Governor Spitzer’s first Executive Budget called for targeted spending restraint in one major program area — Medicaid — along with significantly higher expenditures in many other areas, especially education. It also featured an expansion of state-subsidized school property tax breaks.

The budget bills enacted by the Legislature would raise state-funded spending by 8.6 percent, a net increase of about $800 million over the governor’s original proposal for a 7.8 percent increase. Legislators rejected some of Spitzer’s proposed reductions in Medicaid reimbursement rates for hospitals and nursing homes, added $400 million (on a fiscal year basis) to the governor’s already huge $1.4 billion school aid increase, and reconfigured his proposed expansion of the STAR (School Tax Relief) program into an increase in the annual property tax rebate check created by the Legislature in 2006.