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Cuomo faces rising deficit as he unveils new budget plan Tuesday

ALBANY — Gov. Andrew M. Cuomo presents his eighth state budget plan as governor Tuesday, a fiscal road map that must be able to address a worsening deficit, declining federal funding for state initiatives, rising unemployment in most areas of the state and an ever-hungry appetite for state dollars from education and health care sectors.

The governor, who is expected to seek a third term this fall, will also outline how he thinks the state should be respond in an end run fashion to Washington’s new tax law that hits high-tax states through new limits on the ability to deduct state and local taxes.

“We have unprecedented challenges ahead on every level,’’ Cuomo said in his State of the State message.

The whole spending and revenue-raising plan must be OK'd by the Legislature. The budget is due March 31.

In lieu of surplus cash to spread around with popular spending initiatives, the budget unveiling is likely to put a heavy emphasis on what Cuomo sees as his accomplishments in office the past seven years — along with a healthy dose of bashing the nation’s direction under President Trump and the Republican-led Congress. Cuomo has been angling to position himself as a possible 2020 Democratic presidential contender.

The realities of the state’s current fiscal plight is expected to include — if his State of the State address served as a notice — limited additional money for the Buffalo Billion program he unveiled in his second budget in 2012. In his annual speech to lawmakers earlier this month, Cuomo went through various projects — some with relative small amounts — for projects in all areas of the state except the Buffalo area.

While he focuses on social policies that might have low or no costs attached to them, Cuomo’s budget will also press others to save money. On Tuesday, he will outline how he expects local governments to reduce the growth of spending by sharing services, from office operations to road work, with nearby localities.

Despite a growing national economy and a blistering stock market, the Cuomo 2018 budget is set to be a tale of sharp contrast with 2017. Last year, Cuomo proposed a school aid increase that made some legislators blush, pushed a free college tuition plan and put forth big new spending on environmental programs.

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Even in lean years, governors propose headline-catching spending plans, and Cuomo is unlikely to disappoint on Tuesday.

But it's uncertain, until he releases his budget plan Tuesday afternoon at a state museum near the Capitol, how much he may rely on fiscal maneuvers to balance his spending plan. Will he, as he has done before following a long line of governors before him, perform cash raids on off-budget authorities, such as the New York Power Authority, to pay for spending in a tight environment? Will he expand borrowings or turn to what he and other governors like to call “loophole closings,’’ a term used to more accurately describe tax or fee hikes directed at certain kinds of individual or corporate taxpayers.

If a current trend of keeping the state-funded portion of the budget to 2 percent or less continues, Cuomo will have to propose how to close a $1.7 billion deficit. If he wants to fulfill all the spending promises made by Albany in the past several years, then he will be facing a $4.4 billion deficit.

But, as Cuomo’s own fiscal aides have warned, the red ink numbers could actually be far higher in the coming year depending on possible federal funding cuts to New York, especially in the area of health care, and the unknown way New Yorkers — particularly those high-earners living in especially higher tax areas of the state in downstate — react to the new federal tax restrictions.

Spending requests have been flooding into Cuomo’s office. Unions and 700 school districts want him to reach high with his education aid number. But, given the known and unknown fiscal problems, it would be remarkable for him to propose what he did last January, when he touted a record education aid increase that topped out at more than 4 percent.

The Alliance for Quality Education, critical of Cuomo’s boasts about his school aid support over the years, urged the governor to increase education spending and to focus those hikes on poorer districts. The biggest education union — the New York State United Teachers — is already on record urging Cuomo to embrace the school aid hike sought by the Board of Regents: $1.6 billion. Lawmakers, though, say such an amount would force officials to gut other areas of spending that are also popular with constituents.

“The governor and Legislature are heading into an election year, making significant budget cuts especially challenging,’’ said the Citizens Budget Commission, a fiscal watchdog group.

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