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Originally Published: April 11, 2012

Report card finds mixed results in state’s implementation of 2007 budget reforms

Further reforms needed to enhance transparency, integrity, and efficiency of budget process

Citizens Union today gave two grades of “I”, for “improvement but still incomplete” to New York State’s recently completed budget process.  In its New York State Budget Reform Report Card: 2012 An Improvement but Still An Incomplete, Citizens Union graded the state’s budget process that concluded less than two weeks ago, as well as the process in 2010 and 2011. Though no messages of necessity were issued for passing the state budget in 2012 – which was enacted one day ahead of the deadline –  the report card found mixed results regarding implementation of major aspects of the 2007 reforms. It also found that there had been no action to enact further reforms beyond those put in place in 2007, resulting in a budget process that, while improved, continues to be flawed.

The major findings of the report card, which highlight the most recent budget adoption cycle that concluded at the end of March in 2012, are as follows:

  1. While no messages of necessity were used for budget bills in 2012, unlike in 2010 and 2011, other major pieces of legislation with large fiscal impacts were unfortunately passed with such messages prior to the adoption of the budget, including the Tier 6 Pension legislation in March 2012 and the income tax overhaul of December 2011.
  2. The unfulfilled requirements of the 2007 Budget Reform Act during this year’s budget process were: missing the deadline for the start of the “quick-start” budget negotiations in November 2011; the exempting of certain lump-sum appropriations from itemization in joint resolutions of the senate and assembly; and the lack of fiscal impact statements for certain budget bills in both houses prior to votes.
  3. There continues to be no movement on other widely-supported measures to improve the budget process, such as incorporating performance measurement, requiring the use of Generally Accepted Accounting Principles (GAAP), and the creation of an Independent Budget Office.
  4. The state budget continues to lack adequate transparency, with budget documents hard to decipher for the general public, and no release of budget data in user-friendly formats such as spreadsheets to allow for independent analysis.
  5. While new member items have not been funded in the budget for the last few years, discretionary funds continue to be available and are distributed through “reappropriations” of the Community Projects Fund. Other funds have been treated like member items  such as the ”bullet aid” for school districts, and have largely lacked needed public scrutiny.

The 2007 reforms included, among other items, “quick-start” budget discussions and a March 1st deadline for revenue consensus; itemization of certain lump-sum appropriations and prohibition of legislative lump-sum additions; a requirement for the legislature to pass rules regarding the formation of joint conference committees and issuance of a schedule of dates for public hearings and meetings; provision of fiscal impact statements on legislative changes before any vote; executive multiyear financial plans; and authorization of a new “Rainy Day” fund at up to three percent of General Fund spending.

The report card reviewed the state’s adherence to elements of the 2007 budget reforms, and pointed out areas where additional reform is needed to improve the state budget process.  Citizens Union has released previous reports on state budget reform, including a report card on the 2008 and 2009 cycles, and a December 2008 Issue Brief and Position Statement on New York State Budget Reform.  

“The spirit and legal requirements of the 2007 reforms must be met and additional budget reforms are still needed if New Yorkers are to hold state government accountable and trust in the decisions it makes – especially in continued trying fiscal times when tough decisions need to be made about taxes and spending.” said Dick Dadey, Executive Director of Citizens Union.

“The reform proposals contained in Citizens Union’s report card have wide public support and should be implemented without delay – such as using GAAP budgeting, performance budgeting, and creating an Independent Budget Office.” said Rachael Fauss, Citizens Union’s Policy and Research Manager. “Even though this year’s budget process was been better than in past years in some areas, additional reforms are needed to ensure the process improves in future years.”

Citizens Union urged the Governor and State Legislature to enact Citizens Union’s reform proposals contained in its report card to enhance budget integrity, improve transparency, and increase efficiency of the budget process.

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