July 2004

Budget Reform
Legislative Agreement

From the NYS Assembly Sheldon Silver, Speaker
Herman D. Farrell Jr. Chair, Assembly Ways and Means Committee
RoAnn Destito Susan John Pete Grannis Members, Budget Reform Conference Committee
What the experts are saying...

“The central criticism of the reform legislation is the debate over the proposed ‘contingency budget.’ Does the reform legislation significantly weaken the Executive’s role in budget negotiations? No.”

— Common Cause, the League of Women Voters, and the New York Public Interest Research Group

“While this legislation should not be viewed as the final word on reforming New York’s dysfunctional budget process, it is a clear improvement over the current process and deserves your support.”

— Letter to governor from Common Cause, the League of Women Voters, and the New York Public Interest Research Group

Governor must step up to the plate and make budget reform a reality

In a historic, bipartisan event, the Assembly and Senate agreed upon and passed a budget reform package designed to deliver sound, on-time budgets in New York. The legislation ensures that there will never again be a late budget in New York.

A contingency budget will take effect if no agreement is in place by the deadline. If there is a question about whether the contingency budget is affordable, an independent budget office will decide. This is real change that puts an end to budget debates and keeps the relative power of the Legislature and the governor the same. No matter what the governor proposes, no matter why the Legislature disagrees, there will always be a budget in place because the most recent agreement will be implemented. And it will reflect the views of those elected to make a budget.

Now, the governor must demonstrate leadership by approving these reforms. If he does, and the voters approve a constitutional amendment to implement the reforms, New York’s working families will benefit from state budgets that employ better long-term and annual planning, closer oversight of spending, and a greater voice for the public.

Helping school districts plan ahead

The budget reform agreement includes the Assembly’s proposal to require a two-year “step ahead” appropriation for education aid – providing schools with information they need to plan ahead and avoid property tax increases. It also creates an education reserve fund in the state constitution to ensure sufficient funds exist for the payment of aid in May and June of each year.

Providing greater budget transparency

The plan also puts HCRA, which provides funding for programs such as Family Health Plus and Child Health Plus, in the overall state budget. Because HCRA currently has billions of dollars in expenditures, only some of which are on budget, there’s no way for anyone inside or outside government to get a firm handle on what the state’s finances actually look like. Making it part of the budget debate will make sure it is properly funded so our families will continue to have access to quality health care.

Better planning and more public input

The budget reform package provides the governor and Legislature with more accurate revenue forecasts and gives additional time to review the details of the governor’s budget proposal so legislators can make better decisions by:

  • Changing the beginning of the fiscal year from April 1 to May 1
  • Implementing an “enhanced fast start plan,” a discussion between the governor and Legislature on revenue forecasts and projected expenses that would begin on November 15
  • Creating a joint independent budget office, another Assembly priority, to provide objective, non-partisan analyses of state revenues that can be used to make decisions in a timely manner – without the time consuming debate that often occurs
  • Requiring the governor to submit his budget by January 15 (February 1 for a newly-elected governor) and shortening the amendment period from 30 to 21 days to allow time for legislative review

Additional financial reporting would also be required in the executive budget relating to the financial plan cash flow, personnel expenditures, disbursement of lump sums, and technology purchases. In addition, all agency budget submissions would be made public prior to submission to the governor. If a budget is not adopted by May 1, the agreement would automatically impose a contingency budget that would essentially continue the previous year’s budget.

The package would require a three-year projection by the governor and Legislature of the financial impact of any changes to the executive budget to provide better long-term planning. To put more money away in “rainy day” funds, the plan would create a reserve fund equal to 5 percent of all state funds to cushion against economic downturns, revenue shortfalls and natural disasters.

Using better planning and better financial forecasts, the taxpayers of New York will see better budgets. It’s now up to the governor to endorse these hard-fought reforms as we offer them to the voters of our state to ratify.

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