Five issues that Albany faces in 2012

ALBANY -- Gov. Andrew M. Cuomo says he polished off "90 percent" of his agenda during his first year in office, but as state lawmakers gather Wednesday for Cuomo's state of the state address, they have a long checklist for 2012.

And legislators, unlike the governor, must face re-election this fall -- making the outcome of the 2012 legislative session more critical for them.

The agenda items may not be as high profile as in 2011; it would be hard to top a year in which Cuomo and lawmakers rewrote the state income tax code, implemented New York's first-ever property-tax cap and legalized same-sex marriage.

Nonetheless, lawmakers and analysts predict that the 2012 session, which kicks off Wednesday with Cuomo's speech at 1:30 p.m., will focus on a number of contentious issues:

Legislative redistricting

This is likely the first and easily the most political item that Cuomo and lawmakers will tackle. Every 10 years, states must redraw election district lines to conform to the new Census. In addition, New York must eliminate two congressional districts, trimming its House delegation to 27 members.

New York is behind many other states at this point, with no draft maps yet unveiled. Officials say they expect them by mid-January.

"Redistricting reform is the one big, unresolved issue left over from 2011 and will need to be addressed early in 2012," said Dick Dadey of Citizens Union.

Good government groups have long criticized the legislature-controlled process as protecting incumbents and discouraging challengers through gerrymandered lines -- and Cuomo has threatened to veto any "partisan" maps. Lawmakers stress that the state constitution gives them the power to control redistricting. The resolution of this potential conflict could impact how well Cuomo and legislators get along for the rest of the session.

Budget/pensions

"The budget is everything," Cuomo often says. If so, he knocked off a lot of the heavy lifting with the special session in December that changed the tax code and lopped off about 40 percent of the state's estimated $3.5 billion budget shortfall -- by raising income tax rates on families who earn more than $2 million annually.

But a budget gap remains and analysts say the tax changes and tax cap did nothing to address New York's long-term, structural budget problems.

"The state's budget problems are not solved and, in fact, the financial problems are flowering at the local level," says Edmund J. McMahon, analyst at the anti-tax Empire Center. He says Cuomo failed to get a grip on Medicaid, health care and pension costs, and instead has pushed problems on to local governments.

"There's going to be more Nassau Counties over the next few years" if the state doesn't tackle these issues, he said, referring to a state authority that took over Nassau's finances because of the county's budget crisis.

Cuomo has said reducing pension costs will be a top item for him in 2012. He previously proposed creating a new, less expensive set of retirement benefits for new government hires, but he has not addressed current employees. Meanwhile, costs are rising rapidly: According to a recent report by state Comptroller Thomas DiNapoli, the state pension fund paid $8.4 billion in benefits to retirees in 2011, compared to $4.2 billion in 2001.

To reduce spending, Cuomo is likely to call for more consolidation of government agencies. Already, he has floated the idea of merging the Department of Transportation, the state Thruway and bridge authorities.

Mandate relief

The best thing state government can do for local governments, Republican lawmakers say, is enact real "mandate relief" from services the state requires but doesn't fund.

Assemb. Philip Boyle (R-Bay Shore) said it's probably the top item for many Long Island legislators. "We're getting a lot of calls from municipalities," he said. "They approve of the tax cap, but without real mandate relief, they will be operating under a lot of restraints. We need to do something to take the pressure off counties."

Republicans from Long Island and elsewhere, along with the state Association of Counties, are pushing for a state takeover of the local costs of Medicaid, or perhaps a limit on what services must be covered. Of course, one politician's unfunded mandate is another's vital government obligation, making mandate-relief agreements historically difficult to reach.

Jobs

In the year's period that ended in November, New York added 95,000 private-sector jobs, a 1.3 percent gain. That trailed the national average of 1.7 percent. Long Island saw a 0.4 percent drop.

In a December online video message, Cuomo told New Yorkers: "It's all about jobs, jobs, jobs, creating private-sector jobs."

That was just as he struck an income-tax deal with legislators that included new funds for infrastructure and inner-city youth jobs. But questions linger about the projects that would qualify and the types of training to be provided. Cuomo also wants to repeat a program he began in 2011 that would require regions to develop job strategies and compete for economic development funds.

Casino gambling

Cuomo has said he wants a "comprehensive" gaming plan for the state. He also has an agreement with Senate and Assembly leaders to vote on a constitutional amendment to allow non-Indian-run casinos in New York. The legislature must pass such an amendment twice, before it can go to voters for ratification.

The tricky part will be sorting out where casinos can locate and what forms of gaming -- issues that lawmakers say likely will have to resolved before any floor vote. One big issue: would lawmakers OK a casino near or in New York City at, say, Aqueduct Racetrack? Aqueduct and other racing venues now feature video slot machines, but are looking to become full-fledged casinos.

Said Assemb. Karim Camara (D-Brooklyn): "This is going to be the hot topic of the session."