Jan. 28 (Bloomberg) — New York Governor Andrew Cuomo is betting he can hold the line on spending for five years to pay for tax cuts. Investors back the plan, even as it leaves out the cost of renewing contracts with the state's biggest unions.

Cuomo's Jan. 21 proposal gives voters a piece of a projected $2.2 billion surplus in the form of lower property and corporate levies. The framework marks as "to be determined" the cost of contracts that expire in two years for about 122,000 state workers.

In the $3.7 trillion municipal-debt market, investors are signaling confidence in the 56-year-old Democrat, who faces re- election in November. Cuomo has the state poised for its best Standard & Poor's grade since 1972 if he can deliver a fourth consecutive timely budget. The extra yield buyers demand on some New York debt has shrunk this month to less than half its average of the prior five months, data compiled by Bloomberg show.