Lieutenant Governor Donohue, Majority Leader Bruno, Speaker Silver, Leader Nesbitt, Leader Paterson, Attorney General Spitzer, respected members of the Legislature, and fellow New Yorkers.
Thank you for being here.
Let's get right down to business.
We all want to make our state as safe and secure as it can be, keep our health care system the best in the world, preserve our environment, provide our children with a quality education, and create hope and opportunity for all New Yorkers.
These and all our other goals depend on two important factors - the fiscal strength and integrity of our State, and an economic climate that encourages job creation, growth and investment.
Before we get to the specifics of this year's budget, please allow me to put a little perspective on it.
In 2002 and 2003, New York State suffered a decline in revenues for two years in a row - the first time that had happened since the Great Depression.
Due to the combined impact of the national recession, September 11th, and the Wall Street decline, New York suddenly faced a budget deficit of more than $11 billion.
Since then, we've worked hard to restore fiscal balance.
Our economy is coming back, and yet today we still face a deficit of $4.15 billion - significantly less than we have dealt with before, but still a formidable obstacle to future prosperity.
We are once again showing strong growth in state revenues. During periods of revenue growth the temptation is always there to spend more on worthwhile programs - but our responsibility is clear.
We must control spending and reduce the tax burden that limits economic growth so we can put these fiscal difficulties behind us just as we've done in the past.
The budget I submit to you today closes the current deficit primarily through recurring actions. It lowers next year's gap to $2.7 billion, the lowest level in five years, and puts us on the road to complete structural balance in 2007.
This budget takes decisive, sensible action - action to achieve the fiscal strength and integrity that will not only erase this year's spending gap, but close future deficits as well. It accomplishes this goal with four core principles:
Controlling spending and building the State's reserves;
Reforming our health care system and our biggest budget item - Medicaid;
Cutting taxes, including property taxes to spur economic growth; and
Linking state aid to performance and accountability standards.
Let's begin with state spending.
For the last ten years, we've held state spending growth below the national average.
The budget I present to you today will do even more.
It limits spending growth to just 2.6 percent in the General Fund and 2.4 percent in All Funds, holding both below the rate of inflation and consistent with our 10 year record of keeping it below the national average.
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