– The first 2,700 words of Gov. Andrew M. Cuomo’s State of the State speech last week were upbeat.

The Democratic governor checked off example after example of the billions of dollars the state has spent, or will spend, on parks, bridges, drinking water systems, airports, ski mountains and on and on.

Then, he gave a slight pause.

“Now, on the finances for the state. We start with the $3 billion hole," Cuomo said.

The governor says the state will keep state spending slightly below a self-imposed 2 percent annual spending cap. Fiscal watchers on the outside of government, like the Citizens Budget Commission, say that “reclassifications of spending and cost shifts” make the true hike in state operating fund spending higher: 3.1 percent.

The coming year may be a bumpy one for the real estate industry, as political and economic winds seem to be shifting against landlords. But the Real Estate Board of New York’s annual banquet was, as usual, a star-studded affair that drew some of the biggest developers, brokers, politicians, lawyers, accountants, owners and investors in Gotham to the ballroom of the New York Hilton Midtown.

And as a newly Democratic state senate considers revamping the city rent laws, several state senators were spotted among the throngs of schmoozing real estate pros, including Housing Committee chair Brian Kavanagh, Todd Kaminsky, Kevin Parker, Timothy Kennedy, Catharine Young and James Skoufis. City Councilmembers Kalman Yeger and Donovan Richards also came through. Towards the end of the dinner, Senator Chuck Schumer gave a speech to celebrate his longtime friend and John Zuccotti Public Service Award winner Carol Kellermann, who just stepped down as president of the Citizens Budget Commission. He also joked about the government shutdown and issued pleas for the Trump administration to fund the construction of the Gateway Tunnel.

A proposed legalization of recreational marijuana highlighted New York Gov. Andrew Cuomo’s first State of the State and budget address of his third term.

Cuomo proposed that New York join other states that have legalized cannabis while laying out a $175.2 billion spending plan for the 2020 fiscal year during his annual budget address Tuesday.

David Friedfel, director of state studies for the Citizens Budget Commission, said Cuomo’s budget should factor in the potential for a recession in the near future. The Empire State is already facing a $3.1 billion budget gap in 2020 and a $16.1 billion cumulative shortfall through the 2022 fiscal year, according to Friedfel.

“A recession equivalent to the average of the last three recessions would reduce revenues dramatically and increase the gaps by almost $44 billion over the three years,” said Friedfel.

To combat risks of an economic slowdown, Friedfel urges Cuomo to increase deposits into the state’s rainy day funds, which at $1.8 billion account for less than 3% of general fund tax revenues. He said that $800 million of legal settlements New York received after the 2019 budget was adopted provide an opportunity to build up reserves for the first time since 2015.

Bob Linn, a career labor negotiator who worked for Ed Koch, consulted cities nationally and returned to government to resolve one of the biggest challenges facing the de Blasio administration, is stepping down next month.

Linn took the job as labor relations commissioner under trying circumstances: While former Mayor Michael Bloomberg left a $2 billion surplus, negotiations with unions had stalled during his third term and the entire city workforce was operating under expired contracts by the time Bill de Blasio became mayor in 2014.

Because health care costs are outpacing pension payments, Linn negotiated new terms with union leaders that saved the city an estimated $3.4 billion.

The Citizens Budget Commission has argued the city inflated its achievement by overestimating the cost increase by $1.9 billion and counting the difference as savings.

“We may criticize that it wasn’t quite as grand, the amounts aren’t as good, but he did change the paradigm about the health savings,” outgoing CBC President Carol Kellermann said.

Our beloved governor never ceases to amaze and delight and keep us light on our feet. His legislative partners, the all-Democratic dream team, would no doubt agree.

Last Thursday, the day after the new legislative session began, Gov. Andrew Cuomo announced during an interview with Alan Chartock on WAMC that his annual budget message would be this coming Tuesday, Jan. 15. That's 17 days earlier than scheduled. The budget message is when the governor sets his agenda for the fiscal year starting April 1 and attaches some semblance of the anticipated economics involved. The governor also said the budget message would be brimming with all the liberal priorities you've heard so much about over and over since the last election.

With a budget message on Feb. 1 too much is left to the control, and mischief, of others. Getting out in front is what Cuomo does, and he's doing it again. Education funding will be thorny. Yet again ethics reforms, carefully closing the LLC loophole that has brought him so much campaign funding in the past, placating his real estate buddies in the city, the bottomless maw of finally fixing the Gotham subways. A $3 billion state budget deficit predicted by the Citizens Budget Commission for New York by end of next year, $16 billion by the end of 2022. The uncertainties from Washington. A state infrastructure suffering from the perennial diversion of funding for the governor's pet projects, like the Tappan Zee bridge. A green new deal that makes no sense at all.

When Cuomo does release his budget details, the Citizen Budget Commission has some tips on understanding what just happened.

Proposed changes to how New York State and local governments award tax breaks to businesses are gaining support on Long Island and elsewhere as more homeowners become alarmed by their ever-larger tax bills.

Reigning in the activities of industrial development agencies, which grant tax incentives on behalf of counties, towns and cities, and Empire State Development, the state’s primary business-aid agency, is a priority for Democrats, who now control both houses of the State Legislature for the first time in nine years.

State lawmakers are expected to consider bills that would increase public participation in the awarding of tax incentives and provide new tools to evaluate their effectiveness at creating jobs.

Good-government groups are calling for more disclosure of incentives by IDAs, Empire State Development and others. They want ESD to create a “database of deals,” which would serve as a clearinghouse for every government incentive given to every business.

“The only way to know whether these programs are effective in creating jobs is to first collect and report the data, and then to have it evaluated independently” from the agency granting the tax breaks, said Riley Edwards, an incentives expert at the Citizens Budget Commission, an influential fiscal watchdog in Manhattan.

She said she hopes the controversy over the size of the Amazon HQ2 incentives will spur adoption of a state law establishing the deals database.

“There are more details that we’d like to see,” said Andrew Rein, president, Citizens Budget Commission, noting that the city already provides roughly $2 billion a year in subsidy to H+H.

Rein praised H+H president Mitchell Katz for his efforts to stabilize the agency’s finances, citing initiatives ranging from cost controls to collecting from insurance companies.

“Everyone wants to see H+H stabilize to the extent that the city is reducing its subsidy to a sustainable level while not eliminating it altogether,” he said.

“Health + Hospitals is in the same boat as a lot of hospital systems,” he said, noting its provision of both in-patient and emergency-room care. “Care should be shifted from emergency room to primary care.”

The de Blasio plan, even if successful, would not necessarily mean a drop-off in emergency-room visits, he said. “It’s not always happened that way.”

New York City will spend at least $100 million to ensure that undocumented immigrants and others who cannot qualify for insurance can receive medical treatment, Mayor Bill de Blasio announced on Tuesday, seeking to insert a city policy into two contentious national debates.

The mayor has styled himself, in his 2017 re-election campaign and during his second term, as a progressive leader on issues like education and health care, and as a bulwark against the policies of President Trump, particularly on immigration.

In making the announcement, first on national television, Mr. de Blasio appeared to be trying to heighten that contrast and thrust his efforts on behalf of undocumented New Yorkers into the national debate over immigration, hours before Mr. Trump was to go on television Tuesday night to make his case for a border wall.

“It appears that the mayor is ramping up outreach so that more people can avail themselves of services, regardless of ability to pay, that have been made available to them by Health and Hospitals for decades,” said Andrew Rein, the president of the nonpartisan Citizens Budget Commission. “The details are critical,” he added. “We still need to learn more.”

The last time the stock market was roiled by the volatility that it has been experiencing recently was the beginning of the 2008 recession, which left the massive state pension system bruised and turning to local property taxes to make up for losses.

Some experts fear that unless the current stock market settles, local governments, schools and their taxpayers could face another increase in employer contributions such as the 37 percent hike ordered in 2010 by the state comptroller to offset stock market losses. That translated to $400 million more from taxpayers statewide in 2012 alone to the state pension fund.

The last spike in local government and school district contributions to the pension fund generated more pressure to raise local property taxes, lay off workers and cut services such as parks in towns and programs in schools. Local officials say the state’s 2 percent cap on the increase in property taxes reduces their options unless they get voters to override the cap.

Whether that pain is likely to be repeated, however, won’t be known until March 31, the end of the state fiscal year. And experts agree the stock market could rebound and stabilize over the next three months.

“Daily, monthly, and even quarterly fluctuations can be nullified by the valuation on March 31,” said David J. Friefel, director of state studies for the independent Citizens Budget Commission. “Likewise, because contribution rates are based on the five-year average rate of return, impacts of changing contribution rates will be gradual, but felt over a long period of time.”

When the New York state Legislature reconvenes Jan. 9, health care lobbyists will be ready to push their priorities to returning legislators as well as a crop of more than 30 new faces who are poised to shift the body's politics leftward.

The health care industry will no longer have Kemp Hannon, the longtime Senate health committee chairman, who lost his seat in November, ending a decades-long stint in the chamber as an expert on health issues. Sen. Gustavo Rivera, a Bronx Democrat who has sponsored single-payer legislation, will lead the committee.

"Getting the Legislature to understand what are the core priorities will be something to be done first," Bea Grause, president of the Healthcare Association of New York State, said at a Citizens Budget Commission forum in Manhattan last month.

As Gov. Andrew Cuomo prepares his executive budget proposal, he's faced with less dire circumstances than last year, when potential federal cuts left the state on rocky footing. In its midyear update, the state projected a $3.1 billion deficit, which could be knocked down to $402 million if it adheres to its 2% spending cap in fiscal 2020, which starts April 1.

Good government groups reminded Gov. Andrew Cuomo on Thursday about pledges he made in recent years

They’re hoping that he delivers on a “database of deals” and a ban on campaign contributions from vendors doing business with the state. The groups, including Reinvent Albany and the Citizens Budget Commission, note that there haven’t been any substantial clean contracting reforms from the Capitol following multiple corruption arrests.

“The governor could do either unilaterally via executive order, but legislation is much stronger and preferable,” said the groups.

Last year, following a breakdown in relations between Senate Republicans and Cuomo, the state Senate passed the Comptroller’s Procurement Integrity Act and a Database of Deals, but the bills died in the Assembly when Assembly Speaker Carl Heastie insisted on a three-way agreement.

“We call on [Cuomo] and legislative leaders to act on clean contracting,” said the groups. “If a three-way agreement can’t be reached, Speaker Heastie and Senate Majority Leader [Andrea] Stewart-Cousins should pass legislation to reform the state’s contracting. Two years is long enough to wait, and the corruption risk remains.”

Heastie has indicated a willingness to address these issues, and Stewart-cousins supported the reforms while in the minority.