ALBANY — Shrieks echoed through the Capitol yesterday as Gov. Cuomo unleashed a $133 billion hack-and-slash spending plan that would subject schools, hospitals and the state workforce to some of the deepest cuts in recent memory and spare virtually no aspect of state government.
The governor’s hard-times budget proposal would close a projected $10 billion gap with nearly $9 billion in cuts and no new borrowing or broad-based tax hikes. Cuts included $2.9 billion each in projected spending from Medicaid and local school aid — among the largest on record.
“New York state is functionally bankrupt,” Cuomo warned in his budget presentation to lawmakers, who will face pressure by special-interest groups to resist the cuts. “In a down economy, this is a death spiral,” he said.
Cuomo ordered a 10 percent across-the-board spending cut to state agencies and threatened as many as 9,800 layoffs if public-employee unions reject a call for $450 million in annual concessions and givebacks.
The Democratic governor further raised the stakes by detailing plans to scratch from the books countless formulas and rates that automatically renew massive spending hikes each year despite annual budget cuts.
Cuomo bluntly compared the practice, which put the state on track for a 12 percent spending hike, to the accounting practices of collapsed energy giant Enron.
“It is in many ways a special-interest-protection program,” Cuomo said during his PowerPoint-assisted speech. “It is the cycle of passing these unsustainable increases that set us up to fail year after year. We need to stop next year.”
Barring such assumed increases, Cuomo’s education cuts would total $1.5 billion compared to what was spent this fiscal year, and the Medicaid would total $982 million.
Overall, the proposed $133 billion budget includes a rare $3.7 billion cut from the current spending plan.
Cuomo has suggested he would be willing to shut down state government if lawmakers fail to approve a spending plan by the April 1 start of the new fiscal year.
From colleges to libraries to prisons, few corners of state government would be left unscathed:
* The city stood to get $660 million less than last year in aid, including a $578 million reduction in school payments. However, Mayor Bloomberg — factoring in the same assumed spending hike Cuomo criticized — said the actual impact would be more like $2 billion.
* Cuomo would permanently eliminate the $155 million pot that lawmakers employ to fund pet projects, or “member items,” and transfer its contents to a competitive economic-development program controlled by the executive.
* The state prison system would shrink by some 3,500 beds, or the equivalent of half a dozen facilities, to account for a shrinking inmate population. Cuomo assigned to a special panel the sensitive task of targeting facilities for closure.
* Various closures, consolidations and mergers would save $100 million annually. Among them, Cuomo proposed combining prison and parole operations under one “Department of Corrections and Community Supervision.”
* Across-the-board cuts of 10 percent would include a $8.4 million hit to libraries and a $1.5 million cut to public broadcasters. New York City homeless shelters would lose $16 million.
* Cuomo would delay an increase to public-assistance grants and create a two-strikes-and-you’re-out standard for recipients who fail to meet work requirements.
* The spending plan would eliminate $135 million in aid to the three SUNY teachers hospitals, in Brooklyn, Stony Brook and Syracuse. It would slash aid to SUNY and CUNY by $46 million.
The Cuomo plan defers some of the toughest decisions — what prisons to close, how exactly Medicaid would be cut, what state mandates would be lifted — to a series of commissions and panels.
“A lot remains to be decided — we’re going to have to wait and see,” said Elizabeth Lynam of the Citizens Budget Commission. “The math isn’t surprising. We know that school aid and Medicaid are big components of spending and he’s proposing big cuts.”
Cuomo predicted his proposed budget would send lobbyists “running around the halls like their hair’s on fire.” A Cuomo-administration source described the reaction as “muted.”
E.J. McMahon of the business-backed Manhattan Institute said Cuomo “did what he needed to do to keep his promise,” but said the governor’s call to nix future spending hikes had done the most to shake up the budget debate.
“The truly transformative part of this is the way he reframed the budget process and will permanently reframe it in the future,” McMahon said. “This drives people in Albany crazy. He’s saying, ‘Let’s do away with the fiction.’ ”