscal year, the spending cuts would reduce huge projected deficits in future years. Cuomo said the four-year total deficit would $9.2 billion, down from a projected $64.6 billion.
The pain he warned of, however, is clear in his projected school aid and Medicaid health cuts. The cuts could force layoffs in schools, create larger class sizes and cut staff at hospitals while reducing programs and services.
The budget also would raise revenues by expanding lottery play, some fee increases, a few one-shot revenue raisers and a surcharge on horse racing in the state.
The proposed budget includes no new borrowing. It now goes to the Legislature, which traditionally has inflated budgets.
The current budget, ending March 31, totals about $135 billion.
Cuomo's budget doesn't call for extending a temporary income tax surcharge on New Yorkers making more than $200,000 a year.
"New York is at a crossroads, and we must seize this opportunity, make hard choices and set our state on a new path toward prosperity," Cuomo said. "We simply cannot afford to keep spending at our current rate ... New York state must face economic reality."
