State economies are generally doing well, helping to increase tax revenue, pay for new or expanded programs and provide a positive environment for incumbents.

The school district's next step will be to solicit public input on what new or expanded programs communities would like to see in their schools.

Projected deficits in the next few years rise to $2 billion a year, not counting new or expanded programs.

The package would spend $27.7 million on new or expanded programs, ranging from day care to rent subsidies.

For 1989, Mr. Koch proposes to spend $123 million on new and expanded programs, bringing the board's total budget to $6.3 billion.

In all, the package includes new or expanded programs that would, when phased in over three years, cost more than $600 million a year.

Even with these 285 new or expanded programs, he says he is committed to cutting government.

Those savings plus the expected increase in aid are supposed to pay for new and expanded programs.

Mr. Koch warned the legislators that they could add only about $50 million in new or expanded programs.

The new budget for next year has plans for half of the surplus in new or expanded programs.