Provides for implementation of a "current services budget" as the state budget in the event a budget is not passed by the legislature in a timely manner

* Establishing a constitutional requirement that the legislature pass the budget before the first day of the fiscal year,

* Providing for the implementation of a "current services budget" as the state budget in the event a budget is not enacted in a timely manner, and

* Protecting the legislature's constitutional right to strike out or reduce items in appropriation bills submitted by the governor, by precluding the presence of statutory language therein.

Summary of provisions

This bill contains amendments and additions to the state constitution.

* Sections 1 and 2 amend Article 3 (sections 13, 14, and 16) and Article 4 (section 7) of the constitution to carve out exceptions to certain procedural requirements regarding the enactment of bills. The amendments will allow for the automatic implementation of a "current services budget" if a budget is not passed by the first day of the fiscal year, under circumstances detailed in Article 7 as amended by this legislation.

* Section 3 amends Article 7, amending sections 1,2,3,4,6, and 7, and adding a new section 3-a.

* Provides, by amending VII (1), that the information sent to the governor by department heads shall include projections of the expenditures required to provide, throughout the upcoming fiscal year, the same level of all services and functions as currently provided. In so doing, the department heads shall consider various relevant specified factors.

* Provides, by amending VII (2), that the governor shall submit a proposed budget at least eighty days prior to the first day of the upcoming fiscal year, or by February 1 in each year following a gubernatorial election year, if in that year February 1 falls less than eighty days prior to the upcoming fiscal year. When submitting a proposed budget to the legislature, the governor shall include a current services budget setting forth projections regarding the expenditures required to continue to provide, throughout the upcoming fiscal year, the same level of all services and functions as currently provided. Provides that the governor shall include, in addition to recommendations as to any proposed legislation which may be deemed necessary to provide moneys and revenues sufficient to meet proposed expenditures, recommendations as to any other proposed legislation deemed necessary to implement the proposed expenditures, and also a description of all legislation deemed necessary to implement the current services budget.

* Amends VII(3) to provide that the governor shall submit, at the time of submitting the budget:

* A bill or bills containing all proposed appropriations and reappropriations,

* A bill or bills containing all the proposed legislation deemed necessary to provide moneys and revenues sufficient to make proposed expenditures,

* A bill or bills containing all the proposed legislation deemed necessary to implement proposed expenditures,

* A bill or bills containing all appropriations and reappropriations necessary to implement the current services budget,

* A bill or bills containing all legislation deemed necessary to implement the current services budget. Under current law, the governor now must submit a bill or bills containing all proposed appropriations and reappropriations in the budget and the proposed legislation, if any, recommended therein. The effect of the amendment is to more clearly identify the types of bills used for these purposes, and to preclude their intermingling, as well as to provide for submission of parallel bills for the new current services budget in the event it must be implemented.

* Adds a section 3-a to Article VII to provide a process by which the assembly an senate shall, at least ten days before the beginning of the fiscal year, pass a concurrent resolution on the budget in order to serve as an internal mechanism for guiding the actions of both houses of the legislature and their communities on all budget-related bills. The amendment requires that each house begin by passing a resolution on the budget containing the house's determination as to appropriate levels of revenues and expenditures for the upcoming fiscal year, and the amount by which state revenues should increase or decrease. Within two days of the adoption of such a resolution in each house, a conference shall be held to reconcile the two resolutions. Until the concurrent resolution is passed, it shall not be in order in the senate or the assembly to consider any other budget-related matter.

* Amends VII(4) to provide that the legislature may not alter any of the current services budget bills submitted by the governor unless such amendments are recommended by the state comptroller as necessary to ensure the same level of all services and functions, throughout the upcoming fiscal year, as currently provided. Also provides that if by the first day of the fiscal year, both houses of the legislature have not acted on the governor's budget bills in a manner that the comptroller determines is sufficient for the ongoing operation and support of state government, the current services budget bills will be deemed enacted. They will remain in effect all year unless, within sixty days of the beginning of the fiscal year, both houses act in the manner required on the governor's budget bills.

* Amends VII(6) to provide that no proposed changes in the state's statutes shall be included directly or indirectly in any appropriation bill or supplemental appropriation bill submitted by the governor. Rather, such changes, if deemed necessary, shall be included in a bill that does not contain appropriations.

* Amends VII(7) to provide that if a current services budget appropriation bill is deemed enacted, such enactment shall be an appropriation by law for the purposes of this section, which currently requires that no money shall be paid out of the treasury except in pursuance of an appropriation by law.

Justification

For the past eighteen years, New York State's budget has been late. Beyond the bad press, late budgets:

1. Throw local governments, school districts, state agencies, non-profits and businesses that rely on state aid into a turmoil of fiscal uncertainty. These entities are often forced to borrow money just to cover basic operating expenses. They may also indefinitely delay new programs, such as pre-K programs or programs to build new schools or roads, because of uncertainty about funding levels;

2. Have an adverse impact on the state's bond rating, thus increasing debt service, and increasing the burden on the taxpayer; and

3. Monopolize the attention of the Legislature, frustrating individual members and crowding out our ability to deliberate on all other pieces of legislation.

This legislation provides a structural improvement to the process, with a constitutional provision directing the legislature to adopt, as does the Congress of the United States, a concurrent resolution on the budget for the upcoming fiscal year. The concurrent resolution shall set forth appropriate levels for the fiscal year for: totals of new appropriations and expenditures for major functional categories; total revenues and the amount by which revenue should be increased or decreased; the surplus or deficit in the budget; and other items as determined by the legislature. With this concurrent budget resolution; we will be able to recommend appropriate levels of revenue and spending, and we will have an internal mechanism for guiding our deliberations on revenue, spending and other budget-related legislation. Adding this element to the budget process enhances our ability to focus on what really matters - the big picture - and gets the Assembly and Senate talking early. Having the ability to work constructively on the budget at the beginning of the process will help us better serve our constituents, by increasing the involvement of all legislators and by increasing the visibility and public understanding of our intentions. The legislation provides that until the concurrent resolution on the budget for a fiscal year has been adopted by the legislature, it shall not be in order for either house to consider any bill that makes an appropriation for that fiscal year or changes revenues for that fiscal year.

The legislation also establishes a constitutional deadline for enacting a budget, and a consequence of failing to meet that deadline. This long-discussed reform is established in a way that is both effective and flexible, using a two-step process and the concept of a "current services budget", which projects the cost of continuing levels of activity and programs for the current fiscal year as well as provisions of law scheduled to take effect through the conclusion of the ensuing fiscal year. If the legislature does not pass a budget by the beginning of the fiscal year, then the current services budget is deemed enacted.

During the first sixty days of the fiscal year, however, the legislature can continue to work on a new budget. If they succeed in enacting a budget, that budget is in full force and effect as of the sixty-first day of the fiscal year. If they fail, the current services budget, already in place, becomes the budget for the new year. In any case, continuity of state funding is assured, providing for the efficient operation of state government.

Finally, the legislation clarifies, in the constitution, the manner in which the governor should propose any changes in the statutes of the state deemed necessary in order to implement the proposed budget. Such changes belong not in any appropriation bill but rather in a bill or bills containing proposed legislation. With this clear, the legislature's constitutional right to strike out or reduce items in appropriation bills will no longer be threatened by the presence of statutory language therein.

The negative effects of New York State's chronically late budgets are well documented. What has been lacking is the political will to conduct our business on time. New York State sorely needs this measure to restore effectiveness and responsibility to the budget process.

Legislative history

2008-07 S.4503 - Referred to Judiciary 2006-05 S.707 - AG Opinion Referred to Judiciary 2006-05 S.707 - Referred to Attorney General for Opinion 2004-03 S.2112 - Referred to Judiciary 2002 A.6181 - Passed Senate

Fiscal implications

Localities and entities doing business with the state would no longer be forced to borrow money. The state would save on interest payments and other costs associated with borrowing at a higher rate.

Effective date

Resolved (if the Assembly concur), that the foregoing amendment be referred to the first regular legislative session convening after the next succeeding general election.