ALBANY, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman is backing Gov. Andrew Cuomo's newest state budget proposal.

Schneiderman, in a statement released Tuesday, pointed to his office's own efforts to recover money stolen from taxpayers as a means to help cut costs.

"As the Governor said today, our state is at a time of unprecedented fiscal crisis and balancing the budget requires extraordinarily tough choices," he said.

"To help close this deficit, our office will leave no stone unturned in rooting out fraud, corruption, and waste in government, so that we can recover more money stolen from the taxpayers and hold accountable individuals who betray the public trust.

"I would like to thank Governor Cuomo for supporting the Attorney General's Office in our efforts to meet these goals, including efforts to obtain federal funds to bolster the Medicaid Fraud Control Unit (MFCU) with new prosecutors, auditors and investigators."

He added, "Governor Cuomo has a lot of hard work ahead of him to get our state back on track, and I look forward to working with him and the Legislature to restore the public's faith in government and in our economic system, to give all New Yorkers a fair shake in these tough times."

On Tuesday, Cuomo, the former state attorney general, unveiled his proposed 2011-12 executive budget.

Cuomo said his budget will "transform the state budget process to conform to fiscal realities" and eliminate a $10 billion deficit without raising taxes or borrowing.

"New York is at a crossroads, and we must seize this opportunity, make hard choices and set our state on a new path toward prosperity," he said in a statement.

"We simply cannot afford to keep spending at our current rate. Just like New York's families and businesses have had to do, New York State must face economic reality. This budget achieves real, year-to-year savings while restructuring the way we manage our state government. This is the first step toward building a new New York."

Not only does the state spend too much, Cuomo said, but it gets too little in return.

"Our state is No. 1 in spending on education and No. 34 in results. We are No. 1 in spending on health care and No. 21 in results. The goal is to return fiscal responsibility to the state so that we may strengthen the economy and create jobs," he said.

The first key step in redesigning and realigning state government, he explained, is looking at the process used to create the budget.

"We are rejecting a system of automatic and unrealistic budget increases that, for years, has caused spending to skyrocket to unsustainable levels," he said.

"Second, the process is not just a budget exercise, it must be a management exercise. That means that we cannot just keep throwing money at the problem. More funds does not mean better health care, or better schools or better programs. The changes must start with a look at the programs: do they work for the patient, the student, or the New Yorker."

Under his budget proposal, sizable percentage cuts in state operations would be made, reducing general funding spending by 10 percent.

To do so, the governor said he intends to, among other things, seek a partnership with state employee labor unions to seek savings in personal service spending. However, if workforce saving cannot be accomplished jointly, he noted, as a last resort up to 9,800 layoffs would be necessary.

To further reduce the budget, Cuomo also is proposing to merge or consolidate 11 separate state entities into four agencies to "streamline and eliminate duplicative bureaucracy."

In terms of education spending, the governor's budget proposes school aid in the amount of $19.4 billion for the 2011-12 school year -- a year-to-year reduction of $1.5 billion.

However, to keep with the governor's goal of "encouraging efficiency and results," the budget also allocates $250 million to be awarded on a competitive basis to school districts that demonstrate significant improvement in student performance and another $250 million to be awarded on a competitive basis to school districts that undertake long-term structural changes that reduce costs and improve efficiency.

Cuomo's budget also is proposing reductions to the State University and City University systems.

The governor's executive budget reduces base per-student operating aid for community colleges by 10 percent and SUNY and CUNY operating aid by 10 percent, and eliminates the subsidy for SUNY's three teaching hospitals in Syracuse, New York City and Long Island, which accounts for approximately 8 percent of overall hospital revenue.

Also in his budget, Cuomo is proposing significant reform of the state's juvenile justice system and greater use of "preventive services" to generate better outcomes for children and family, as well as significant savings, he said.

In total, the actions proposed in the governor's budget reduce the state's projected four-year deficit to 86 percent -- from $64.6 billion to $9.2 billion, according to the Governor's Office.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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