The nation is watching as New York forges a plan for its fiscal year that begins April 1, well ahead of most states whose budget years begin in July. Like New York, most states will have to deal with work force cuts - Cuomo proposes as many as 9,800 - without further slowing a sluggish economic recovery.
Supporters of Cuomo's $132.9 billion budget plan Tuesday noted it's the first executive budget in the state in 15 years to cut spending, address a deficit, and nearly eliminate massive deficits projected in coming years. Cuomo said the years of routine, multibillion-dollar deficits and unsustainable spending are over.
"New York state is functionally bankrupt," he said in his budget presentation to lawmakers, urging them to resist pressure from lobbyists and special interests. "In a down economy, this is a death spiral."
Legislative leaders who will negotiate a final budget with Cuomo were supportive, but noncommittal.
Assembly Speaker Sheldon Silver, a Manhattan Democrat, said his conference needs to examine the governor's proposal. Silver said he's concerned school aid cuts would hurt the poorest students.
"Clearly, we have a lot of things we have to look at," Silver said.
Senate Majority Leader Dean Skelos, a Nassau County Republican, said he could support the school aid cut because the state must curb spending and "that's where the money is ... and we're not going to raise taxes." School aid is a major issue in his Long Island district.
Cuomo proposes a 2.7 percent cut to the overall budget, including federal funds tied to state spending. That would be $3.7 billion less than the 2010-11 budget. Most of the reduction would reflect the automatic loss of more than $5 billion in federal stimulus funds that run out this year, while the governor actually proposes a 1 percent increase in state funds.
Albany has not seen such an overall reduction in spending since the mid-1990s.
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 state would see a four-year total deficit of $9.2 billion, down from a projected $64.6 billion.
Cuomo's spending plan presented Tuesday addresses the projected deficit for the coming fiscal year without new or higher taxes and without borrowing, a longtime Albany practice when times get tough.
The proposal would make another reduction in the $50 billion Medicaid program that was cut deeply in the last two fiscal years. It also would cut $918.4 million in state aid to New York City, more than half of it school aid, and provide no municipal aid to the city for the second straight year. In addition, the proposal would raise revenue by expanding lottery play and putting a surcharge on horse racing in the state.
Although short of some expectations of deeper cuts in a state budget that has jumped a record $14 billion since 2008, the proposal remains uncommonly conservative for Albany.
"The question always was would he walk the walk," said David Catalfamo, a GOP adviser and former top aide to Republican Gov. George Pataki. "This budget walks the walk."
The proposed layoffs of about 10,000 jobs would amount to about 5 percent of the state's 200,000 employees. Cuomo said he hopes to use attrition to minimize layoffs and help achieve $550 million in savings from the work force through contract negotiations.
"We are willing to sacrifice, but we will not be sacrificed," said Kenneth Brynien, president of the Public Employees Federation union, which represents 56,000 workers.
Cuomo's proposal 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. That means local school budgets will get 2.9 percent less state aid, Cuomo said.
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.
"Governor Cuomo's cuts to our kids' schools are the largest in history," said Billy Easton, executive director of the Alliance for Quality Education. "If they are adopted, the damage to students will be permanent because children do not get a second chance."
Advocates for public schools, higher education and public worker unions now take their case to the Legislature.
Associated Press writer Michael Virtanen contributed to this report.