ALBANY -- School aid would increase 3 percent or by $769 million under Gov. Andrew Cuomo's budget plan released Tuesday.

Overall, state aid would grow to nearly $26.4 billion for schools -- the largest state portion of the $164 billion spending plan.

School groups wanted about $1.6 billion more in state aid for the fiscal year starting April 1.

Now the state Legislature and Cuomo will negotiate a final deal before the fiscal year starts.

Cuomo defended the proposed increase, saying it comes amid a $4.4 billion budget deficit.

School aid has increased by nearly $7 billion since 2012, up 35 percent.

"We have increased education more than any area in state government. Period," Cuomo said during his address.

The bulk of the funding, $338 million, would go to so-called foundation aid -- the direct money that districts receive based on a formula tied to a district's wealth and property-tax base.

Cuomo said 70 percent of the overall increase would go to high-need districts, and his plan would require poorer districts to create their own funding formula so the extra state money goes to the schools with the most troubles.

"It’s not enough to give funding to the poor district. You have to make sure the money goes to the poorer schools in the poorer districts," Cuomo continued. "And right now, we have no idea where the money is going."

School aid is often one of the most controversial and divisive issue during the budget process.

Cuomo proposes an amount, then school advocates typically backed by the powerful teachers' unions fight for more aid.

Lawmakers too usually add to the governor's proposal in the final deal to help their hometown schools.

Indeed, Cuomo was heckled during his roughly 40-minute budget address by Assemblyman Charles Barron, D-Manhattan, who also shouted at Cuomo two years ago during the governor's State of the State address.

Barron yelled from the audience that schools are due $4.2 billion from a 2007 landmark school funding case.

"This is not working," Barron hollered.

Cuomo urged Barron to listen to the speech first.

"How about that as a suggestion?" Cuomo said. "How about you listen to it first, and then you say it’s not working. How about that?"

Barron then left the presentation, trailed by a group of Cuomo aides.

WATCH: Gov. Cuomo releases 2018 proposed state budget