ALBANY - In his first State of the State speech, Gov. Andrew M. Cuomo Wednesday is expected to outline painful changes to state government, including deep spending cuts, agency consolidations, and concessions from workers, according to experts.
Cuomo is likely to say closing this year's $9.3-billion budget deficit requires reductions in school aid and Medicaid, the two largest spending areas, along with a one-year wage freeze for state employees, fiscal observers said. He also will call for merging agencies that have similar portfolios, such as insurance, banking and consumer protection.
"He will continue with this tone of fiscal austerity that he set in his inaugural address" on Saturday, said Elizabeth Lynam, director of state studies for the nonpartisan Citizens Budget Commission. "He will talk about how everyone has to share the pain; sacrifices in every quarter."
That means freezing employees' wages and other initiatives that Cuomo has collectively labeled "an emergency financial reinvention plan." The plan was first disclosed in a policy book released in May after he launched his gubernatorial bid. Other components are a 2 percent cap on yearly increases in property taxes by school districts and other local governments, a cap on state spending, and no hikes in state taxes.
Nonetheless, Cuomo said he will strike an upbeat tone. Asked Tuesday about the contents of his State of the State speech, Cuomo said, "I don't see this as grim. If I thought it was grim, I wouldn't have run. I would have moved" out of state.
Cuomo also said his message would focus on a few topics rather than the laundry lists preferred by his predecessors. "The State of the State is often a list of programs . . . sort of a 'check the box' - here's one program for this group and one program for this group and it's a laundry list that is then presented to the legislature and enters the great abyss," Cuomo told Albany's Talk 1300 radio. "That's not what we're going to hear [Tuesday]."
He continued, "We're going to hear a specific operational prescription for moving this state forward and managing the government and correcting many of the management operational problems that we now face."
Cuomo confirmed reports he will propose merging the insurance and banking departments with the Consumer Protection Board to improve state regulation of Wall Street.
The governor will deliver the one-hour speech in the Albany Convention Center before a crowd of about 1,800 lawmakers, lobbyists, and for the first time, a large bloc of members of the public.
Sources familiar with Cuomo's thinking expect him to "throw down the gauntlet" before lawmakers with a focus on the budget and governmental ethics. He also will probably give "shout-outs" to legalizing gay marriage and other progressive issues, they said.
The sources, who requested anonymity because they weren't authorized to speak publicly, reported the new governor labored Monday and Tuesday writing the State of the State himself. He's run through portions of it with staff to gauge Wednesday's potential audience reaction. One tricky issue for Cuomo is how high to set expectations and whether to immediately demand legislative action on the deficit and ethics, the sources said.
Some lawmakers are expecting a tough message and endorse it.
State Sen. Dean Skelos (R-Rockville Centre), the presumptive majority leader, said Cuomo is likely to seek pension and health insurance concessions from the state employee unions along with the wage freeze. Contracts covering more than 95 percent of the state payroll come due on April 1.
Skelos also expects Cuomo to continue his drive for a property tax cap. "The tax cap is critical," Skelos said.
Cuomo doesn't plan to detail all of his initiatives Wednesday. "I'm not going to do the budget," he said, referring to the Feb. 1 unveiling of his 2011-12 spending plan.
However, some experts said the governor should provide specifics now to galvanize public support. E.J. McMahon of the conservative Empire Center for New York State Policy said, "If the details are limited to freezing pay, cutting his own pay and then, in coming days, we'll talk about so and so, that would be disappointing."
With Patrick Whittle