By Jill Colvin
MANHATTAN — Gov. Andrew Cuomo outlined his plan for a complete "financial reinvention" of the State of New York in a forceful State of the State address Wednesday that set an ambitious agenda for the coming year.
Less than a week in office, Cuomo outlined an "emergency financial reinvention plan" that calls for a freeze on state spending and state workers' wages, a long-promised property tax cap and cutbacks across the board.
The cuts include dramatic overhauls of education and Medicaid spending that could have serious implications for New York City, which relies heavily on the state for its aide.
The state is currently facing a projected budget deficit of $9 billion to $10 billion for 2012.
"I believe this state is at a crossroads," Cuomo told the audience at the Empire State Plaza Convention Center. "What we do today will determine the course of this state for decades to come."
He said Albany needed to reinvent government, "because the old way wasn’t working, let’s be honest."
Still, he was optimistic that the challenges could be met.
"Change is possible in Albany. Believe it or not. And I say, Amen! Because we need change in Albany."
Cuomo began with a round-up of the state's grave fiscal problems, including high unemployment, "exploding" pension costs and expenses that far outpace revenue.
In a series of executive orders issued immediately after the speech, Cuomo created a Medicaid Redesign Team charged with finding ways to cut Medicaid spending, which he said is in need of "a desperate overhaul." Other teams have been charged with cutting unnecessary mandates on local governments and cutting government agencies and authorities by 20 percent.
All are set to begin work no later than Jan. 7
Cuomo supplemented his 50-min, wide-ranging speech, which swung from critical assessments of the state’s dire budget crisis to optimism about the future, with dozens of PowerPoint slides, including one to illustrate his call for a new approach to budget negotiations.
"Right now the budget process is like ships passing in the night," he said, as pictures of white battleships popped up along with cut-out heads of "Commanders" Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos, and with Cuomo wearing a Captain’s hat.
"And here are the special interest groups," the governor said, smiling, as animated missiles flew in and struck his ship.
"Maybe, maybe we try doing it a different way this year," he said.
Cuomo also announced several expected initiatives, including the merger of the Insurance Department, Banking Department and the Consumer Protection Boards under a new Department of Financial Regulation.
He also vowed to pass a property tax cap "once and for all" later this year.
"New York has no future as the tax capital of the nation," he said.
Many of Cuomo's ideas involve rewarding agencies financially for budget cuts and mergers.
He proposed a new program for distributing education funds modeled on President Barack Obama's state competitions that will grant awards based on school performance and administrative efficiencies.
"Competition works," he said.
He also tried to make good on his campaign promise to "Clean Up Albany," announcing plans to end pay-to-play, force politicians to disclose outside income, publicly finance campaigns and promote independent redistricting.
He also called for a complete overhaul of the juvenile justice system. Mayor Michael Bloomberg recently called on Albany to grant local governments control of the system, arguing that they could so a better job for less.
Cuomo did not say whether he agreed with the local option, but sharply criticized the facilities, saying they are "bilking the tax payers" for the sole purpose of protecting upstate jobs.
"Don’t put other people in prison to give some people jobs," he said.
For months, Bloomberg has been warning that serious cuts in state funding could be devastating for the city, which relies heavily on state aide.
Bloomberg Budget Director Mark Page has warned that cuts to the city could amount to a loss of more than $2 billion in the coming year.
"I'm worried," Bloomberg told reporters Tuesday ahead of Wednesday's speech. "Big cuts in Medicaid would be devastating to our Health and Hospitals Corporation."
He said that he hopes to save as much of the funding as he can, but understands Cuomo's conundrum.
"He's got a very big problem. The state's been spending money it doesn’t have for a very long time. The bill is come due and he's going to have to deal with that," he said.
Bloomberg was in the audience at Cuomo's speech and was also scheduled to meet with Skelos and Silver while in Albany.
Before Cuomo's speech, Silver announced his support for a property tax cap and stressed the need for Democrats and Republicans to "work hand-in-hand to resolve our immediate fiscal challenges and build the long-term fiscal stability of our state."
Skelos echoed Cuomo's call to rein in spending and shrink the government's size.
"If we trust the people and allow them to lead us into prosperity, then we will have done our jobs," he said.
Earlier this week, Cuomo signed a symbolic Executive Order removing physical barriers in and around the State Capitol and reopening new parts of the second floor to the public.
He has also ordered all his staff and other top state officials to participate in ethics training and announced that he and other top officials will take a 5 percent pay cut to set cost-cutting example at the top.