ALBANY, N.Y., DEC. 31 -- Gov. Mario M. Cuomo (D) was sworn in today for a third, four-year term facing fiscal problems so serious that even he admits they have a bearing on whether he can run for president.

In a show of fiscal conservatism, Cuomo scrapped plans for a fancy inauguration in favor of a small swearing-in ceremony. He hopes the $70,000 saving on inauguration festivities is symbolic of his commitment to meet what he called the greatest challenge faced by a New York governor since the Depression.

"That's what I have to get done. That's what I ran for," Cuomo said of the fiscal problems during his reelection campaign. "There's no way you could say, 'No, that's not really important. I'll solve the problem from Washington,' and then take off and campaign from coast to coast. I couldn't do that and I wouldn't do that."

Cuomo's chief Republican adversary in Albany agrees that the person often mentioned as the front-runner for the Democratic presidential nomination must take care of business at home first.

"Clearly what happens in the next year is going to be very conclusive as to his chances as a candidate for national office," said state Senate Majority Leader Ralph Marino.

For three straight years, the state has run a deficit. New York's credit rating in March dropped from AA- to A, its lowest ever. Only Massachusetts and Louisiana are considered worse investments among states.

During the last two years, Cuomo and the legislature have raised taxes by $2.8 billion -- adding to Cuomo's reputation as a big-spending Northeastern liberal.

"This will be much bigger than '83," Cuomo said, comparing the problem he'll face in the coming year to the potential $1.8 billion deficit he faced when he first took office.