Good morning!

Today is arguably the most important day of the year in state government, as Gov. Andrew Cuomo prepares to deliver his sophomore budget presentation to the Legislature and all is quiet around the halls of the Capitol.

Cuomo is expected to call for a $132 billion budget that includes a $200 million cut in order to close a roughly $2 billion deficit. He is also expected to call for a 2.5 percent cut to most state agencies and departments (a Liz scoop from late last year).

The governor is also expected push for a tougher teacher evaluation system by linking some, if not all, of the promised 4 percent increase in education aid while also overhauling the state pension system — two moves that will put him on a collision course with powerful labor unions.

We do know this morning that Cuomo spoke with teachers’ union leaders as late as Monday.

NYSUT spokesman Carl Korn confirmed yesterday evening the call between Cuomo and state United Teachers Union President Dick Ianuzzi took place.

“We share the governor’s frustration about implementation,” Korn said. “We look forward to working collaboratively with the governor and the leg to move implementation forward.”

But The Daily News this morning says the call was a last-ditch effort to reach a deal on the contentious teacher evaluation effort.

Here’s what to watch for today:

Ultimatums
Cuomo will try to tie at least some of the promised 4 percent increase in education aid — some $800 million — to implementing teacher evaluations in districts across the state. As The Post reported this morning, the governor is threatening to give teachers a month to come to terms on an evauluation system or he’ll write his own plan by inserting into the 30-day amendments. Cuomo yesterday invoked Dr. Martin Luther King in a speech to a mostly African-American audience when arguing that the “education bureaucracy” has failed students.

Medicaid
It is unlikely the governor will call for the assumption of local Medicaid spending by the state, a measure that has been long sought by county and local government leaders. The calls for relief from mandated state spending are expected to grow louder this year now that the 2 percent cap on local property tax levies is firmly in place.

Pensions
Cuomo will also call for another costly item for the state and local governments, pensions, to evolve into a defined benefit plan, similar to a 401(k) in the private sector. Cuomo tried, and failed, to get a new, less generous pension tier last June, but indicated in his State of the State address that he would try again in 2012.

“Remember the politics here: It’s hard to reform a pension system,” Cuomo said during a press scrum following his Martin Luther King Day speech on Monday. “It effects many public employees, many powerful public employee unions and politically it’s difficult to get the Legislature to do this.”

Minimum wage
The governor said yesterday at the scrum that he hasn’t taken a position on a minimum wage increase as Assembly Speaker Sheldon Silver called for earlier this month. Any increase would likely be opposed by Republicans in the state Senate and Cuomo has worked hard to build good relations with the state’s business lobby over the last year.

YNN will carry the address live at 2 p.m. and naturally we’ll be tweeting and blogging away all day.

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