I think you'll all for being here today. Person we begin by thanking and acknowledging. Probably the hardest working man and most effective. Working man in state government lieutenant governor Robert W -- give a round of applause. We're joined by our great comptroller Tom very happily pleasure to be -- he was the controller. Majority leader dean skilled most big round of applause for majority this fellow. Majority leader Jeff -- And pleasure to be -- -- It's. Speaker Sheldon Silver -- welcome -- But. Democratic conference leader Henry -- Stewart doesn't. Minority leader Brian called pleasure to be with you Brian. And my colleagues who were with me today pleasure to be with you gentlemen thank you for your work. Well thank you and it's an exciting part of the year the state of the state was exciting and now. Talking about the budget will be adding some more facts and me to the discussion. I like to start with taking every step back before you do an exercise like this to remember. What it's all about that we're trying to accomplish and what we -- it to accomplishes. Provide the people of the State of New York with a government that performs efficiently and effectively. For them for the people. Forges community lowers taxes to provide relief and restore economic opportunity that's everything we're trying to do. In a very simple product paragraph -- budget process. He's in many ways this seminal moment almost than any government it's no surprise that. Washington gridlock when they -- to do the budget. Why because that's where the money is right why you robbed banks that's where the money years. That's where the buck stops or in the case of the budget more accurately that's where the book actually starts but. That's where all the rhetoric strips away and that's when it becomes very -- in the budget. Where you putting the people's money and our budget process in many ways just follow that model and has been a metaphor for New York's past problems. And it's also been a metaphor for the success. That we have had in reforming government over the past thirty years. 23. Budgets have been -- an average of fifteen days. To think about that. That was the track record for state government thirty years point related budgets and not a little late fifty years. And then you wonder why the people of the State of New York thought that the government wasn't working. New York State government was gridlock on steroids. And the budget was manipulated by special interest pressure which drove spending ever higher. Spending outpaced inflation. For fifty years and outpaced income growth. For fifty years. This spending transcended politics. During the fifty years you have a democratic governors who are Republican governors to a democratic senate you have Republican senator George packing Mario Cuomo Nelson Rockefeller. The spending remained the same. And it was a rate that was unsustainable. Think about this. If this thing was spending. At the same level of personal income growth. Where we would bring you. In 201084. Billion was the state budget 45 billion dollars. As if we had stayed within personal income growth Stanley and personal income growth means. Raising the state budget at the same right the people of the state were -- So he just spent what the people were making the same rate would be dramatically different situation. When you spend a lot of money guess what -- raise taxes to pay for we raise taxes. At the same time investments we've we're making we're not the most efficient when not the most effective who wasn't. And necessarily be accomplishing a lot of things for the people of the state to spend a lot of money. And you get a lot done I'd be one thing we are spending a lot of money and not getting great results. And the net effect as we knew we were seeing businesses and people actually leave this state but that was yesterday. And this is today and we aren't much different place we've -- spending below 2% for three years. We brought down the level of state debt at the same time. And we've gone from a ten billion dollar deficit to a two billion dollar surplus I don't know that I would've told you that was possible when we started this journey together. Let's give yourselves a round of applause for really great piece of work. In the New York government. Works for the people and that actually performs for the people New York created 380000. Jobs over the past three years. Number two in the nation in creating jobs since the recession. Just think about that number two in the nation in creating jobs since the recession. And we make government work all across the board teacher valuation economic development road and bridge construction. And emergency management system that literally has been saving lives. We walked into a situation where all the arrows were pointed in the wrong direction all the news was bad. We turned around the spending we turned around the taxes we turned around the employment we turned around the jobs number and we turned around the direction of the State of New York. Thanks for your good work. Last year we said that a government works right the budget is an easy process that only gets dramatic when things go wrong. In the past we've had a lot of drama. Last year was simple and straightforward and this year is relatively simple and straightforward. State operating budget. Will go up one point five billion dollars which is one point 7% because we hold ourselves to a 2%. Limit the all funds budget which means the state budget loss federal funds it's ever. Without this -- aided the Affordable Care Act. Goes from 135. Billion dollars 237. Goes up one point eight billion dollars from one point 3%. Change. Mean spending areas. Spending overall goes up one point 7%. We raise Medicaid about 4% and you see why it's about which is about the personal income growth formula that we have. Put in the law form Medicaid. School -- goes up about 4%. The executive agencies are basically flat. Half a percent but the executive agencies we've done a lot of work with consolidation streamlining its ever. The rest of the budget. Basically flat point 2%. And then we have 500 million dollars to invest in tax expenditures that does not take into account in the education numbers. 82 billion dollar Smart schools initiative that we spoke about. In the stated the state. But this year the budget is more than just the budget it's more than just dollars and cents since more than even the one year birthday of budget baby Leo magna. The man makes a pretty budget but he makes a -- your babies. That baby looks like his mama thankfully. This but I'm just kidding problems like. -- yeah I can see you all over the child's face. Anyway. This budget will enact a specific action agenda. More policies in more program development than in previous years. As you'll hear from my colleagues. -- About the bad news is. It there be more work to get the budget passed because this is more than just. A budget document does a lot of program work the good news is it will make the rest of the session simpler. So the budget does more work -- normally the good news is. Post budget. What actually have a better session. We started with a very simple process of what to do list. What are the toughest problems facing the state where this structural problems facing the state. And then we've been checking them off and the out of controlling spending. Cut taxes and gridlock. Redesign the state Medicaid program passed pension reform cap property taxes enact real economic development put in place teacher evaluation systems. And now tackle the proliferation and expense of local governments. We propose that property tax freeze it is relief to homeowners but it is also something else. It's an opportunity to fundamentally address the structural cause of high property taxes. The tax that is. The main burden in this day is not the income tax. It is the property tax. We collect about fifty billion dollars of property taxes by forty billion dollars in personal income tax when you hear people complain they complain about the property tax. Why the property tax so high because we had too many levels of government period. You don't need any calculated to fix this -- figure this out when you have as many levels of local government as we have. And you are supporting that many subdivisions. The cost is going to be hard so we want to freeze the property tax. Number one to provide relief to struggling homeowners but number 202 incentivized consolidation. And shared services. Homeowners will be eligible for property tax freeze they have won the local government stays within. The 2% cap. So it is an incentive for the locality to stay within the cap. But number two no the local government diplomats and approved plan to save at least 1%. A year. For three years. And a total of 3% reduction of cost. So what is really bent lays out is a five year plan. You Warren. Dubya freeze. If the local government lives within the capped year to this state will credit to a freeze. If the local government puts in a plan. To save 1%. Per year for three years. And then year three dates at 1% year to 2% are you -- 2% -- five. 3%. These would be county wide shared services. Or consolidation plans which would save in the aggregate. 1% per year. Of the total tax Levy not be operating budget the total tax Levy. For three years. So for example Erie county. 1000. Local governments and -- -- 1000. The total tax Levy. Of those 1044. Governments. In Erie county is one point six billion dollars in tax -- Again. Not operating expense. Doesn't include sales tax etc. Just the property tax -- is one point six billion dollars. The you see the column of what the governments actually are 447 lighting district a 144 drainage districts. We say to the county executive. To the local government officials. Sit down. Come up with a plan. Figure out shared services figure -- consolidations. Figure out -- you can find savings. It can't be that every one has to do everything in every government. They can't admit it can be easier. It can be more politically advantageous. But it can't be that there are not economies of scale. In that size universe. A budding jurisdictions. Find a way to save 1% of the -- Per year. For three years. 1% would be sixteen million savings over three years would be 48 million. Monroe County 624. Local governments. Interestingly the same level of tax -- one point six billion dollars. Potential savings sixteen to 47. Or night at 350 local governments 349. Million dollar tax -- this my friends is what's driving up the property taxes. And any level inflation in these numbers. It is devastating. To a homeowner. Question as to count the number one tax county in the nation Westchester County. Many of our counties are in the top fifteen of the highest tax counties in the nation but Westchester is number one. 400 torn -- local governments four point four billion dollars. In government services. Suffolk 4045. Point seven billion dollars. 57 million dollar -- your savings 171 million. The budget -- recognizes and believes that tax relief is an economic growth strategy that has been working for a state. Our tax package includes a corporate income tax. Carp from seven point one to six point five manufacturers tax credit. A corporate income tax rate for upstate manufacturers were an additional incentive for upstate New York growth he renters tax credit. He's circuit breaker property tax relief for low and middle income homeowners. And it freezes. Property taxes. As we just discussed. Our tax package is not an advocacy statement. When you make a proposal about taxes. You get a whole range of opinions. It's one of those topics that everybody's an expert and everybody has an opinion. And everybody has a perspective. So when you start talking about taxes you get. Republican theories and democratic theories and liberal using conservative theories and everyone's got a fear. And every one criticizes. The part of the package that they don't like. This is a balanced package. And it's not. A package that has been put together to provoke. It's a package that has been put together to pass. It's a package that reflects the views of the senate and the assembly. Of people who were upstate and downstate business labor homeowners and renters. We purposely put together the attacking McCall tax commission former governor George Pataki former comptroller. Carl McCall. One a Republican one Democrat we put them together last year knowing that this viewers an election year. And we wanted to come up with a very balanced package and a balance. Approach it's a package that -- wrong New Yorkers. And a package that we can make a reality. Our jobs agenda those phone -- global New York we're very excited about the start -- program which is the most aggressive relief that you can bring period. We wanna start marketing startups owns internationally. We're excited about our jobs and gender are regional startups. In the north country we have a number of economic development projects that we believe -- going to spur the economy. White space mountain. Trudeau institute partnership capital improvements at Florida. Mohawk valley where we're investing a 180 million in that no Utica. Which is very exciting as a second major -- of nanotechnology. Capital region after talking about it for years and years and years. We're investing in a Albany convention center 63 million dollars. Finger Lakes Rochester we're investing forty million dollars in the -- business far. Which has been a problem for the Rochester area and we believe we're gonna converted into an asset. Western New York the next step is a 100 million dollar genome research center. In the southern tier they've been talking about abilities SUNY school pharmacology. For many many years we want to make it a reality this year. In central New York -- Thirty million dollars for the Onondaga lake economic revitalization area which is a very ambitious and exciting project. To develop the side of the lake a lake on a -- there. We also believe that the best long term economic development strategy is the best education system. Common core is an issue about which there has been a lot of dialogue and I've heard a lot of feedback from parents. I think it's fair to say about common core that we all agree we need real standards for our students. In meaningful teacher evaluation system I support the common core agenda New York who -- 45 states to adopt common core. But the way the common -- has been managed by the board of regents is flawed. There's too much uncertainty confusion and anxiety. Parents students and teachers need the best education reforms which include common core teacher evaluations but they also need a rational it. System that is well administered. We will assemble a panel. That includes. Education experts. And members of the legislate legislature I think this is something we can work -- together. Let's get recommendations for corrective action by the end of this session let's pass a package. Of corrective actions by the end of this session. And let's -- the anxiety that the parents and teachers and students are feeling all across this state. We need testing to measure performance in the classroom. But too much testing can hurt not help. There's no reason to school district should make a five year old take standardized tests. It's not our young children learn I propose eliminating standardized testing for all students and Kate to tune. And what ask our panel to review this proposal and make recommendations. On this topic as well. The state has long believed in free check. The new York state assembly championed it for years earlier on the legislature passed that in 1997. And governor George Pataki signed it into law. I called for the expansion of pre K last year in the state of the state. And the budget. Implemented it. This year let's take it another step forward. This year we've proposed you know universal full day pre K state line period. All of the educators all the educators will tell you this is the single. Most. Advantageous reform that is state can make. That the younger you get children to school the more open and accessible. Their brain the more they can take in earlier. An incredibly. New York will become just the fourth state in the nation. To offer statewide universal. Full day pre K. First question we have to answer is what is universal. Pre date you universal four day weekend. Because pre K currently varies widely across the state. In some school districts it's a little bit more than babysit. Some school districts are very comprehensive. Learning programs. Study after study shows it's not just enough to say it will do pretty okay. You have to spend the money right and you have to spend the money with the appropriate. Program. First we'll review the current state standards and -- requirements to ensure that we are providing high quality. Pre K programs around the state second question will be how do you pay for. The state will pay port -- the state will be proud to pay for it's a priority we believe in children we believe in pre K we believe in education. Let's put our money where. There let's make -- reality. This budget includes a fully funded five year plan. To cover the additional cost a full day pre K across the state. We currently estimate the cost -- about 101 point five billion dollars over the next. Five years we will work with school districts to development implementation schedule. And the state will move as fast as the district will move as a matter of fact we're going to encourage districts to move quickly. Because getting the full day pre K in most districts across the state is going to be capacity issue. It's not that they don't want to do it it's they don't have the capacity to do. They need classrooms. They need not for profit organization back into an off site they need teachers they need facilities they have to build. So it becomes a government -- shore of developing the capacity. We want to encourage the districts to perform we want to encourage -- districts. To perform quickly -- And -- are saying to the districts will be as fast as you can move. -- -- -- We have the funding we wanted to come on line as fast as you can bring it on line. Charter schools will be eligible for pre K funding it. We'll also reexamine the pre K inspection regulations construction codes of facility requirements because we just don't wanna do pre K we want to do do it great and we will. We also want to invest in afterschool. Studies show that high quality afterschool programs make a real difference. How budget proposes a fully funded five year plan to diplomats who implement a robust. After school programs statewide. Once again will negotiate district by district each district has a different need different desire and a different capacity. To transform our classrooms the budget puts the two billion dollars more schools initiative on the ballot. -- would have to be voted on this November. It's something I support it's simply a work very hard to get past and it's something I believe the people of the State of New York will pass especially if they know the money's gonna be well spent and the money's going to be directed. To the right causes the eligible use for the phone's high speed broadband and Smart boards tablet computers. Also. Construction of new pre K classrooms. And school programs space for afterschool. As needed. So this this initiative will work. Hand in glove. With the pre K and would be afterschool programs because to the extent schools are going up to develop more capacity. They can use the two billion dollar initiative to actually fund that capacity. So the -- will work together. Very well. The budget continued to -- sent device teacher performance with twenty million dollars per teacher excellence fund. The budget also has eight million dollars for the full scholarships. For SUNY or CUNY college or university. For the top 10% of graduates. In high school. Overall get education investment is done on two year basis. The two year projected formula growth equals 7%. As you know we have our education budget is dictated by a personal income growth. Formula. This year the person that person income growth formula -- three point 1%. Next year it's three point 9%. Over two years it's roughly 7%. Our two year budget one point three billion in general support 75 million for the performance programs. That's the additional. 460. Million dollars on top of that for pre K and after school. Over the first two years. The that budget ramps up very quickly as the capacity goes on line. And that budget goes to 2.2 billion dollars over five years. So that's a significant investment and that's why I'm confident in saying. The state will move as fast as any district will move. As fast as they can develop capacity is as fast as we can find it. That adds up to one point eight billion. Which is eight point 6%. Over two years. That combined that compares to the 7%. Over two years. If we had -- to the formula. So roughly the formula for this year's report one we will be roughly at about four point three. Sort exceeding the formula that's without counting to two billion dollar school bond back. Which we suggest would be distributed the same way the education aid is ultimately distributed. So overall. -- counted at all at BA one of the largest investments in education. That this state has made great crowd that. Health care New York State has gone. From a -- from me symbol of waste and inefficiency to a model of reform and innovation. Our health care exchange has signed up 330000. New Yorkers. It is one of the best operating sites in the country let's give them a round of applause dot -- Our Medicaid redesign team which we started in the first year. He's a great success we're providing more and better health care at less cost we actually but the cost of Medicare down Medicaid down. And enrolled more people at the same time we've saved 34. Billion dollars. Seventeen -- for the state seventeen billion for the federal government. In 2012. We requested from the US Department of Health and Human Services HHS. What's called a ten billion dollar federal Medicaid waiver. Which is an approval to spend some of the money was safe to continue our reforms to improve health care. And implement our new system the way these waivers. Work. -- for the use of the term by the way the waiver works is a state saves money by making changes. The federal government gives the state back some of that money some of the savings so they can implement the new system. We requested. A ten billion dollar -- back in 2012. Because we have challenges we're converting the system. And making serious changes in the system. But we need funding to win back those changes that are allowing us to save the money. In the first place are more serious situation is in Brooklyn. Where we -- brookdale interfaith. -- medical center on long island college hospital. We have been propping up the system frankly. For about eighteen months while we've been waiting for the waiver. But we need HHS to act on the waiver now it is a critical situation we have no alternative. The numbers up beyond the scope. The state government. And this is truly a crisis. At a place called Brooklyn but we want our federal friends to understand that. Brooklyn has more people that the San Francisco Boston Washington DC combined. So. This is a serious situation affecting a lot of people you'll hear more from. Doctor Shaw about it but it's a hit a critical matter for us to attend to. This year. Because this budget does not have resources to keep these hospitals open without this Medicaid. Waiver providing up to local governments we've been very aggressive and mandate relief and literally taking costs from local governments. The Affordable Care Act of Medicaid take over where we we assume all of the increase in Medicaid. Pension reform. Early intervention reforms. Four point six billion dollars in total probably the most aggressive local mandate package. In modern political history this year what do even more with preschool special Ed reforms. And data sharing of the law enforcement. With localities. We have 100 million dollar affordable housing program. We have a very robust emergency services re creation program. Which is very important. You'll hear from Howard Glaser. We've had about. Nine federally declared. Disasters. Since I became governor. That's about one every three or four months. As a matter tracked after this will be declaring a state of emergency in downstate New York because of the snowstorm. We have to be prepared. For these storms. And if you're not prepared people will die it is that simple. So investing in this technology and his equipment is very important. We also have a number of initiatives to make New York for error we -- continue to build on the MW B program quote we've had great success. Meeting our goal of 20%. Funding for our reentry council to stop the revolving door criminal justice system. The New York works tax credit program and edit the tax unemployment for minority youth in urban settings. And 250000. Dollars for expert services on the raise the age. That's sixteen and seventeen year old who were tried as adults. In the State of New York. We're also requesting 250000. Dollars to do it disparity study. To get. Good to see if we can get the disabled veterans in our state a set aside -- government contracts. So we showed them the same loyalty that they have shown. To us. And 2.5 million dollars for the route 98 feasibility study this is a roadway that the north countries talked about for a long time. Different people have different opinions as to whether inaudible worked. Let's spend the money let's do the study and let's find out if it works because if it does he could make a tremendous difference. For the north country. Last year I proposed. A public trust act. I understand this legislature's bill does not agree with Fiat. I've concluded it in this budget. It has reforms to the board of elections to institute independent enforcement real oversight and establishes new anti bribery and corruption laws. And requires disclosure of outside clients with business before the state. With his budget I'm also proposing a public financing system because I think it's an arguable but that. The amount of money in politics has created. A number of difficult issues. There is also being a long and troubling pattern of incidents of sexual harassment. Particularly in the new York state assembly goes back a long time. And it seems like he just doesn't stop. What makes it worse is there have been complaints that people didn't know when ago and they didn't know. How to make give voice hurt. And they've been complaints that people felt. That not only -- being victimized but there was no recourse. That has to stop and it's the stop once and parole. I propose in this budget -- hope you got a confidential hotline for complaints of sexual harassment. We we hope and pray that it stops and it stops today but if it doesn't stop. The victim needs a place to go and that's what this confidential hotline. We do for. We concluded ethics reform in the budget. Because hope springs eternal. I'm an optimist you have to be to do this job dressed man. And because it is the right thing to do. Any closing let me say this government. To me there's a formula. The capacity of government. Is. Its competence. Times the level of trust government capacity times the level of trust. The confidence. Of our state government is in arguable. Lieutenant governor started with football analogy. I was watching the playoffs this weekend the Denver Broncos in the New England Patriots. And two great teams and they were talking about the great teams who have basically saying that they're playing for the record books they're playing for the history books to record has been that good. You. Passed three budgets on time. First time in thirty years. I don't wanna jinx us but I asked when was the last time for budgets. Were passed the hero. Blessed -- budgets were passed in a row 1973. Governor was Nelson Rockefeller. Speaker was Perry do area that. -- lead there are bridges. They're all gone now. 41 years many of the people in this body weren't even alive 41 years ago about how long. It has been. And it's not just that we passed three budgets in a row. This government performed. Remarkably well for the people of the State of New York. When you're home in spite your constituents what you did it is truly. Remarkable. Three years ten billion dollar deficit turned to a surplus jobs drop spending is down unemployment is down in every region of the State of New York. And a sense of pride is up. With some surprises up you go to communities that would long depressed go to buffalo. And buffalo which was depressed literally for decades and generations. And -- a sense of energy and hope and optimism. That you feel on the street. I knew this was a community of thought they had no future. As a community that's for generation after generation see people leave you go to our country. That felt abandoned. An isolated. There weren't even part of an eagle there weren't relating to -- And it is a different feel it's not just that we. Past three budgets. And it's not just when you look at the statistics which you telling the state around you've turned around the feeling you've turned around the energy you turned around the culture. And people -- believing in New York. The warrant omission. Is -- And it's the one negative they hear over and over and over because it's a drip drip drip of these negative. One more stories and it has to be addressed. Because what ethics reform system the people of this state is I don't get it's. I forget that that's wrong. And that's not me. And I don't tolerate it. And -- than a quarter system in place that makes you or what if and when these things happen again. They'll be assistant to take care of it nobody expects. That we can stop people from doing silly you know being you look stupid -- me things it's human nature. But they are saying. We wanna make sure that you have a zero tolerance policy. I bet you were offended by it. And that the victims have a place to grow. And that you won't allow it in you amidst an ethics reform. Is that new system. That's what ethics reform is to me and I do believe it affects our capacity. And we need the capacity. Because this year for Ross is going to be a banner year. It's should be a banner year. Building on success we've had a great three years we're building on that in this sport here and we are swinging for the fences in the fourth year. You look at this agenda and what we want to do it. It's his start. We're gonna do more construction in this state. Then we've done in over sixty years a new emergency management system for new generation to save lives a new resiliency program. But the vice president of United States said he's never seen before. Economic development projects. Across the strip the state. That are coming out of the ground new records in road and bridge construction. A technology revolution in the schools with this two billion dollar initiative teacher evaluations and now kicking -- It's all coming together. It's all coming together that tourism numbers -- erupt you can feel it and we're gonna bring it home this session. And I believe we're gonna have assertion that goes into the record books. And that's why that capacity. It's so so important. Because we are doing what we came here to do. You all went into public service. And you get in the car and drive a long distance to come here for one very simple reason. Because public service -- may be you have the opportunity. To make a difference in society. Maybe you can take your talents and your god given gifts. And they can have an impact beyond yourself. And maybe you can take your talents and make your community better. And make life better for your children for your friendly. And you can leave this place a better place. We are doing that. We are doing that we have done. And we can do that even more. And that's what this session is gonna prove. I'm looking forward to it I'm proud to have you -- colleagues. Let's do with the people of this state need done thank you god bless you.