On January 4, 2006, Governor George E. Pataki gave his final State of the State Address.  His swan song included panoply of ideas, ranging from his personal vision of a limited role of government in the lives of New Yorkers to cutting income tax rates. The address was 6,649 words in length.  The words "cutting taxes" appeared four times, "cut taxes" appeared five times, and arguments to cut an array of income and property taxes to support innovation, improve productivity and quality of life appeared approximately 28 times.

     In the chorus of reasons to cut taxes was a proposal to boost the STAR (School TAx Relief) program, again. School TAx Relief, known as STAR, is a program drafted during budget negotiations in 1997 to essentially subsidize school district budget growth by providing homeowners in mostly wealthy, independent suburban school districts with property tax relief.  After deadlocking with the Governor, Assembly Majority Speaker Sheldon Silver bargained to get funding for LADDER programs.  LADDER programs, which include minor maintenance, universal pre-K, and class size reduction funds primarily helps the Big 5 urban areas and other low-wealth, high-need school districts. Funding for LADDER programs has remained frozen since 1999, while STAR has grown more than $ 3 billion.

     The Governor has proposed two new enhancements to STAR for enactment this year: increase STAR benefits for senior citizens and give homeowners from "Long Island to Grand Island" direct school property tax rebate checks.  Last year the Governor proposed to boost and expanded STAR by creating a STAR-plus program.  STAR-plus failed to survive budget negotiations.  This year the dynamics to enhance STAR could be different, because in December 2005 the State Senate released a proposal to provide homeowners with property tax rebate checks.  How would it work? In addition to the STAR savings quoted on property tax bills, homeowners would receive an actual rebate check for a portion of the quoted savings. The State Senate proposal could cost as much as $1.9 billion. 

     In his State of the State Address, the Governor proposed to " … realign our educational priorities to meet the ever-changing demands of the 21st century. "  He is quoted as saying,

"Let's set a goal today - let's not only renew our commitment to improving educational opportunities for all students in New York State, let's make New York the nation's leader in preparing our students for careers in math, science and engineering. "

     Speaking directly to legislators he stated, "let's start out by renewing our commitment to providing additional funding to high-needs schools - in New York City and across the state." For many this statement heralded hope that perhaps the court remedy required as per the decision in CFE v State of New York would receive more than the paltry nod found in the anemically funded "Sound Basic Education Aid" included in last year's budget.  Sound Basic Education aid accounted for $195,650,378 in aid to New York City; statewide (minus NYC) the total SBE aid totaled $129,216,763.  While the Governor has not yet released a budget proposal from which to determine a likely increase in state aid for education, there would be no surprise to find a statewide increase of at least $700 million this year. Last year the statewide increase to education was $830,432,305.

     The Governor also proposed to increase the number of charter schools across the state, provide middle school students with additional math and science programs during the summer at community colleges across the state, as well as provide free SUNY and CUNY tuition to those students who pursue math or science degrees and commit to teach in New York. 

     It is important to note that the governor predicts a budget surplus of $2 billion this year.  The $2 billion surplus is said to be the biggest surplus since 1999 or 2000.  Using this surplus to cut taxes during this legislative session will likely lead to intense horse-trading between tax-cut proposals and the need to finally address CFE. Most forward-looking analysts predict there will be a budget gap the following year.  Balancing the expense budget this year, while keeping an eye on next year will require a commitment to Albany's special collection of budget gimmicks.