By Edward Krudy
ALBANY, New York (Reuters) - New York Governor Andrew Cuomo pressed signature issues such as cutting taxes, revitalizing worn infrastructure and boosting the upstate economy in a wide-ranging election-year speech in his annual address on Wednesday.
Cuomo, a Democrat who is up for re-election in November, delivered his hour-long speech to an enthusiastic audience in the state capital of Albany. The packed event was attended by many of New York's political elite, including New York City's new mayor, Bill de Blasio.
The governor, regarded by some analysts as a possible presidential hopeful for the Democrats, was keen to stress his credentials as a strong fiscal manager, projecting a budget surplus of $2 billion in fiscal year 2016-2017 compared with a deficit of $10 billion when he took office three years ago.
"Three years ago New York's government was a national punch line," said Cuomo. "Albany was mired in scandals and dysfunction. Special interests and their campaign contributors controlled Albany and the people paid the price."
Albany under Cuomo has passed its last three budgets on time - the first such occurrence in three decades. In the past, the state has been known to go without a budget until August, if it got one at all.
Cuomo will release his executive budget plan, which will include more detailed figures, in late January. The Assembly and the Senate have until the start of the state's financial year on April 1 to make changes and pass a final state budget in the region of $135 billion.
Cuomo is pledging to cut taxes by $2.2 billion over the next three years. That will include a two-year freeze on property taxes worth $1 billion, and a cut in corporate taxes from 7.1 percent to 6.5 percent, the lowest level since 1968.
As part of that tax package, Cuomo is also promising to scrap taxes on manufacturers operating upstate as he tries to reverse a decades-long decline in the region, a former economic powerhouse that has been hit by an outflow of people and jobs.
QUESTIONS ON BUDGET
However, some budget experts have questioned whether Cuomo's $2 billion projected budget surplus is attainable as it relies on capping state spending growth at 2 percent.
State Comptroller Thomas DiNapoli, who was also at the event, released a statement after the speech criticizing $5 billion in temporary funding that he said the state was using to support the current budget and stressed the need to tackle the parlous state of many upstate municipalities.
"Despite a stronger national and state economy, many municipalities across New York face real fiscal issues that need to be addressed," DiNapoli said.
Cuomo also pledged to introduce universal pre-kindergarten statewide. That was likely an olive branch to de Blasio who is building a grassroots campaign to persuade Albany to allow him raise to $530 million by increasing city tax on wealthy earners.
The mayor's calls to raise the tax rate for people earning over $500,000 from 3.86 percent to 4.41 percent clashes with Cuomo's tax-cutting agenda and is likely to meet opposition from Senate Republicans who have a power-sharing agreement with a group of breakaway Democrats.
Cuomo is mindful of de Blasio's strong support in New York City and opinion polls showing broad support in the state for universal pre-K. De Blasio says he wants to push his plan to tax high earners even if the state does find funding for universal pre-K.
"The previous three mayors - Mayor Bloomberg, Mayor Giuliani, Mayor Dinkins - all came to Albany asking for the opportunity to tax their own people for crucial initiatives," de Blasio said at an impromptu press conference after Cuomo's speech.
"In each and every case Albany respected the right of New York City to make its own decision. I believe that trend will continue," de Blasio said.
Cuomo also announced plans for a limited use of marijuana for medical purposes that would allow certain hospitals to treat people suffering from serious illnesses. Although tougher than laws in other states that allow marijuana for medical use, the move is a significant shift on the issue for Cuomo. New York would be the 21st state to allow medical marijuana.
(Editing by Matthew Lewis and Cynthia Osterman)