Twelve hours after taking questions from reporters on the budget lawmakers in Albany agreed to last Tuesday night, Governor Pataki fielded questions on the same topic from a much better-dressed segment of his constituency. The governor’s first scheduled appearance the next day was to a group of corporate executives in Manhattan who had gathered for the annual meeting of the Partnership for New York City, a not-for-profit group aimed at growing the economy of the five boroughs.

The Partnership board had invited Mr. Pataki without expecting the budget to be finished by then, but the fact that it was turned out to be serendipitous for both groups. Based on the policies the governor had agreed to the previous day, he had reason to believe this audience would be happy to see him. The final budget contained several new items the Partnership had identified as good for business and excluded several others it had feared.

According to people who attended the event, the roughly 50 executives who gathered at Citigroup headquarters gave Mr. Pataki a hearty round of applause. The Partnership had pressed legislators for years to dump the traditional formula for taxing businesses based on in-state property, sales, and employee levels in favor of a simpler formula based on instate sales alone. The final product amounted to a far broader adoption of the so-called “single sales factor” than even Mr. Pataki had contemplated.

On health care, the Partnership won agreement from lawmakers on a commission that will study excess capacity at health care facilities as a way to reduce Medicaid costs. A partnership member and the chairman of the private equity firm Odyssey Investment Partners, Stephen Berger, led a task force that had originally recommended establishing the commission. One of the few Medicaid reform proposals that made it through the legislature, it turns out, bore the marks of Partnership thinking.

Partnership members were also pleased about an agreement that allows a temporary income tax surcharge of New Yorkers with net incomes of $150,000 or more to expire as promised at the end of this year. Lawmakers who imposed the surcharge two years ago had threatened to keep it on the books even as the governor proposed accelerating its expiration. In the end, both sides agreed to the original timeline.

Lawmakers also relented on a threat to extend a temporary statewide sales tax increase of .50% that was imposed in the spring of 2003. One-quarter of the sales tax surcharge was retained in the MTA service area, a move Partnership members supported as part of their advocacy on mass transit funding. Partnership members dodged another bullet when lawmakers relented on a proposed surcharge on income taxes paid by unincorporated businesses in the MTA service area. The surcharge, which did not make it into law, was also intended for MTA upkeep.

The president of the Partnership, Kathryn Wylde, downplayed the role the organization played in effecting business-friendly reforms this year. But business leaders at the meeting received Mr. Pataki warmly, Ms. Wylde said, thanking him for the single-sales-factor reform and for keeping his promise on the surcharges. She described Mr. Pataki as “ebullient” in his first public appearance after the final budget bills were passed. “I’d have to say he was exhilarated at having put this thing to bed in a way he’s comfortable with,” Ms. Wylde said. “I think our members were equally glad this was not a long and drawn-out battle.”

Ms. Wylde said partnership members asked Mr. Pataki a number of questions, many dealing with Medicaid. She said Mr. Pataki credited his economic policies for generating roughly $1 billion in unexpected revenue since January and, she said, for fostering an economy that is stronger than the state could have expected three and a half years after September 11, 2001. “I think it’s pretty significant,” Ms. Wylde said, “and the reason the governor came down was to celebrate with us.”

Yet Mr. Pataki might not want the applause to go to his head. Business leaders who hailed the adoption of the single sales factor have the legislature, not him, to thank. And allowing temporary surcharges to expire and mass transit funding to go forward through increased borrowing are not exactly heroic fiscal reform. Indeed, the fact that executives focused on Medicaid in questions to the governor suggests they have applied some of their financial acumen to state finances and noticed a hole opening up around it in coming years.

One thing they would have noticed is that Governor Pataki proposed to cover this year’s budget gap, largely the result of Medicaid growth, with $860 million in one-time revenue sources even before giving up half his proposed Medicaid cuts in negotiations with the legislature.

Mr. McGuire is Albany correspondent of The New York Sun.