ALBANY, NY January 17, 2001 — The day was supposed to be about the budget, and it started as it usually does. At 10 am, the Governors' office released three thick volumes containing his budget proposals. At 11, members of the state Senate and Assembly gathered in an Albany auditorium to listen to a 33-minute address. In it, the Governor unveiled $530 million in new tax cuts. A plan to allow disabled people who work to keep medicaid insurance. Proposals for high-tech economic development zones upstate and on Long Island. And he proposed a new way of allocating school funds: Flex-Aid: eliminating so-called dedicated funds and allowing localities to decide how to spend the money themselves.

Pataki: In recent years, we've provided record increases in state aid for our schools -- providing an additional $3.4 billion in the last four years, a 33 percent increase in aid -- three times the rate of inflation.

The Governor said his education budget was the largest in history. And he said his proposed increase -- $382 million -- was the third largest in history. But after the speech, education advocates weighed in with dismay. Manhattan Democrat Steven Sanders, chair of the Assembly education committee, says if the Governor followed the law the legislature approved last year, he would be increasing education aid much more than he proposed.

Sanders: so if we did nothing else but to say we?ve got certain commitments and certain education formulas in place, how much money will those education formulas produce in the next school year the answer is over a 1.4 billion increase of what we?re spending now, and the governor is proposing 382 that?s almost a 1.1 billion cut.

Mr. Sanders was soon to be more disappointed. the Governor gathered reporters on the second floor of the capital. The first question: Will you appeal the decision by a judge that up-ends the whole state formula for education?

Pataki: Let me say, as I did in the speech, that I believe we do need to throw out the old education formula,

FADE out Pataki.

The Govenor repeated his claim that education had seen huge increases in his 6-year tenure -- but he didn't answer the question. So it came again -- will you appeal?

Pataki: The job of running this state is vested with the governor and the legislature. That includes adopting budgets, and we intend to adopt a budget, and I would certainly call on the legislature to join me, that meets all the challenges, legal or otherwise, but more importantly the moral challenge to give our kids the best possible chance to advance their educational future. So we will challenge that decisoin.

Assembly leaders wouldn't say how much money they thought should be in the education budget, but Assembly Speaker Sheldon Silver reacted with fury to the Governor's proposal.

Silver: There is nothing in here that in any way begins to implement the recommendations by the judge. As a matter of fact the cuts to areas like minor maintenance, pre-Kindergarten, class size reduction are all going the opposite way.

For his part, Republican State Senate Majority Leader Joseph Bruno seemed to have sympathy for both sides. Help the poor districts he said, but also reward the school districts that are doing well. Wouldn't one goal cancel out the other? he was asked.

Bruno: As I said at the beginning school aid will probably be the most complicated and contentious discussion that takes place and I said that a month ago and I said it two weeks ago and I said it five minutes ago.

The issue is most complicated for Governor Pataki, who has said he will likely run for re-election next year. Voters have not been kind to Governors who have tried to react to such rulings by raising taxes or redistributing funds. Mr. Pataki?s budget contained a blueprint for a re-election campaign ? with special attention on upstate. There?s $250 million in new highway funds. A plan to put $1 billion in high-tech and bio-tech economic zones upstate and on Long Island. A $25 million increase in funds for environmental protection. A plan to increase Medicaid eligibility so the disabled can work and keep their benefits. Governor Pataki is apparantly hoping these targeted increases will divert attention from the education lawsuit. And that a court appeal will buy him some time -- at least until November, 2002. For WNYC, I'm Andrea Bernstein at the state capitol in Albany.

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