Senate Passes Contingency Budget

James L. Seward

February 15, 2005

The New York State Senate has passed legislation that would puta contingency budget in place that would be the first step towards implementing the Senate’s budget reform plan this year and would facilitate agreement on a new budget before the April 1st deadline.

The contingency budget was submitted as a program bill to the legislature last Friday by Governor Pataki. It would maintain spending levels adopted by the legislature in the 2004-05 budget, with certain limitations and revisions. The contingency budget, which totals $103 billion, would take effect on April 1, 2005 if a new spending plan is not in place.

"The contingency budget should be in place in case we don’t reach agreement on a new budget, not instead of a new budget," Senator Bruno said. "The contingency includes the funding needed to keep government functioning and it provides a degree of funding certainty, but it does not include any new programs, or any changes in taxes spending that may be sought by the governor, Senate and Assembly. In that respect, it provides a strong incentive for all sides to reach agreement on a new budget by April 1st so the contingency does not take effect.

"In the bigger picture, passing a contingency budget effectively starts to reform the budget process this year, not in 2006, 2007 or 2008," Senator Bruno said. "I urge the Assembly to join us in passing the contingency budget and in enacting budget reform."

The contingency budget is consistent with the budget reforms supported by the governor, as well as the reform legislation passed last year by the Assembly. The contingency budget process mirrors what would take place automatically next year, if a budget reform constitutional amendment is approved by voters in November.

"With the governor on board and the Senate prepared to act, all that is needed is for the Assembly to pass the contingency budget to put it into law," Senator Bruno said. "The speaker has talked about putting budget reform in place next year, or the year after that or in 2008, but after 20 years of late budgets the people of this state are understandably angry and frustrated and want budget reform now, not later."

"Budget reform is one of my top priorities this session and the contingency budget we are passing is a crucial component of our budget reform package," said Senator Seward. " I am hopeful that the Assembly will see fit to pass this bill so that we can ensure that New Yorkers have the on-time budget they want and deserve this year."

The contingency budget would consist of all prior year appropriations and reappropriations adopted by the legislature including the appropriations vetoed by the governor. Total spending for each item under the contingency budget is limited to last year’s spending, with the exceptions of public assistance grants, certain federal funds, debt service and other special contractual obligations, and binding legal obligations required under federal law or the state constitution, which would not be subject to spending limitations.

Legislation related to the preceding fiscal year’s budget would remain in effect during the contingency period. These provisions are deemed frozen during the contingency period. Trend factors, cost of living adjustments or other automatic rate adjustments would not go into effect. No new contracts would be authorized, other than for the continuation of ongoing services or projects.

Senator Bruno praised the public leaders' meetings that have been held the last two weeks and called for them to continue throughout the budget process. He also reiterated his support for having the state comptroller determine state revenues and other available resources, in the event a consensus cannot be reached. Senator Bruno said he recently spoke with Comptroller Hevesi and the comptroller agreed to be the arbiter of state revenues and avails to help move the budget process forward.

"Between the contingency budget, the public leaders meetings, the participation of the comptroller, each house passing budgets and going to conference committees, we have everything in place to reach agreement on a new budget by April 1st, provided everyone involved has the will to get a budget done," Senator Bruno said. "It doesn’t serve any purpose to confuse the situation and delay the process by arguing about the Court of Appeals decision. This negotiation, this process, is about agreeing on a budget. If we reach a three-way agreement, the final budget we adopt will address the concerns raised by the court decision."

Senator Bruno said the contingency budget the Senate passed is consistent with the contingency budget provision included in the budget reform legislation (S.3) passed by the Senate last month that would fix the process beginning this year.

The legislation also includes many of the budget reform provisions included in a bill (S.2) that would put budget reform in place in 2006. That bill accompanies a budget reform constitutional amendment (S.1) that would go before voters in November 2005. A contingency budget is part of both bills. The Senate passed S.2 and S.3 in January and will act soon to give second passage to the constitutional amendment.

The bill was sent to the Assembly.