Senator Charles J. Fuschillo, Jr. announced that the Senate has passed the Budget Reform Act of 2004 (S.1A & S.2A). These bills would eliminate a majority of the reasons cited for the continual problem of budgets delays in New York State.

"The people of this state have been calling for, and deserve, a fair and true budget on time every year and this act will answer that call," stated Senator Fuschillo. "This reform will not only give them a timely budget they deserve but will open up the budget process for public scrutiny and comment."

The Budget Reform Act of 2004 is a sweeping budget 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 every time. Fuschillo noted that the Assembly passed a budget reform package that differed in detail from the Budget Reform Act of 2004 but that there exists an opportunity for cooperative discussions to solve those differences. "This must be a two-house, bipartisan effort to deliver the best policy to the people of this state. Now is not the time for politics but rather a time to end the rhetoric that has marked the last two decades of budgetary negotiations." The Budget Reform Act of 2004 has been endorsed by every major newspaper in the state.

The Budget Reform Act of 2004 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 16 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 $3.4 billion, instead of the $710 million currently in the Tax Stabilization Reserve Fund.