Senate Passes Two Budget Reform Bills

John J. Flanagan

January 13, 2005

Citing the need to restore public confidence in New York's budget-making process, Senator John J. Flanagan (2nd Senate District) announced that as its first order of business for the 2005 legislative session, the New York State Senate passed two comprehensive budget reform bills that would fix the budget process and put an end to late budgets beginning this year with the enactment of a contingency budget in the event a new budget is not enacted by April 1.

"Once again the Senate is leading the charge for meaningful budget reform that guarantees an end to budget delays and promotes fiscal stability for the state," Senator Flanagan said. "The Senate plan represents the best, most sensible approach to budget reform. It will guarantee that a new budget is in place on time, every year."

"My greatest frustration as a New York State Legislator for the last eighteen years has been the Legislature failing to collectively produce an on-time budget. The people of this state deserve a budget that is on time, every time," Senator Flanagan said. "I hope that the Assembly passes a budget reform bill early this session so we can resolve the differences and enact a reform plan into law."

Senator Flanagan said action was needed on a budget reform proposal this year in light of the recent Court of Appeals ruling on the budget process that effectively shuts 212 elected representatives out of the budget process.

The Senate approved a budget reform bill (S.2), passed by both houses last year, that would:
> Provide more time for budget negotiations by requiring an earlier submission of the Executive Budget;
> Change the start of the state fiscal year (SFY) from April 1st to May 1st, beginning in SFY 2006-7;
> Provide for greater detail and more disclosure in the budget;
> Put a contingency budget into effect automatically if a new budget is not adopted by the May 1 deadline; The contingency budget would continue the previous fiscal year budget forward until it is changed by the Legislature; and
> Require a two year appropriation for state school aid.

The Senate also passed a budget reform bill (S.3), originally passed by the Senate last month, that would take effect immediately and change the budget process this year. The Governor has said he would sign this bill into law, if passed by both houses. The bill includes many of the same provisions as the other bill (S.2), including the May 1st fiscal year date and the two-year school aid appropriation. The primary differences of this bill are:

> It would take effect in time to reform the budget process in 2005, instead of 2006;

> The Governor would submit a contingency budget by February 1st which would have to be adopted by the Legislature prior to the beginning of the fiscal year. Legislation related to the preceding fiscal year’s budget would remain in effect during the contingency period;

> It would create the Independent Financial Review Board to determine whether receipts would be sufficient to meet spending requirements. If the Board determines that receipts would be insufficient to meet spending requirements authorized by the Contingency Budget, uniform reductions would automatically be made to all spending items, except those which are exempt from spending limits, no later than 15 days after the beginning of the fiscal year. The five member board would be comprised of one appointment each from the Senate Majority and Minority leaders, the Assembly Speaker and Minority leader and Chairman to be nominated by the Governor and approved by both houses;

> Also, the bill would end the contingency budget period upon passage of a single multiple appropriation bill amending the Contingency Budget, submitted by the Governor within 15 days of the start of the contingency period. The Governor’s submission may propose reductions to appropriations in the Contingency Budget and propose additions to the Contingency Budget which reflect policy initiatives.

In addition, the Senate has introduced a resolution (S.1) for second passage of a budget reform constitutional amendment that accompanies one of the bills (S.2) passed today.

Both bills were sent to the Assembly.