(CNN) -- New York's legislature approved a budget early Thursday that significantly reduces state spending without raising taxes.
New York Gov. Andrew Cuomo claimed victory with its passage.
The budget includes "historic reforms that redesign state government, create efficiencies through consolidation, cap spending increases for education and Medicaid, and transform the future budgeting process," Cuomo said in a statement.
The $132.5 billion budget for 2011-2012 eliminates a $10 billion deficit and reduces spending by more than 2 percent from last year's budget.
"This budget is a responsible budget that meets our goals of cutting spending, reducing taxes, and empowering the private sector to create jobs," said Senate Majority Leader Dean Skelos, a Republican.
More tempered praise came from Sheldon Silver, the speaker of the Democratic-controlled Assembly, who called the new budget "sobering."
"Difficult and painful decisions had to be made to address the fiscal reality facing our state," Silver said. "The Assembly Majority, working with the Governor, was able to achieve some critical restorations that will soften the cuts affecting working families, students, senior citizens and or most vulnerable populations."
The budget's key brokers touted its timely passage as much as its fiscal provisions. On-time budgets in New York have been rare in recent history.
"By passing this budget on-time, we have shown that Albany can be functional and accountable once again," Skelos said.
Earlier in the week, New York City Mayor Michael Bloomberg blasted the proposed budget as an "outrage," declaring its cuts to city services unduly deep. He did not immediately comment on the budget's passage Thursday.