NEW YORK, NY January 22, 2008 —Governor Spitzer is proposing a $124 billion budget he says would close a $4.4 billion deficit, while spending more on schools, health care coverage for kids, dealing with declining growth caused by a slowing economy. The governor's plan increases spending by 5.3 percent.... the lowest increase since the mid-90s.

REPORTER: Spitzer says he'll pay for it in part by cutting state agencies' budgets by $1.3 billion.

SPITZER: We said to every agency... make yourself more efficient and do it through lowering overtime better procurement the nuts and bolts management techniques that the public wants to hold us accountable for.

REPORTER: The governor also says he'll save money by cutting tax loopholes, and by tabling the popular STAR property tax rebate program for at least a year. Senate Republicans are already criticizing the budget; Senate Majority leader Joe Bruno says Spitzer's plan has the wrong priorities. The budget is due April first.