Tonko, Hoyt, Cohen A, Cahill, Lifton, Christensen, Gottfried, Powell
MLTSPNSR
Brennan, Colton, Glick, Koon, Lafayette, Robinson
Amd Art 7 SS1 - 7, 11 - 13, 16 & Art 4 S7, rpld & add Art 7 S17; add Art 7 S20, Constn
Substantially revises provisions of the constitution relating to the state's budget and finances; provides for an independent budget office; bases the budget on expenditures and anticipated receipts.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A596
SPONSOR: Brodsky (MS) TITLE OF BILL: CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
proposing amendments to article VII and section 7 of article IV of the
constitution, in relation to modifying provisions for the state's
finances and the state's budget and to repeal section 17 of article VII
of the constitution relating to tax stabilization funds
PURPOSE OR GENERAL IDEA OF BILL: This amendment would reform the state
budget process including:
* permitting the legislature to amend the executive budget,
* changing the budget from an appropriation budget to a cash budget,
* the creation of an independent budget office,
* establishing a contingency budget,
* ending backdoor borrowing,
* giving the state the limited power to issue revenue bonds,
* reforming the revenue estimate process,
* preserving the line item veto of expenditure,
* allowing either house to reconsider the governor's veto first,
* requiring a balanced budget,
* requiring a long-term capital plan, and
* making other technical and timing changes.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends Article VII, §1 to require that:
* the comptroller and newly created independent budget office provide
preliminary revenue forecasts and make such forecasts available to the
public.
* requires the comptroller certify the actual moneys and anticipated
receipts to be available for the proceeding year.
* if the legislature cannot agree upon revenue forecasts by the 10th of
March, the revenue forecasts provided by the independent budget office
shall be binding.
* the governor hold hearing of the capital needs of the state.
* the governor submits to the legislature a detailed, multi-year capital
program and financing plan to the legislature.
Section 2 amends Article VII, §2 to:
* make certain technical changes to clarify elections of the governor in
relation to the submission of the budget.
* change the executive budget to a cash budget.
Section 3 amends Article VII, §3 to:
* change the time that the governor has to adjust the executive budget
from thirty to twenty-one days.
* include a new provision that prohibits the governor from including
language, which attempts to modify any general, special or local law.
Section 4 amends Article VII, §4 requires:
* that the budget be balanced, and
* that the legislature may strike items and the conditions contained
therein.
Section 5 amends Article VII, §5 to create:
* a contingency budget. The contingency budget would automatically take
effect on the fifteenth of April if a budget agreement is not reached.
Section 6 amends Article VII, §6 to:
* allow the governor to submit budget bills that only involve expendi-
tures, not statutory changes.
Section 7 amends Article VII, §7 to:
* make technical changes.
Section 8 amends Article VII, §11 to:
* authorize the submission of more than one work or purpose in a bond
issue and would prohibit the state from "backdoor borrowing."
Sections 9 and 10 amend Article VII, §§12 and 13 to:
* make technical changes.
Section 11 amends Article VII, §16 to:
* allow that state the authority to issue revenue bonds, as the legisla-
ture shall provide by law.
Section 12 repeals Article VII, §17 and:
* adds a new article 17 to strengthen the "rainy-day" fund and provide
additional revenue in times of need.
Section 13 amends Article VII by adding a new §20 to:
* create an independent budget office.
Section 14 amends Article IV, §7 to:
* clarify the governor's line item veto to expenditures only, and
* allow either house to reconsider the governor's objections, regardless
if the house is of original jurisdiction or not.
JUSTIFICATION: As is evidenced by the series of late budgets and grid-
lock, there is serious need for constitutional budget reform. Reform is
needed because there are structural institutional deficiencies exacer-
bated by partisanship.
History is needed to shed light on the current structural deficiencies
of the state budget process. Under the leadership of Governor Alfred E.
Smith, New Yorker's supported a fundamental change to the budget process
-- a move from a legislative driven process to a more executive centered
process. These changes dated back to the 1915 constitutional convention.
Although New York was one of the first states to propose fundamental
budget changes, it was one of the last to make such changes. These
changes were critical. The former budget process was fraught with
corruption and created economic instability. Providing a centralized
budget process would stabilize the process and make it more fair and
equitable.
While most states changed their budget process statutorily, Governor
Smith recognized the volatility of statutory change and therefore pushed
for constitutional change. However, certain of these great constitu-
tional reforms had unintended consequences that must be remedied.
First and foremost, the Constitution must rebalance the power between
the legislative and executive branches. In the 1920s the line item veto
was adopted to remedy the problem of legislative logrolling. Scholars
and fiscal experts agree that the line item veto protects the stability
of the budget process. The State Constitution is clear that the governor
has the ability to veto only appropriations. However, a series of court
cases and positions taken by the current governor have distorted this
constitutional power to equate appropriations with other non-appropria-
tion language. The Association of the City of New York agrees. The Bar's
committee on State Affairs believes that several court decisions have
upset the delicate balance of power. See: The City Bar's Committee on
State Affairs, "The New York State Budget Process and the Constitution:
Defining and Protecting the 'Delicate Balance of Power'",
THE RECORD OF
THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK, 58, 345 (2003). We
do not change or reduce the executive's power. We simply clarify the
executive's power.
There needs to be more independence in the budget process often fraught
with partisan wrangling. We have therefore created an independent budget
office. This idea works in other states like Florida and even in New
York City. The independent budget office will objectively forecast
revenue.
Another structural problem came after the constitutional changes in
1927. Public authorities have become epicenters of isolated political
power in New York. While public authorities must self-rely on generating
their own capital, but are of instances backdoor borrowing, whereby
State revenue is used to support authorities. In 1993 constitutional
changes closed this door but loopholes remain. This amendment closes the
remaining loopholes.
Besides Vermont, which has no constitutional or statutory requirement
that their budget be balanced, New York has one of the weakest balance
budget provisions in the country. It is generally understood that the
governor must propose a balanced budget (See: Article VII, §2), but the
final passed budget does not. The amendment will require New York join
the many other states in requiring that the final budget enacted be
balanced.
Finally, other changes such as the creation of a contingency budget
period and changing which house may consider vetoes will end gridlock
and ensure the needs of the People of this State are met.
PRIOR LEGISLATIVE HISTORY: A.11860--2004
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: Resolved (if the Senate concur), That the foregoing
amendment be referred to the first regular legislative session convening
after the next succeeding general election of members of the assembly,
and in conformity with section 1 of article 19 of the constitution, be
published for 3 months previous to the time of such election.
STATE OF NEW YORK
________________________________________________________________________
596
2005-2006 Regular Sessions
IN ASSEMBLY
January 18, 2005
___________
Introduced by M. of A. BRODSKY, TONKO, HOYT, A. COHEN, CAHILL, LIFTON,
CHRISTENSEN -- Multi-Sponsored by -- M. of A. COLTON, GLICK, KOON,
LAFAYETTE -- read once and referred to the Committee on Ways and Means
CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
proposing amendments to article VII and section 7 of article IV of the
constitution, in relation to modifying provisions for the state's
finances and the state's budget and to repeal section 17 of article
VII of the constitution relating to tax stabilization funds
1 Section 1. Resolved (if the Senate concur), That section 1 of article
2 7 of the constitution be amended to read as follows:
3 Section 1. By November first of each proceeding budget period, a
4 preliminary anticipated receipts forecast shall be issued by the comp-
5 troller and the independent budget office. By December first of each
6 proceeding budget year, the comptroller shall certify and transmit to
7 the governor and the legislature the actual and unencumbered moneys and
8 receipts anticipated to be available in the state treasury. For the
9 preparation of the budget, the head of each department of state govern-
10 ment, except the legislature and judiciary, shall furnish the governor
11 such estimates and information in such form and at such times as the
12 governor may require, and, at such times, shall forthwith provide copies
13 of [which shall forthwith be furnished] such estimates and information
14 to the appropriate committees of the legislature and make such estimates
15 and information available to the public. The governor shall hold hear-
16 ings thereon at which the governor may require the attendance of heads
17 of departments and their subordinates. Designated representatives of
18 such committees shall be entitled to attend the hearings thereon and to
19 make inquiry concerning any part thereof. If the anticipated receipts
20 forecasts cannot be agreed upon by the two houses of the legislature by
21 the tenth of March, the anticipated receipts forecasts provided by the
22 independent budget office shall be binding.
23 The governor shall hold hearings by the fifteenth of February, in a
24 manner prescribed by law, on the capital needs of the state, and shall
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD89016-01-5
A. 596 2
1 submit to the legislature an assessment of capital assets and needs, at
2 such times and in such manner prescribed by law. Within thirty days
3 following the submission of the budget to the legislature, the governor
4 shall submit a detailed, multi-year capital program and financing plan
5 to the legislature, as provided by law.
6 Itemized estimates of the financial needs of the legislature, certi-
7 fied by the presiding officer of each house, and of the judiciary,
8 approved by the court of appeals and certified by the chief judge of the
9 court of appeals, shall be transmitted to the governor not later than
10 the first day of December in each year for inclusion in the budget with-
11 out revision but with such recommendations as the governor may deem
12 proper. Copies of the itemized estimates of the financial needs of the
13 judiciary also shall forthwith be transmitted to the appropriate commit-
14 tees of the legislature.
15 § 2. Resolved (if the Senate concur), That section 2 of article 7 of
16 the constitution be amended to read as follows:
17 § 2. Annually, on or before the first day of February in each year
18 following the year [fixed by the constitution for the election of gover-
19 nor and lieutenant governor] in which the governor is elected, provided
20 such governor did not hold the office of governor at the time of the
21 election, and on or before [the second Tuesday following the first day
22 of the annual meeting of the legislature] January fifteenth, in all
23 other years, the governor shall submit to the legislature a budget
24 containing a complete plan of expenditures proposed to be made before
25 the close of the ensuing fiscal year and all moneys [and revenues esti-
26 mated] available and anticipated receipts certified by the comptroller
27 to be available therefor, together with an explanation of the basis of
28 such estimates and recommendations as to proposed legislation, if any,
29 which the governor may deem necessary to provide moneys and [revenues]
30 receipts sufficient to meet such proposed expenditures. It shall also
31 contain such other recommendations and information as the governor may
32 deem proper and such additional information as may be required by law.
33 § 3. Resolved (if the Senate concur), That section 3 of article 7 of
34 the constitution be amended to read as follows:
35 § 3. At the time of submitting the budget to the legislature the
36 governor shall submit a bill or bills containing all the proposed
37 [appropriations and reappropriations] expenditures included in the budg-
38 et and the proposed legislation, if any, recommended therein.
39 The governor may at any time within [thirty] twenty-one days thereaft-
40 er and, with the consent of the legislature, at any time before the
41 adjournment thereof, amend or supplement the budget and submit amend-
42 ments to any bills submitted by him or her or submit supplemental bills.
43 The governor and the heads of departments shall have the right, and it
44 shall be the duty of the heads of departments when requested by either
45 house of the legislature or an appropriate committee thereof, to appear
46 and be heard in respect to the budget during the consideration thereof,
47 and to answer inquiries relevant thereto. The procedure for such appear-
48 ances and inquiries shall be provided by law.
49 No expenditure shall provide any language which attempts to modify any
50 general, special or local law, or which attempts to create an exception
51 to any such law.
52 § 4. Resolved (if the Senate concur), That section 4 of article 7 of
53 the constitution be amended to read as follows:
54 § 4. The legislature may not alter an [appropriation] expenditure bill
55 submitted by the governor except to strike out or reduce items or all
56 such conditions contained therein, but it may add thereto items of
A. 596 3
1 [appropriation] expenditure provided that such additions are stated
2 separately and distinctly from the original items of the bill and refer
3 each to a single object or purpose. None of the restrictions of this
4 section, however, shall apply to [appropriations] expenditures for the
5 legislature or judiciary.
6 [Such an appropriation] An expenditure bill making an expenditure
7 solely for the purpose of meeting the legal requirements of the state's
8 debt service and lease purchase payments or other special contractual
9 obligations shall, when passed by both houses, be [a] law immediately
10 without further action by the governor, except that [appropriations]
11 separate items added to the governor's bills by the legislature shall be
12 subject to the governor's approval as provided in section 7 of article
13 IV and except that expenditures for the legislature and judiciary and
14 separate items added to the governor's bills by the legislature shall be
15 subject to approval of the governor as provided in section 7 of article
16 IV.
17 Action by the legislature on the expenditure bills and proposed legis-
18 lation, if any, submitted by the governor shall not result in expendi-
19 tures for the ensuing fiscal year being in excess of moneys and antic-
20 ipated receipts certified by the comptroller to be available for such
21 fiscal year, as provided by law. The comptroller shall certify and
22 ensure that each expenditure bill and proposed legislation shall not be
23 in excess of moneys and anticipated receipts available for such fiscal
24 year.
25 § 5. Resolved (if the Senate concur), That section 5 of article 7 of
26 the constitution be amended to read as follows:
27 § 5. Neither house of the legislature shall consider any other bill
28 making an [appropriation] expenditure until all the [appropriation]
29 expenditure bills submitted by the governor shall have been finally
30 acted on by both houses, except on message from the governor certifying
31 to the necessity of the immediate passage of such a bill.
32 If, by April fifteenth, the legislature has not finally acted upon all
33 of the expenditure bills submitted by the governor for such fiscal year,
34 a contingency budget, as the legislature shall provide by law, shall
35 take effect without further action by the legislature or the governor;
36 provided, however, that expenditures for the legislature and judiciary
37 and separate items added to the governor's bills by the legislature
38 shall be subject to approval of the governor as provided in section 7 of
39 article IV. The contingency budget shall provide the same expenditures
40 as were enacted or otherwise became law for the immediately preceding
41 fiscal year, and expenditure and anticipated receipts provisions in
42 effect for the immediately preceding fiscal year shall remain in effect
43 until the conclusion of the contingency period. Those provisions in the
44 contingency budget not altered by the legislature shall remain in effect
45 until such provisions are reenacted, repealed or superseded by subse-
46 quent legislation or the commencement of the next fiscal year.
47 § 6. Resolved (if the Senate concur), That section 6 of article 7 of
48 the constitution be amended to read as follows:
49 § 6. Except for [appropriations] expenditures contained in the bills
50 submitted by the governor and in a supplemental [appropriation] expendi-
51 ture bill for the support of government, no [appropriations] expendi-
52 tures shall be made except by separate bills each for a single object or
53 purpose, and such bills shall not contain statutory changes or other
54 statutory language other than such language specifically related to the
55 expenditure of such expenditures. All such bills and such supplemental
A. 596 4
1 [appropriation] expenditure bill shall be subject to the governor's
2 approval as provided in section 7 of article IV.
3 No provision shall be embraced in any [appropriation] expenditure bill
4 submitted by the governor or in such supplemental [appropriation]
5 expenditure bill unless it relates specifically to some particular
6 [appropriation] expenditure in the bill, and any such provision shall be
7 limited in its operation to such [appropriation] expenditure.
8 § 7. Resolved (if the Senate concur), That section 7 of article 7 of
9 the constitution be amended to read as follows:
10 § 7. No money shall ever be paid out of the state treasury or any of
11 its funds, or any of the funds under its management, except in pursuance
12 of an [appropriation] expenditure by law; nor unless such payment be
13 made within two years next after the passage of such [appropriation]
14 expenditure act; and every such law making a new [appropriation] expend-
15 iture or continuing or reviving an [appropriation] expenditure, shall
16 distinctly specify the sum [appropriated] of the expenditure, and the
17 object or purpose to which it is to be applied; and it shall not be
18 sufficient for such law to refer to any other law to fix such sum.
19 § 8. Resolved (if the Senate concur), That section 11 of article 7 of
20 the constitution be amended to read as follows:
21 § 11. Except the debts or refunding debts specified in sections 9, 10
22 and 13 of this article, no debt shall be hereafter contracted by or in
23 behalf of the state, unless such debt shall be authorized by law, for
24 some single work or [purpose] multiple work or purposes, to be distinct-
25 ly specified therein[. No]; provided that no such law shall take effect
26 until it shall, at a general election, have been submitted to the
27 people, and have received a majority of all the votes cast for and
28 against it at such election nor shall it be submitted to be voted on
29 within three months after its passage nor at any general election [when
30 any other law or any bill shall be submitted to be voted for or
31 against]. The state shall not enter into any borrowing arrangement,
32 including any contract, lease or other similar agreement, whether or not
33 on a contingent basis, for the purposes of making payments of principal
34 or interest on indebtedness of the state or any municipality, individ-
35 ual, or public or private corporation.
36 The legislature may, at any time after the approval of such law by the
37 people, if no debt shall have been contracted in pursuance thereof,
38 repeal the same; and may at any time, by law, forbid the contracting of
39 any further debt or liability under such law.
40 § 9. Resolved (if the Senate concur), That subdivision 8 of section 12
41 of article 7 of the constitution be amended to read as follows:
42 8. No appropriation shall be required for [disbursement] expenditure
43 of money, or income earned thereon, from any sinking fund created pursu-
44 ant to this section for the purpose of paying principal of and interest
45 on the obligations for which such fund was created, except that interest
46 shall be paid from any such fund only if, and to the extent that, it is
47 not payable annually and contributions on account of such interest were
48 made thereto.
49 § 10. Resolved (if the Senate concur), That subdivision 3 of section
50 13 of article 7 of the constitution be amended to read as follows:
51 3. Proceeds of refunding obligations shall be deposited in escrow
52 funds which shall be maintained and managed by the state comptroller or
53 by an agent or trustee designated by the state comptroller and no legis-
54 lative [appropriation] expenditure shall be required for disbursement of
55 money, or income earned thereon, from such escrow funds for the purposes
56 enumerated in this section.
A. 596 5
1 § 11. Resolved (if the Senate concur), That section 16 of article 7 of
2 the constitution be amended to read as follows:
3 § 16. The legislature shall annually provide by [appropriation]
4 expenditure for the payment of the interest upon and installments of
5 principal of all debts or refunding debts created on behalf of the state
6 except those contracted under section 9 of this article, as the same
7 shall fall due, and for the contribution to all of the sinking funds
8 created by law, of the amounts annually to be contributed under the
9 provisions of section 12, 13 or 15 of this article. If at any time the
10 legislature shall fail to make any such [appropriation] expenditure, the
11 comptroller shall set apart from the first revenues thereafter received,
12 applicable to the general fund of the state, a sum sufficient to pay
13 such interest, installments of principal, or contributions to such sink-
14 ing fund, as the case may be, and shall so apply the moneys thus set
15 apart. The comptroller may be required to set aside and apply such
16 revenues as aforesaid, at the suit of any holder of such bonds.
17 Notwithstanding the foregoing provisions of this section, the comp-
18 troller may covenant with the purchasers of any state obligations that
19 they shall have no further rights against the state for payment of such
20 obligations or any interest thereon after an amount or amounts deter-
21 mined in accordance with the provisions of such covenant is deposited in
22 a described fund or with a named or described agency or trustee. In such
23 case, this section shall have no further application with respect to
24 payment of such obligations or any interest thereon after the comp-
25 troller has complied with the prescribed conditions of such covenant.
26 The state shall have limited authority to issue revenue bonds as the
27 legislature shall provide by law.
28 § 12. Resolved (if the Senate concur), That section 17 of article 7 of
29 the constitution be REPEALED and a new section 17 be added to read as
30 follows:
31 § 17. There is hereby established in the state treasury a fund to be
32 known as the fiscal stabilization reserve fund. Such fund shall consist
33 of moneys deposited therein, and moneys shall be withdrawn from such
34 fund only for the purposes as provided herein. For each fiscal year
35 commencing on or after May first, two thousand eight, an amount shall be
36 transferred from the general fund and deposited in the fiscal stabiliza-
37 tion reserve fund which shall be calculated as one percent of all moneys
38 deposited into the state treasury, excluding federal funds, fiduciary
39 funds and bond proceeds, during the immediately preceding fiscal year,
40 reduced by the amount that the sum of the balance of the fund at the
41 beginning of the fiscal year and one percent of all the moneys deposited
42 into the state treasury during the immediately preceding fiscal year
43 exceeds five percent of the moneys excluding federal funds, fiduciary
44 funds and bond proceeds deposited into the state treasury during the
45 immediately preceding fiscal year. Moneys available in the fiscal
46 stabilization reserve fund shall be withdrawn from the fund and trans-
47 ferred to the general fund at the end of any fiscal year in the amount
48 that moneys deposited in the general fund during such fiscal year is
49 less than the amount paid from the general fund during such fiscal year,
50 provided that the amount transferred shall not exceed the amount of
51 moneys available in the fiscal stabilization reserve fund.
52 This section shall not apply in cases of invasion, suppression of
53 insurrection, or defense of the state in war, or suppression of forest
54 fires.
55 § 13. Resolved (if the Senate concur), That article 7 of the constitu-
56 tion be amended by adding a new section 20 to read as follows:
A. 596 6
1 § 20. Independent budget office. There is hereby established an inde-
2 pendent budget office to provide independent analysis of fiscal and
3 economic conditions.
4 This section shall take effect one year after it shall have become
5 law.
6 § 14. Resolved (if the Senate concur), That section 7 of article 4 of
7 the constitution be amended to read as follows:
8 § 7. Every bill which shall have passed the senate and assembly shall,
9 before it becomes a law, be presented to the governor; if the governor
10 approve, he or she shall sign it; but if not, he or she shall return it
11 with his or her objections to the house in which it shall have origi-
12 nated, which shall enter the objections at large on the journal, and
13 proceed to reconsider it. If after such reconsideration, two-thirds of
14 the members elected to that house shall agree to pass the bill, it shall
15 be sent together with the objections, to the other house, by which it
16 shall likewise be reconsidered; and if approved by two-thirds of the
17 members elected to that house, it shall become a law notwithstanding the
18 objections of the governor. In all such cases the votes in both houses
19 shall be determined by yeas and nays, and the names of the members
20 voting shall be entered on the journal of each house respectively. If
21 any bill shall not be returned by the governor within ten days (Sundays
22 excepted) after it shall have been presented to him or her, the same
23 shall be a law in like manner as if he or she had signed it, unless the
24 legislature shall, by their adjournment, prevent its return, in which
25 case it shall not become a law without the approval of the governor. No
26 bill shall become a law after the final adjournment of the legislature,
27 unless approved by the governor within thirty days after such adjourn-
28 ment. If any bill presented to the governor contain several items of
29 [appropriation] expenditure of money, the governor may object to one or
30 more of such [items] expenditures while approving of the other portion
31 of the bill. In such case the governor shall append to the bill, at the
32 time of signing it, a statement of the items to which he or she objects;
33 and the [appropriation] expenditure so objected to shall not take
34 effect. If the legislature be in session, he or she shall transmit to
35 the house in which the bill originated a copy of such statement, and the
36 [items] expenditures objected to shall be separately reconsidered.
37 Either house of the legislature may reconsider the governor's objections
38 first. If the house that was not of original jurisdiction wishes to
39 reconsider the objections first, such house may recall the bill from the
40 house of original jurisdiction. If on reconsideration one or more of
41 such [items] expenditures be approved by two-thirds of the members
42 elected to each house, the same shall be part of the law, notwithstand-
43 ing the objections of the governor. All the provisions of this section,
44 in relation to bills not approved by the governor, shall apply in cases
45 in which he or she shall withhold approval from any item or items
46 contained in a bill [appropriating] expending money.
47 § 15. Resolved (if the Senate concur), That the foregoing amendments
48 be referred to the first regular legislative session convening after the
49 next succeeding general election of members of the assembly, and, in
50 conformity with section 1 of article 19 of the constitution, be
51 published for 3 months previous to the time of such election.
