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Gov. Andrew Cuomo Unveils Budget, Proposes Major Pension & School Reforms

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Gov. Andrew Cuomo speaks - Albany, NY - Oct 17, 2011 (credit: Governor's Office)

Gov. Andrew Cuomo speaks – Albany, NY – Oct 17, 2011 (credit: Governor’s Office)

NEW YORK (CBSNewYork) – Governor Andrew Cuomo’s new budget proposes major changes in New York State, but the devil is not so much in the financial details as it is in the reforms he wants.

Cuomo’s proposal would increase state spending by 2 percent, or about $89 million. However, the overall plan, including federal funding tied to state spending, is a fraction of 1 percent lower than the current budget. It would eliminate the $2 billion deficit.

LINK: Read More About The Budget Proposal

In past years, the big fight in Albany has been about how much is allocated to specific programs, but this year, it’s going to be very different and very difficult.

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“What we’re talking about here are major shifts. Don’t underestimate what we’re trying to achieve,” Cuomo said. “If you leave the status quo — if you do nothing — you won’t have the tension.  But if we leave the status quo, then we will have failed also.”

Instead of doing a regular budget that deals with things like how much money New York City, Westchester or Long Island get. Governor Cuomo is trying to use state money in a carrot and stick approach to get major and long overdue reforms, CBS 2’s Marcia Kramer reported.

Those measures include pension reform and an evaluation plan for public school teachers.

“We need pension reform, we need it desperately,” Cuomo said.

The governor wants to reduce pension benefits in a big way for new employees hired by the state, the city and other localities.

Among the items in the plan include:

  • Increase the retirement age from 62 to 65
  • Offer employes an optional 401k plan instead of a state pension.
  • Eliminate overtime pay in calculating pensions.

The issue of overtime is by far the most controvertial part of the plan.

“The abuses of overtime are rampant, widespread and have gone on for years,” Cuomo said.

Mayor Michael Bloomberg lauded pension reform included in the plan, which the mayor said could “save the City billions in the long-term.”

The governor also wants to overhaul the education system.  He’s threatening to withhold $800 million in school aid.  New York City would lose $224 million to districts who don’t adopt plans for getting rid of bad teachers, Kramer reported.

“Somewhere along the way, we’ve become more consumed with perpetuating the bureaucracy than focusing on achievement for the student,” Cuomo said.

Since this was the governor’s budget address, there are some financial initiatives that effect our area.

The governor wants the state to pick up a share of the Medicaid payments made by the city and other localities. The state will swallow $1.2 billion over 5 years — $954 million to New York.

The budget proposal also received strong support from Mayor Michael Bloomberg.  In a statement, Bloomberg said the budget “demonstrates a bold commitment to tackle some of the toughest challenges facing our great state.”

This year’s budget will not have the huge cuts in education and health care spending that were necessary last year as part of the effort to close a $10 billion budget gap.

“Last year was such a success — not because we did the easy thing, because we did the hard thing last year.  When you look back, it seems easy.  It wasn’t easy!  Look at the bags and lines on my face, it wasn’t easy,” Cuomo said

Hofstra University’s Larry Levy says the governor has set himself a hard task.

“It’s a great strategy to cloak anything in reform. If you take a cut, it’s reform. If you add anything, it’s reform. The trick is at the end of the day, to carry it out and be seen as a reformer and not just a talker,” Levy said.

What do you make of the proposal? Sound off in our comments section.

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