Governor Andrew Cuomo is suggesting that the state cut its contribution to New York City public schools by nearly $600 million from the level that schools received this year.

The budget, released today, proposes reducing statewide school spending by $1.5 billion from this year’s level. Activists said that would be the largest dollar figure cut to public schools in New York’s history.

The proposal would bring the state’s contribution to city schools close to the level received in 2007. That year ushered in substantial funding increases after a court ordered New York State to reduce historic funding inequities by pouring billions of extra dollars into the New York City schools.

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Governor Andrew Cuomo's proposed budget for fiscal year 2011, denoted with the asterisk, would reduce the state's spending on New York City public schools to $7.5 billion.

Planned increases have since been frozen, cut, and now frozen again. Cuomo’s budget suggests postponing them into the future.

Mayor Bloomberg described the budget in drastic terms, comparing Cuomo’s proposed city schools allocation — $7.5 billion — to the figure state budget officials projected last year. That projection was $8.8 billion, a nearly $1.4 billion difference.

In a statement this afternoon, Bloomberg argued that a cut of that size would lead to “thousands of layoffs in our schools and across city agencies.” He pushed Cuomo and the state legislature to reduce the loss to city schools by cutting teacher pensions and loosening requirements for special education.

The New York City teachers union downplayed Cuomo’s budget. United Federation of Teachers President Michael Mulgrew said that Chancellor Cathie Black should be able to make the needed cuts without laying off teachers.

“The Governor’s planned cut to New York City schools amounts to about three percent of the school system’s budget,” Mulgrew said in a statement. “We have every confidence that Cathie Black, whose management skills the Mayor has repeatedly cited, will be able to manage a reduction like this without laying off teachers and raising class sizes.”

The contrasting statements reflect the different political priorities of the union and the mayor. While the mayor has long argued for reductions in rapidly rising teacher pension costs, the teachers union has pushed the Bloomberg administration to preserve teacher benefits by cutting central programs instead, such as the data warehouse known as ARIS.

Last year, a similar back-and-forth — with Bloomberg warning of teacher layoffs and the union downplaying — ended when a combination of a wage freeze and the federal stimulus prevented any teacher layoffs. This year, there is no stimulus funding to plug holes.

“There’s no way that you’re not going to be cutting around the state teachers, programs, psychologists, librarians — you name it,” said Geri Palast, the executive director of the Campaign for Fiscal Equity. “This is going to be the worst year yet. There’s no question.”

Bloomberg’s teacher layoff predictions have swung wildly this year. He began 2011 by predicting that the city would have to lay off 6,100 teachers and by the end of last week, had reached an estimation of 21,000 teachers. He eventually backed away from that figure, noting that it was not feasible and promising to find other ways to make cuts.

In his statement on the governor’s budget, Bloomberg did not say how the proposed cuts would affect the city’s layoff estimates, though he numbered likely school layoffs in the “thousands.” He also called — again — for an end to seniority-based teacher layoffs and asked for the state’s help with rising education costs.

The governor’s budget does indicate that Cuomo intends to lower these types of mandated cost increases, but it’s not clear how. The budget states:

“State Aid reductions are coupled with a mandate relief effort, undertaken by Executive Order, which will lower the system-wide cost of providing education services, thus mitigating the impact of decreases in aid.”

Under Cuomo’s budget, the city would also lose $305 million in unrestricted aid that the mayor had figured into his 2012 budget projections. While that funding is not specifically set aside for schools, it could have been used as needed.

Cuomo’s budget also includes competitive funding pools — designed like state versions of the Race to the Top competition — that would reward school districts for cost-savings and academic improvement. He first proposed the pools last month.