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Eyeing Budget, Cuomo Offers Few Education Ideas

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Against the backdrop of a worsening political and fiscal climate in New York, Gov. Mario M. Cuomo last week delivered a State of the State Address that focused on stimulating the economy and making government more accountable, while offering few new or concrete education proposals.

The Governor's most pointed reference to education during his speech came when he touched briefly on the need to consolidate school districts and ease education mandates.

"Since we do not wish to raise taxes, we are forced to change things by giving up wants and finding ways to pay less for what we really need," Mr. Cuomo said. "We call this reform, and when it deals with expenditures that recur from year to year, we call it structural reform. That's what school consolidation--reducing the costs of giving an excellent education- -would be."

Key elements of the speech included a call for an $800-million bond act to provide jobs, and for the convening of a constitutional convention to consider structural changes in the government and budget-making process to avoid the paralysis that has stricken the state the past two years.

Mr. Cuomo devoted somewhat more attention to education in a companion written document. But members of the education community said that, while they did not object to his proposals, even the expanded version of his agenda fell short by failing to provide much that was different from past years.

"What he basically did is recycle some old ideas," said Louis Grumet, the executive director of the New York State School Boards Association. "There is no imagination or new ways to do things in the State of the State."

"It was a rehash of various sound bites and catch phrases," charged Peter Boespflug, a spokesman for New York State United Teachers.

"We feel he's not delivered a blue-print to get out of this mess," Mr. Boespflug said.

Credit Rating Slides

Mr. Cuomo addressed a fractious legislature only days after a national debt-rating firm lowered one of the bend ratings for the state, which is already saddled with a budget deficit for the current fiscal year as well as projections of one for next year.

Moody's Investors Service dropped the state's credit rating on legislative-appropriations bonds to Baa1, making New York second-lowest in ranking only to Massachusetts, and tied with Louisiana, as a sound investment.

General-obligation bonds, which require the consent of voters to float, were not downgraded. Nor had the other major debt-rating firm, Standard & Poor's, taken a similar action as of late last week.

The downgrading means that the state probably will have to pay more to borrow money. How that will affect schools is uncertain.

"It's not going to directly impact schools' borrowing," said James J. O'Connell, the executive director of the New York State Council of School Superintendents. The downgrading, however, could produce a "domino effect" he said, because a district's credit rating is based substantially on its revenue sources, a large portion of which comes from state appropriations.

Mr. Cuomo and the legislature began the new year pretty much as they left the old at loggerheads both over how to cut $875 million before the fiscal year expires March 31, and over closing an estimated $4-billion budget gap for the new fiscal year.

Rattled Nerves

Mr. Cuomo had pushed hard last month for a multi-year budget accord, which he said was a prerequisite before he could make his much-anticipated entry into the race for the 1992 Democratic Presidential nomination. Unable to come to terms with the Republican-controlled Senate, however, Mr. Cuomo bowed out of a campaign he had never formally entered.

If the mood of Mr. Cuomo and those assembled for his speech was an indication of things to come, the legislative session should prove to be raucous.

Observers said the reaction to Mr. Cuomo's remarks ranged from lukewarm to openly hostile, while the Governor himself displayed occasional flashes of frustration.

When Mr. Cuomo proposed that legislators and the chief executive be docked a day's pay for each day beyond the deadline that they failed to pass a budget, for example, a Democrat from Queens broke with protocol and protested aloud.

Observers also noted that Mr. Cuomo snubbed Ralph J. Manno, the Senate majority leader and his chief adversary, by recognizing another Republican senator instead.

"The budget crisis has rattled everyone's nerves," Mr. Grumet said.

Republicans Target Medicaid

In addition to their personal and partisan divisions, Mr. Cuomo and the Senate majority are deeply split over their proposed solution to the deficits. While the Governor proposes cutting state aid to schools, the G.O.P. has aimed its sights at cuts to Medicaid and other programs for the poor. (See Education Week, Dec. 4, 1991 .)

In a televised response to the Governor's address, Senator Marino maintained that New York's reluctance to reform welfare programs threatened all other services. He proposed spending cuts in all programs save education, noting that school aid had been cut more than $700 million last year.

Mr. Cuomo is expected to provide more details when he releases his budget proposal next week, including a plan to offer financial incentives for school districts to study consolidation and more still if they implement it.

But his address showed no evidence of more money elsewhere for schools, although he did allude to some redistribution of resources to needier districts.

Few members of the education community, though, were expecting the Governor to discuss additional funding at this time.

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