Senator Flanagan Announces Budget Reform Signed Into Law

John J. Flanagan

January 31, 2007

Senator John Flanagan (2nd Senate District) announced that budget reform legislation he sponsored in the Senate has been signed into law. The legislation, which will help ensure on-time budgets, reflects an agreement between the Senate, Governor and Assembly.

"This change is a great beginning to improving New York State government operations. The taxpayers deserve to know how their money is spent and this reform provides that information. Albany needs to understand that the money for programs, regardless of their public benefit, is the people's money and the people have a right to see how is used," stated Senator Flanagan.

The changes to the budget process require:
-That hat every dollar the Legislature adds to the budget be clearly lined out or agreed to by the executive and Legislature, and publicly voted on in both the Assembly and the Senate;

-That the Legislature assemble joint budget conference committees within 10 days of submission of the Executive Budget. This will provide more time for discussion and agreement on the issues presented in the budget;

-The legislature to explain fiscal impacts of changes it makes to the governor's budget bills;
Plain language impact statements will be prepared on a range of program areas, including local governments;

-The Governor must provide greater itemization of spending in the budget. This includes funds for Temporary Assistance for Needy Families (TANF), Medicaid and the Environmental Protection Fund (EPF);

-Accelerated discussions of revenue forecasts and spending projections to November 5th to ensure that the needs of the state are clear earlier;

-The Legislature, working with the Comptroller, must push up the date for joining together to discuss revenue projections which have been a continuing source of disagreement during budget negotiations. If the Legislature is unable to meet their March 1 deadline for this agreement, the Comptroller would have until March 5 to set this revenue amount; and

-There will be a new "rainy day" fund, setting aside three percent of the General Fund in reserve. This funding will be added on top of the current two percent "rainy day" fund for a total of five percent. The new fund can be used in the event of economic downturn or disaster.

Additionally, Senator Flanagan announced that two pieces of legislation to reform the budget process passed the Senate. The enhanced changes would require even greater itemization of spending and go beyond the reforms that were signed into law.

The primary reform would be the complete itemization of the spending in the State Budget. This would include complete disclosure of every dollar to be spent by the Governor, Legislature, Judiciary and all State agencies and appropriated spending for authorities.

"The public deserves clarity in how the government operates and through complete itemization, we would provide maximum transparency. The money belongs to the people of the state and this would allow all residents to clearly see where that money is spent," said Senator Flanagan.

The Senate budget reform bill would also eliminate the need for the State Public Authority Control Board (PACB) to approve capital projects already authorized in the budget to prevent major projects from being used as political bargaining chips and to bring greater openness and accountability to the process.

The reform package would also change the types of projects that require Public Authorities Control Board (PACB) approval. Capital projects that have been itemized within an appropriation bill would no longer require PACB approval.

Currently, PACB approval is required for all projects financed through ten specific authorities. The PACB reforms in this legislation would require all Public Authority projects financed with State funds to be specifically lined out in the State budget and approved by the Legislature to move forward.

Since the Governor and Legislature would have to approve these projects in the budget, PACB approval would be unnecessary.

In order to maintain oversight over Public Authority spending, PACB approval will remain for projects related to housing, hospitals, and other projects which are financed through certain public authorities, but do not use state funds.

The Senate also gave second passage to a constitutional amendment that addresses concerns raised by Court of Appeals decisions regarding the power and authority of the Governor and the Legislature in the budget process. This amendment would ensure that the Executive Budget submitted by the Governor could be acted upon by the Legislature to ensure an appropriate balance of power.

Currently, the Governor is able to submit an Executive Budget which unilaterally changes law without providing the Legislature with any opportunity to either amend or reject those changes. The constitutional amendment, passed by both houses in 2005, would require that budget bills submitted by the Governor include appropriations which are either constrained by the provisions of existing law or are consistent with separately proposed legislation intended to amend existing law.

The amendment would also allow the Legislature to amend any appropriation which was not submitted in accordance with that requirement, thereby maintaining an appropriate balance of power by prohibiting the Governor from unilaterally changing state law.

Additionally, the amendment would require greater specification and itemization of appropriations and require the Legislature to explain the fiscal impact of any additions to the Governor’s budget and identify the funding to pay for them.

"Taking politics out of the equation will allow the state to operate openly, fairly and efficiently. Every step that we can take to add a sense of comfort and accountability to the people we represent is a good step. Open the process, streamline the process and make good changes for the taxpayers of this state - that must be the law in Albany from this point forward," added Senator Flanagan.

The two pieces of legislation passed by the Senate was sent to the Assembly for action and then will be delivered to Governor Eliot Spitzer for approval.