Senator Charles J. Fuschillo Jr., recently citing the need to restore public confidence in New York's budget-making process, announced that the Senate's Budget Reform Act of 2003 will be the very first pieces of legislation that will be acted on by the Senate this session. By acting on the bills, the Senate is renewing its call for meaningful budget reform that guarantees an end to budget delays and promotes fiscal stability for the state.
According to Fuschillo, the Budget Reform Act of 2003 is a sweeping budget reform plan that calls for reshaping every aspect of the state's budget-making process in order to ensure that a budget is passed on time. The plan includes shifting the start of the state fiscal year to May 1; early submission of the Executive Budget and public submission of agency budget requests; providing for a binding revenue forecast; and imposing a default budget as a backup to ensure a spending plan is in place by the deadline. The default budget would be a continuation of the previous year's budget, along with flexibility to make adjustments should revenues be forecast at a lower level than the previous year.
"Budget reform will be the Senate's top priority this year which is why these bills will be the first ones we take up this year," Fuschillo said. "We are facing the biggest fiscal challenge in the state's history with a budget process that has failed to produce an on-time budget in 18 years. The elements of our plan have been endorsed by virtually every major newspaper in the state and recognized as the best way to fix the budget process.
"Speaker Silver has already indicated that he's going to hold the budget hostage to non-budget issues, the same tactic that resulted in the latest budget ever in 1997," Fuschillo said. "I urge the Assembly to pass a budget reform plan as soon as possible so we can break the cycle of late budgets."
The Budget Reform Act of 2003 includes:
* Budget Requests (Oct. 15) - requires agencies to submit individual preliminary budget requests to the Legislature and the public at the same time they are forwarded to the Governor, providing additional time for study and review;
* Enhanced Fast Start (Nov. 15) - requires commencement of three-way discussions between the Senate, Assembly and Governor to project expenditures for Medicaid, public assistance, school aid and other costs, as well as begin the process of estimating tax and other revenues for the coming year;
* Early Budget Submission (Jan. 15) - requires earlier submission of the Executive Budget by Jan. 15 (Feb. 1 for a newly elected Governor) and shortens the amendment period from 30 days to 15 days to allow additional time for legislative review;
* Consensus Revenue Forecasts (March 1) - requires three-way agreement by March 1 on revenues for the new fiscal year, clearing a major stumbling block for an on-time budget. If the Legislature and Executive fail to agree on a forecast, the independently elected Comptroller is charged with providing a binding forecast of tax, lottery and fee revenues within five days that would be the basis for the final adopted budget.
* Budget Conference Committees (March 16) - Both houses would be required to pass budget resolutions by March 15; The General Budget Conference Committee would meet March 15 to establish spending parameters for individual service areas. Individual conference committees would negotiate budgets for assigned agencies;
* New Start of Fiscal year (May 1) - The start of the fiscal year would move from April 1 to May 1 to provide adequate time for analysis and discussion of budget proposals. New York currently has the shortest time frame for legislative budget deliberations of the largest states in the nation;
* Default Budget (May 1) - If on May 1 no budget agreement has been reached, a default budget would become the adopted state budget. Following the examples of Wisconsin and Rhode Island, this default budget would be a continuation of the previous year's budget, along with any statutory requirements enacted as part of the prior year's budget. Total spending would remain constant over a two-year period and the ability of the Legislature to implement a supplemental budget or the Executive to submit supplemental appropriations would remain in place.
* If the Comptroller's binding revenue forecast projects less revenue than the previous year, and the Legislature does not act, the Governor would be allowed to modify laws and formulas affecting local aid to ensure that spending does not automatically exceed last year's spending levels. The Governor would also be allowed to transfer unneeded appropriation authority to meet contractual obligations and to proportionately reduce spending in all discretionary areas to below the prior year's level. The Governor would have the ability to tap into the Tax Stabilization Reserve Fund.
* Structural Reforms/Reserve Fund - requires a three-year projection of the financial impact of any changes to the Executive Budget by individual conference committees. Additionally, a reserve fund equal to five percent of all state funds would be created to cushion unexpected economic downturns and natural disasters. Such a fund, if it were in place today, would require reserves of approximately $2.9 billion, instead of the $710 million currently in the Tax Stabilization Reserve Fund.