Now NY's Legislature gets Cuomo's budget

With a little cheerleading, a little cajoling and a little threatening, Gov. Andrew Cuomo has turned his 2012-13 budget into a rallying cry for reform of the status quo in Albany, demonizing some of its most powerful public labor unions.

The Democrat again cast himself as the outsider in Tuesday's presentation of his mostly flat $132.5 billion budget. He called for reform of the status quo of the Capitol he's been part of for 30 years since his father, former Gov. Mario Cuomo, held the office and after spending his own first year pulling the strings of state government more than any governor in decades.

"We created a sense of optimism and hope," Cuomo told lawmakers as he called the first-year accomplishments of himself and the Legislature staggeringly successful. New Yorkers "believe in government. ... They have hope once again for themselves, their state, their families and their communities and that is a great, great gift."

Cuomo seized the moment Tuesday in the state theater, well chilled as usual for when he speaks to a big crowd to keep spectators from acting logy from body heat. The budget address was one of only two certain joint meetings all year with intense statewide media attention.

Along the way, he made it clear to lawmakers from both parties that this legislative election year voters will either see them as partners in another year of "all-star" accomplishments, or as obstacles.

"This is a pro-economic growth strategy based on fiscal discipline, real reform and the exciting area of entrepreneurial government to lead us to a new New York," Cuomo said. "This is posing dramatic change in the system ... what we're talking about here are major shifts. Don't underestimate what we are trying to achieve ... we're changing it from the special interest focus to focus on the people."

One of Cuomo's biggest targets was the state's teachers unions, which he accused of blocking a tougher evaluation system for teachers that is threatening nearly $700 million in federal Race to the Top funds that require the action. The other big targets were the other major public employee unions that Cuomo wants to be forced to accept a new pension plan that would cut state and local government pension costs in half.

"I'm not sure we're going to adopt every last thing that he presented today, but if we can make progress on some of the big ones, I think the education piece is critical," said Senate Deputy Majority Leader Thomas Libous, a Broome County Republican. "We can't afford to lose money."

"If you lose funding, you lose jobs," said Assembly Speaker Sheldon Silver, a Manhattan Democrat. "So I think you'll see a lot of agreements across the state, and I think that's fine."

Silver also said he'd be open to discussing Cuomo's pension proposal, a long simmering proposal pushed by Senate Republicans and local governments with lighter ties to powerful public unions than Assembly Democrats.

"I think you've got to look at it," Silver said, "because that option saves a significant amount of money."

Cuomo's overall budget proposal would increase state spending by 2 percent, much of it involving 4-percent school aid and Medicaid spending hikes agreed to last year with legislative leaders. But the overall plan, including federal funding, is a fraction of 1 percent lower than the current budget, and eliminates a $2 billion deficit. Cuomo's plan calls for using $1.9 billion in revenue from a "millionaire tax" approved in December and making just over $1 billion in cuts while embarking on a three-year takeover of Medicaid costs from local governments, now cracking under the $8 billion a year strain.

Cuomo's proposal would also merge some state agencies and withhold increases in state aid to school districts that fail to enact tougher evaluations for teachers and principals. Failure to do so threatens $700 million in federal Race to the Top grants.

Union leaders — primarily those representing teachers and public employees — signaled Cuomo would get fierce opposition.

Richard Iannuzzi, president of the New York State United Teachers union, said Cuomo's 4-percent increase for school aid is still $500 million short, and he'll pursue those funds in the Legislature.

Cuomo also wants a less costly pension tier for new hires, including a voluntary retirement using a type of 401(k) plan that would save state and local governments billions of dollars over 30 years.

"The proposal for a new public employee pension tier is an assault on the middle class and a cheap shot at public employees," said Danny Donohue, president of the Civil Service Employees Association union with 265,000 members. "It will provide no short-term savings and will mean people will have to work longer, pay more and gain less benefit."

But Cuomo was engaging in a fight some budget analysts have long sought in Albany.

"This budget, if enacted, will mark a second year of serious reform for New York state," said Elizabeth Lynam of the independent Citizens Budget Commission.

Like many who watched Albany through years of partisanship that threatened officials' once certain re-election bids, she was skeptical of the policies adopted last year that replaced the usual months-long battles over funding, rather than managing the funds.

"Now, they really seemed to have been able to focus on some of these key issues," Lynam said.