The budget is being watched closely nationwide. Other states with fiscal years that begin after New York's April 1 start will also have to grapple with historic deficits, unsustainable spending and unaffordable work force levels without slowing already sluggish economic recoveries.
"This budget achieves real, year-to-year savings while restructuring the way we manage our government," Cuomo said Tuesday. "This is the first step toward rebuilding a new New York."
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, which was bloated by billions in temporary federal stimulus funds. The state operations portion grew by 1 percent.
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.
Cuomo's spending plan presented Tuesday addresses what the comptroller's office projected as a more than $10 billion deficit without new or higher taxes and without borrowing, a longtime Albany practice in hard fiscal times.
Cuomo's proposal 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.
Although short of some expectations of a deeper cut in the state budget that jumped a record $14 billion since 2008, the proposal remains an uncommonly conservative plan for Albany.
"The question always was, would he 'walk the walk,'" said David Catalfamo, a GOP adviser and former top aide of Republican Gov. George Pataki, the last governor to reduce overall spending in a final budget. "This budget walks the walk."
Cuomo's $132.9 billion budget cuts education and health care spending and recommends layoffs through attrition. New York faces 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.
Billy Easton, executive director of the Alliance for Quality Education group that advocates for school aid, said Cuomo's budget proposal shortchanges the neediest children, threatens teacher layoffs and will mean larger class sizes.
"Governor Cuomo's cuts to our kids' schools are the largest in history," Easton said. "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 will now take their case to the Legislature, which traditionally increases school aid over governors' initial proposals. The established practice in Albany is a governor proposing a low budget total in part by trimming areas the Legislature most wants to protect, then negotiating some restorations.
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. Last year, then-Gov. David Paterson had said he could have achieved almost half that total savings through union concessions without any layoffs.
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.
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, a measure Democrats in the Assembly are pushing hard to provide billions of dollars more in revenue to ease cuts.
"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."
Associated Press writer Michael Virtanen contributed to this report.