Today’s morning memo:

There was a lot of happy talk from legislative leaders after Gov. Andrew Cuomo unveiled his 2013-14 executive budget earlier this week – a plan that was clearly designed to minimize controversy and diminish any chance of the third on-time (or perhaps even early) budget deal of the governor’s tenure.

At first blush, it was difficult to see where, exactly, the trouble spots would be. But now that the respective leaders’ staffs – not to mention the special interests – have had a chance to read the fine print in Cuomo’s proposal, some potential problems are starting to emerge.

On the Senate side, the Republicans have issues with some of those so-called “revenue extenders” (in other words, taxes) that the governor has proposed.

It’s also unclear how, exactly, the minimum wage negotiations will go, although Cuomo has signaled he’s open to compromise. Ditto for the business community.

Over in the Democrat-dominated Assembly, Speaker Sheldon Silver is starting to make some noise on several of Cuomo’s key policy initiatives, including the siting of new, non-Indian run casinos (assuming the constitutional amendment allowing them gets second passage fro the Legislature and a green light from the public).

Silver said yesterday that he wants the Legislature to play a role in deciding where new casinos are located, and the decision should not be left solely to the governor’s new State Gaming Commission.

The speaker also apparently now disagrees with Cuomo’s push to keep casinos out of New York City “for the foreseeable future,” saying he’s open to a resort-style facility in the five boroughs – although not in densely populated areas in Manhattan and Central Brooklyn and Queens.

During an interview with our sister station NY1 last night, Silver opened up yet another avenue of disagreement with Cuomo – this time over teacher evaluations and the governor’s desire to penalize districts that fail to reach a deal with their unions by withholding state aid.

Silver noted that New York City is losing millions of dollars worth of state and federal aid due to its failure to reach an evaluation deal with the UFT by the Jan. 17 deadline – including $240 million that would have come as a result of the education aid increase in last year’s state budget.

Silver, who hails from lower Manhattan, made it clear that perpetuating that penalty – as Cuomo has proposed in his latest budget plan – will likely be a tough sell with his NYC-dominated conference.

“I wasn’t party to the negotiations. At some point I thought there was a deal being made, so I don’t know what went wrong with the deal. Two parties don’t agree, you know, there’s no deal, and that’s what happened here.”

“The city is penalized $240 million. One of the things in the budget, the governor perpetuates that penalty.”

“And that’s something that I think with 60 percent of the members in the majority of the Assembly coming from the City of New York that might be a difficult thing for the Assembly to including in the budget – the ongoing penalty of that $240 million.”

“I’m just saying it would be a difficult thing to deny the children of the city. There’s still a penalty of federal funds that we don’t control. There’s significant money on the table to encourage them to make a deal. And that was the original thought of it, is to put money on the table and say: Look, this means more teachers, this money, or less layoffs, if that’s the case.”

“…The deadline is over; I don’t think he should extend the deadline. You’re talking about this year’s money? (He has) until the end of the fiscal year, and then you begin the new fiscal year.”

“I’m just suggesting, looking at the new budget, we should not perpetuate that penalty so that the City of New York continues to lose that $240 million in state aid.”

More than 90 percent of the teacher evaluation plans submitted by districts across New York expire after one year. Mayor Bloomberg called these “sham” deals, and rejected the UFT’s effort to follow suit, arguing it takes two years to remove an ineffective teacher from a NYC classroom.

But state Education Commissioner John King defended his agency’s decision to approve these one-year plans, reasoning that the legal requirement for districts to have evaluations in place isn’t going anywhere, and also pointing to Cuomo’s intention to continue linking plan approval with state aid increases.

But Silver’s comments last night call that into question.

The Assembly Democrats have long been close allies with the statewide teachers union, NYSUT, and its NYC affiliate, the UFT. If they decide to make an issue of the teacher evaluation penalty, budget negotiations could get ugly.

Watch Interview Here >> (TWC ID required) Video