Governor Andrew Cuomo likes competition. And the freshly elected Democrat said Wednesday during his first State of the State address that competition is the key to driving innovation and reducing the cost of state government.
Cuomo called for as much as $500 million in state school aid to be directed at the districts that have shown improvement or slashed administrative costs.
He said pitting schools against each other is the best approach for a state that spends the most in the nation on education, but ranks in the bottom third for results.
"Competition works," he said. "When I was in the federal government 10 years ago, we moved from block grants to competitive grants. When you just give people cash with no results, you take the incentives out of the system."
Cuomo wants to apply his competition-driven approach to funding for regional economic development initiatives and local municipal grants.
"We've talking about consolidating local governments for a long time and we've seen some progress," he said. "I think if we added financial incentives to the governments that actually consolidate, we'd see an acceleration of the process. We'd have a bonus fund for local governments that consolidate, merge or share services with 50 percent of the money going directly to taxpayer relief."
Under Cuomo's economic development plan, 10 regional economic development commissions would be created statewide. Composed of private and public sector stakeholders, the commissions would draft competing plans with $200 million in state grants at stake.
"These will be public-private sector partnerships and the focus will be jobs, jobs, jobs in those regions," he said. "It starts with the premise there is no top-down template to create jobs. You have different regions in this state with different assets and abilities and these plans are going to have to come from the bottom up."
He's also calling for further use of performance and competitive monies when doling out cash to local governments.
Education and Medicaid comprise the lion's share of state appropriations. Medicaid annually costs the state over $54 billion and is a significant part of the projected $10 billion 2011 deficit.
In what he's calling a reshaping of New York's governmental structure, Cuomo wants to recreate the programming to fit the funding level instead of the other way around.
"We have to find alternative ways to reach that cut. It's usually through the reimbursement rate," he said. "Let's see if we can find inefficiencies in the program so we can actually provide a better service for less money."
He's calling for the creation of commissions that would seek to dissolve or consolidate unnecessary state agencies and reduce outdated mandates on local governments. The commissions are slated to begin work as early as Friday.
Though using the example of costly and ineffective youth-offender penitentiaries, Cuomo did issue a warning to the many upstate towns that depend on state prisons to remain viable.
"An incarceration program is not an employment program," he said. "If people need jobs, lets get people jobs. Don't put other people in prison to give some people jobs."
While much of the speech focused on reducing state spending and taxes while focusing on private sector development, he did call for New York to return to its prominence as a leader in progressive politics.
Cuomo threw haymakers at state lawmakers, calling for legislative ethics reform - including full disclosure of outside incomes and the legalization of gay marriage. He placed much of the blame for New York's skyrocketing costs on lawmakers' commitment to special interests.
Though calling for bipartisan solutions, Republican state Senate Majority Leader Dean Skelos and Democratic Assembly Speaker Sheldon Silver drew some battle lines.
Skelos lauded the work of Senate Republicans while in the minority.
"Our record proves that Senate Republicans know what it will take to accomplish the challenges we face today," he said. "We've already worked to reduce spending in our own conference. Senate Republicans spent $4 million under our own budget last year."
And while admitting the state has to cut costs, Silver pointed to the merits of several state programs.
"There are critically important issues that we will not allow to be overshadowed by our budgetary challenges," he said. "This year, laws that keep housing affordable for over 1 million New Yorkers are set to expire."
He lambasted Albany, saying that its dysfunction, corruption and spending are destroying the private sector.