Would the “comprehensive reforms” unveiled today by the state Senate’s Majority Democrats “fix the state’s broken budget process and give New Yorkers a fiscally responsible budget,” as they claim?

Of course not.

There are, however, some good ideas in the package that would moderately boost transparency and encourage better long-term planning if properly implemented.These include:

  • Biannual (i.e., two-year) budgeting.  While this won’t actually “ensure responsible long-term fiscal planning,” as the sponsors say, it will certainly be more conducive to it.  At the very least, a two-year budget would mean half as many blown fiscal year deadlines.
  • Budgeting on the basis of Generally Accepted Accounting Principles (GAAP).  As Josh Barro and I note in our magnum opus, this would disallow much of the timing-related gimmickry that can occur under New York’s cash-based budgetary accounting.  The same change has been proposed by Lt. Gov. Richard Ravitch; unfortunately, Ravitch links it to some not-so-hot ideas, including $6 billion in deficit borrowing.
  • Establishment of a non-partisan Legislative Budget Office (LBO), modeled on the Congressional Budget Office (CBO), to “score” appropriations bills and forecast revenues for both houses.  Would the LBO replace and absorb most of the resources of the Legislature’s existing partisan fiscal staffs?  Not necessarily under the Senate bill, unfortunately.
  • Creation of a 15-member Commission, including legislative appointees, to designed performance management and budgeting standards.  A move to performance-based budgeting would be an excellent idea (and could also form the basis for more use of competitive contracting of state services, by the way), but such an initiative would be more properly guided and controlled by the executive branch.
  • Cost benefit analysis of tax breaks and mandatory statutory “sunsets” of all tax credits, exclusions and deductions.  Fine–bring it on.  For example, an honest analysis would reveal the fallacy behind the state film credit, which Senate Democrats have joined the Governor in seeking to vastly expand; advocates seem to believe industry hype implying that film credits are some sort of economic perpetual motion machine.   But this proposal begs the question: why no cost-benefit analysis of spending programs?  Let’s get serious here: it’s indefensible to subject tax breaks to a more demanding standard than spending.

In an interesting twist, the package calls for moving the state fiscal year start from April 1 to June 1 — and not July 1, which is the norm for other states and which has been favored by most other reform advocates (including me).  The Democrats released a separate report devoted to this issue, which offers some interesting new arguments, along with a valuable review of practices in other states and of New York’s budgetary history in this area.

testified last December before the Senate committee that recommended today’s changes and thought committee’s initial report, released in February, was a useful and serious contribution to the debate.  Here, drawing from my testimony, are some needed changes missing from the Senate Democrats’ plan:

  • Impose a “72-hour rule” requiring that key information about the budget be publicly available three days in advance of a final vote.  This information would include (a) an updated multi-year financial plan prepared by the Division of the Budget in consultation with the Legislature, and (b) a memo—in a uniform format for both houses—detailing the fiscal impact of changes to the governor’s proposed appropriations and revenue bills.
  • Cap spending by limiting of revenues that can be spent in a given fiscal biennium, and limit the use of surpluses to funding tax rebates and building a larger budget stabilization fund.   An example of such an approach would be the Tax Expenditure Limitation amendment proposed in 2006 by Senator Raymond Meier and Assembly Robin Schimminger.
  • Require that the state budget be balanced on an all-funds basis at the time of its presentation and adoption, and that it be kept in balance on a quarterly basis throughout the biennium.
  • Empower the governor under limited circumstances to make uniform, across-the-board reductions in appropriations, with exceptions for services essential to health and safety, in the event the Legislature first refuses to act on a plan for completely closing deficits projected by the Budget Division during a fiscal year.
  • Require voter approval of almost all debt, with important exceptions for (a) a small amount of state facility upgrade debt, and (b) borrowing supported by specific project revenue such as tolls, rents and transit fares.  In contrast to current law, voters could be asked to approve more than one bond proposition in a single election.

You may also like

How Washington’s Budget Bill Will Affect Health Care in New York

UPDATE: The final version of the federal budget bill omitted a handful of provisions that had been included in earlier drafts. One would have penalized states that use their own money to provide coverage for undocumente Read More

Two Dozen School Districts Are Returning to the Polls for Budget Revotes

Voters in 24 New York school districts return to the polls on Tuesday for school budget revotes. Last month, voters in 96 percent of school districts outside New York City conducting votes approved their school budgets for the upcoming year. The 683 sc Read More

New York’s Proposed ‘MCO Tax’ Would Generate a Fraction of What Lawmakers Expected

The Hochul administration's proposed "MCO tax" would generate far less than the $4 billion in extra federal aid anticipated by state lawmakers when they approved the concept this spring, according to documents obtained by t Read More

How 1199 Earns its Reputation as Albany’s No. 1 Labor Power Broker

For the fourth time in six years, the president of New York's largest health-care union, George Gresham of 1199SEIU, has won the top spot on the "Labor Power 100" list from City &am Read More

New York Runs Away from the Pack on Medicaid Spending

New York's per capita Medicaid spending jumped 14 percent in 2023, moving it further ahead of the rest of the country, recently released nationwide data show. In the federal fiscal year that ended last September, New York spent $94.6 billion Read More

Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough

Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget. Read More

New York’s Medicaid Spending Is Running Billions Over Budget

New York's Medicaid program ran billions of dollars over budget during the first half of the fiscal year, adding to signs of a brewing fiscal crisis in Albany. According to the fro Read More

Hospital Lobby’s TV Campaign Spreads Misinformation About Medicaid

As New York's health-care industry agitates for more money from the state budget, two of its most influential lobbying groups are airing TV ads that make alarmist and inaccurate claims about Medicaid. Read More