ALBANY - Gov. Eliot Spitzer on Monday foreshadowed how he will use higher education and growth in high tech fields such as stem cell and nanotechnology research to try to revitalize the state's economy despite a $4.3 billion deficit.

The Democrat hinted the items could be part of his second State of the State speech on Wednesday.

“The entire thrust of what the State of State is going to be about is, ‘How do we bring back and revitalize the economy of New York state?”' Spitzer said Monday. “What are the investments? What is the new strategic thinking we need to embrace? ... It means good education, it means keeping costs low, it means energy that you can afford, it means investing in intellectual capital.”

Lacking, however, was any explanation of how to pay for the investments, when the economy and its revenues are declining and budget deficits are projected for several years.

That likely will be addressed in Spitzer's executive budget proposal to the Legislature on Jan. 22.

Spitzer spent Monday holding two press events - one about stem cell research and another about nanotechnology. Spitzer said developing these specialized fields will contribute to economic growth and stability in New York.

The state awarded $14.5 million in grants to promote stem cell research. Spitzer and Lt. Gov. David Paterson announced the funding Monday, about eight months after a stem cell research initiative was incorporated into this fiscal year's budget.

The 25 institutions receiving the one-year development grants are just the beginning - Spitzer says the state's efforts will contribute $600 million in stem cell research in the next 11 years.

Many scientist hope stem cell research will yield therapies that could prevent, treat, or cure a number of health conditions. With some Americans traveling overseas seeking early stem cell treatments, breakthroughs could be an economic boon in the future.

The stem cell funding is just one part of the governor's economic development plan and will add jobs upstate and downstate, Paterson said. Biomedical research already contributes $48 billion and 560,000 jobs in New York state.

The money was distributed to programs from all over the state, from New York City to Rochester and Buffalo.

Spitzer also made his first public comments on a lengthy report by his expert panel on higher education.

The report by the state Commission on Higher Education provided to Spitzer last month calls for 2,000 more full-time faculty at the State University of New York and City University of New York; a $3 billion research fund; the recruitment of 250 top scholars over five years; programs to make college more affordable; and “educational partnership zones” in low-income neighborhoods where colleges would help high schools prepare students for higher education.

Under its many proposals, SUNY and CUNY schools would be able to set their own tuition levels based on the demand for entrance and their needs. The commission also supports regular, predictable increases in tuition that supporters say help families and colleges plan better.

The commission also calls for cooperative ventures between public and private colleges.

“It seems to me to be a blueprint for where we go in terms of economic revitalization,” Spitzer said Monday.

Other hints released Monday about what could be in Wednesday's State of the State address include a possible cap on local property taxes, so that billions of dollars in relief sent to school districts isn't lost in increased local spending. This was former Gov. George Pataki's original proposal when the STAR program to use state dollars to ease local school taxes was devised. The cap was dropped in negotiations with the Legislature and local school taxes have continued to rise despite the subsidy.

Spitzer spokesman Errol Cockfield, however, refused to confirm or comment on the idea, which was first reported in The New York Sun.