The months between September 2007 and adoption of New York State’s next annual budget in March 2008 are a critical juncture in the efforts to “fix Albany.” The process by which that budget is prepared and debated, as well as the substantive decisions it embodies, are central to the movement for political and fiscal reform in New York State. In order to promote fiscal reform, the Citizens Budget Commission (CBC) is convening three separate agenda-setting conferences for key stakeholders in the state budget process in the months of September, October and November 2007. Each session will focus on one aspect of fiscal reform with a goal of identifying specific next steps for action in the coming budget cycle and beyond.

The three dimensions of fiscal reform to be considered are:

1. Greater accountability and transparency in fiscal decision making.
2. More effective use of State fiscal resources.
3. More equitable and affordable local tax burdens.

This background paper focuses on the first issue. It has been prepared to inform discussion among the participants at the first CBC agenda setting conference, scheduled for September 20, 2007. The paper is organized into three sections. The first is a definition of the problem; it defines in some detail the limited accountability and transparency that have characterized the New York State budget process in past years. The second section describes the progress made in addressing these problems during recent legislative sessions, focusing particularly on the 2007 session. The last section describes options that can be pursed in 2008 and subsequently to make even more substantial progress. The options are not all mutually exclusive, but they are relatively numerous.