Provides that upon failure by the legislature to act upon a budget within 72 hours from the beginning of the state fiscal year a default budget shall take effect

2 Co-sponsors

• Michael H. Ranzenhofer
• James L. Seward

BILL NUMBER:S1971

Title of bill

CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY proposing an amendment to section 4 of article 7 of the constitution, in relation to reforming the state budget process

Purpose

To implement a fail safe mechanism through a Constitutional amendment mandating the use of the prior fiscal year State budget if no budget is agreed to within 72 hours after the April 1st commencement of the fiscal year.

Summary of provisions

Section 1 of the resolution amends Section 4 of Article VII of the State Constitution to stipulate that if both houses of the Legislature fail to finally act on all appropriation bills submitted by the Governor within 72 hours after the start of the new fiscal year, a "default budget" will be imposed that fiscal year. Essentially, the prior fiscal year's budget will be comprised of all appropriation bills for the immediately preceding fiscal year and all laws governing apportionment and allocation of those appropriations.

Within 15 days after the date on which the default budget becomes law, the Governor may make a determination that moneys and receipts available for the fiscal year are less than the immediately preceding year. In that event, the Governor shall have the following powers: transfer any appropriation for any object or purpose to another project or purpose only to meet contractual requirements; reduce by a uniform percentage all appropriations from the General Fund, or portions thereof, not necessary to meet contractual requirements or other requirements established by State or Federal law; and modify the operation of any law governing the apportionment and the allocation of appropriations.

If the Governor does make such a determination that moneys and receipts available for the fiscal year are less than for the immediately preceding fiscal year, the Governor must notify both houses of his determination and all modifications that will be made to appropriations or to the operation of laws for the fiscal year.

Justification

By failing to adopt an "on-time" budget, the State places schools, municipalities, and not-for-profit organizations at risk of not knowing when and how much State aid will be available to them. It may also delay the commencement (or continuation) of capital projects and other programs which are important to the residents of the State. By having such a "default" mechanism in place, ALL parties will have a greater incentive to negotiate in good faith and to make compromise necessary to achieve a fair and balanced budget. In the event that

they are unable to reach a consensus, the State and its residents will be able to move forward and to have certainty as to what allocations and spending will occur during the fiscal year.

Legislative history

2011-12 S. 2867/Judiciary Committee/A. 9075 - Ways and Means Committee.

Fiscal implications

None.

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 of members of the assembly, and, in conformity with section 1 of article 19 of the constitution, be published for 3 months previous to the time of such election.