Establishes the legislative budget office, enacts a balanced budget requirement and relates to budget reform and enacting performance budgets

Summary of provisions

SECTION 1 : Creates a non-partisan Legislative Budget Office (LBO), the primary responsibility of which will be to provide individual members and legislative committees information related to the budget process. The LBO will be tasked with the following:

*Preparing fiscal impact statements on any bill impacting State revenues or expenditures;

*Submitting an analysis of the Executive Budget by March 1st of each year;

*Developing alternative approaches to meet the financial obligations of the State, including reviewing debt obligations and bond requirements of the State and public authorities;

*Conducting continuing studies of budgetary matters including a five-year forecast of State budgetary projections; and

*Publishing documents to enhance official and public understanding of budget and public finance related matters.

The bill also creates an independent executive director appointed jointly by both houses for a six-year term. In addition, the bill creates a board of directors comprised of experts to develop best practices to be used by the LBO.

Section 2

Requires the Executive to submit a balanced budget in accordance with Generally Accepted Accounting Principles (GAAP).

Section 3

Requires the Legislature enact a balanced budget in accordance with Generally Accepted Accounting Principles (GAAP).

Section 4

Requires the Division of Budget to adopt a five-year financial plan and includes several provisions to ensure agencies are outlining agency goals and measuring program performance by requiring

agencies to develop five-year strategic plans that provide a description of the goals and objectives of each agency. Such agencies will also have to develop and implement performance plans to review actual program performance and ensure that the goals in the strategic plans are being met. For the 2016 and 2017 budgets, the bill requires the Division of Budget to designate at least five agencies as pilot projects in performance budgeting for those years.

Section 5

Sets forth an immediate effective date.

Existing law

Currently, there is no legislative budget office, the submitted and enacted state budgets are not balanced in accordance with GAAP, and there are no statutory requirements for a five-year financial plan or performance budgeting.

Justification

Reform of New York's budget process is long overdue. New York's budget process and practices have routinely produced late budgets that include spending that outpaces inflation and revenue growth.

By establishing the LBO, a non-partisan office that is modeled after the Congressional Budget Office (CBO), this bill ensures legislators are provided with the objective information needed to make decisions regarding the budget. Accurate, up-to-date information is a key ingredient for prudent, timely budgetary and public policy decisions. This newly created office will provide that information and analysis to all state lawmakers. Each year, the LBO will provide all members of the Senate Finance Committee and the Assembly Ways and Means Committee with analyses of the Executive Budget by March 1st. This provides ample time for members to review such analyses before the budget deadline of April 1st.

Because it is non-partisan, members of the Senate and Assembly will have access to the same data, analyses and information thereby helping to reduce the yearly struggles that emerge over the disparities in both revenue and expenditure projections. This should in turn lead to more timely budgets based on sound fiscal policy. At least 23 other states including California, Texas, Florida, Connecticut and Vermont have already established non-partisan budget offices to assist their legislatures.

In addition, this bill requires the Executive to submit a balanced budget and the Legislature to enact a balanced budget that is in accordance with GAAP. This will help prevent budgetary gimmicks that push obligations into the future and result in structural imbalances. Similarly, using a five-year financial plan will help monitor the consequences of current decisions on long-term finances.

Finally, this bill requires agencies to continually assess agency programs and ensure that programs are actually meeting outlined goals. Requiring such assessments, as well as introducing a performance budgeting pilot program, will ensure that State government programs work and achieve their goals in the most cost-efficient way.

Legislative history

2011-2012 Session - S. 4006-A, 2011 - Advanced to 3rd Reading and Committed to Rules; 2012 - Referred to Senate Finance 2013-2014 Session - S.3946, 2013 - Referred to Senate Investigations and Operations

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately.