As we settle in for another state legislative session, it is natural to examine New York's priorities for the upcoming year and what major challenges lie ahead.

While the attacks of Sept. 11 severely hurt New York's economy and present economic challenges well beyond those facing the rest of the nation, Gov. Pataki's efforts over the past seven years provide the sound fiscal platform on which New York will build its recovery.

The governor's proposed executive budget for 2002-03 is soundly balanced, as it:

* Sustains important programs while controlling spending growth;

* Uses fiscal reserves, federal funds and other revenues to permit program reforms and personnel reductions to be reasonably phased;

* Honors past commitments to tax reductions and program benefits without making unaffordable new promises that cannot be met; and,

* Recognizes current fiscal realities while investing for the future.

The governor's proposed budget includes a comprehensive economic development plan to generate billions of dollars in new private- and public-sector investments across the state. The governor's plan includes a new Empire Opportunity Fund that will support major capital investment and economic development projects that create and retain jobs or build capacity for future job growth, new funding for high-tech/biotech job creation, support for renewable-energy technology, and targeted assistance for small business.

The governor's proposal continues the billions of dollars in tax cuts that have been enacted since 1995, including more than $300 million in new tax cuts that are scheduled to take effect in 2002-03. In this coming fiscal year, New Yorkers will pay $13.4 billion less in taxes than they would have paid if the governor's tax cuts were not in place. Clearly, raising broad-based taxes now, or delaying implementation of the already-enacted tax cuts, would ignore the lessons of the last seven years and ultimately hurt New York's economy, costing us jobs.

We have made generous investments in the state's education system, with dramatic school aid increases totaling $4.4 billion or 45 percent over the past seven years. This year, the governor recommends sustained funding for our schools, while are at the highest level in the state's history - $14.2 billion. This year, the governor's education agenda calls for a sweeping overhaul of New York's school finance system. He would eliminate the existing school aid formula and institute a new one to achieve equity without pitting one school district against another.

I have to applaud the governor's commitment to ensuring the safety and security of all New Yorkers. The governor established the state Office of Public Security, which is now coordinating and bolstering the governor's anti-terrorism efforts throughout New York. The budget recommends an additional $200 million for the costs related to public security. This amount is expected to cover current estimates for public security activities through the end of the 2002-03 fiscal year, including needs identified by the new Office of Public Security.

While we face daunting challenges ahead, the 2002-03 budget proposal effectively tackles these challenges - preserving the progress of the past, recognizing the fiscal and economic reality of the present, and committing to the priorities and principles that will surely fuel a prosperous future. We face enormous fiscal challenges as a result of the tragic events of Sept. 11 and the national recession, but I have tremendous confidence that through bipartisan cooperation, we can turn crisis into comeback once again.