Gov. Andrew Cuomo presented his 2012-2013 Executive Budget Tuesday which he says will close a $3.5 deficit with no new taxes, no borrowing and no "fiscal gimmicks."
"This is not a Cracker Jacks box. You're not going to find anything at the bottom of it," the governor said.
The $132 billion budget calls for $2 billion in savings and $1.5 billion in new "resources."
Cuomo announced plans to increase state aid in education by $805 million. Seventy-six percent of the extra aid will be focused towards districts deemed "high need." These districts will now account for 69 percent of all state education aid.
However, the aid is contingent upon an agreement between teachers unions and school districts on a teacher and principal evaluation system. If an agreement isn't reached within the next 30 days, Cuomo said, he will amend his budget to include an evaluation proposal. If the unions and school districts don't find a middle ground and meet Cuomo's requirements by Jan. 17, 2013, the districts would lose access to increases in state aid.
The Executive Budget also proposes another $200 million in competitive grants for schools that "achieve academic gains and management efficiency."
Another major facet of the governor's budget is a plan to take away the burden of Medicaid growth from county governments. Cuomo would "hold counties harmless to all growth" of Medicaid costs which have, in recent years, been in the double digits. This proposal will save counties and New York City an estimated $1.2 billion over a five year period, according to the proposal.
Starting in the 2013-2014 fiscal year, local governments will be held accountable for 2 percent of Medicaid's growth, down from 3 percent at the current levels. By 2016, local governments will not be accountable for any growth, as the state government shoulders the costs.
In addition to mandate relief relating to Medicaid, the proposed budget also tackles pension reform by creating a tier VI for new state workers. Slated to save the state $79 billion over the next 30 years, tier VI would include reforms such as raising the retirement age and excluding overtime from pension payment calculations.
Other highlights include:
Zero growth in state agency spending;
Eliminating automatic spending inflators and implementing reforms throughout the budget to ensure that spending increases for service providers reflect performance and actual cost;
Allocating $1.3 billion in state investment designed to spur a total of $25 billion from other sources to launch and accelerate major infrastructure projects and create thousands of jobs;
Creating a plan for the state to take over 100 percent of the costs of Medicaid growth that will be phased in over three years, saving local governments $1.2 billion over the next five years;
Creating a pension reform plan that will save state taxpayers and local governments outside New York City $83 billion, and will save New York City $30 billion over the next 30 years; and
Increasing school aid by $805 million, including $250 million linked to improved academic performance and management efficiency, and implementation of an enhanced teacher evaluation process.
Cuomo asked the Legislature for cooperation in implementing a spending plan for the next fiscal year, reminding lawmakers of the successful session in 2011.
He said New Yorkers, "believe in you. They believe in me. They have hope once again for themselves, their state, their families and their community."