Report State Budget

Reform in New York

The Budget, The Legislature, and the Governance Process

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November 09, 2003

New York once prided itself as being a leader in governance among the states. Now mediocrity is the norm. One 50 state study is particularly revealing. In 2001 Governing Magazine, in collaboration with the Maxwell School of Syracuse University, graded the states in five key areas of government performance – Fiscal Management, Capital Management, Human Resources, Managing for Results, and Information Technology. New York got a "C+" average, and no grade higher than a "B."

New York's persistent fiscal difficulties have led to calls for reform. One set of proposals focuses directly upon the states budgetary processes. One idea is to shift the beginning of the fiscal year to July 1, the practice in 46 states, to allow the legislature more time to consider the executive budget proposal (and to have better information about actual income tax collections, due April 15). A second is to establish an authoritative – and perhaps politically disinterested – consensus process for revenue estimating. A third calls for a staged, more inclusive process for legislator participation in budgetary decision making, including the use of conference committees to resolve inter-house differences.

And there are others. A second approach to reform, the one taken here, treats the budget process as the state's core political activity – the authoritative acquisition and allocation of scarce resources. It begins from an understanding that, major executive/legislative conflict notwithstanding, the state budget process worked reasonably well from its inception in 1929 until about a quarter of a century ago. It assumes that manifestations of stress in the budget process are indications of underlying institutional change. It thus seeks explanations for persistent deadlock in budgeting in a disjunction – between the political and structural assumptions that underlay the budget process as enshrined in the state constitution in 1929 on the one hand, and the contemporary workings of the state's political and governmental systems on the other. It concludes, therefore, that reform of the budget process is needed but insufficient to achieve fiscally responsible, responsive governance in New York State.

This document provided background for the Citizens Budget Commission’s conference and report “Fixing New York State’s Fiscal Practices” on November 13 and 14, 2003. The conference brought together public officials, business and labor leaders, civic leaders, academic experts. and media representatives to identify actions to “fix” the fiscal practices of New York State.

The conference and related materials were made possible by generous support from the New York Community Trust, Rockefeller Foundation, Nathan Cummings Foundation, Josiah Macy, Jr. Foundation, Cheryl Cohen Effron and Blair Effron, and Philip Milstein.

Download the Background Paper

Reform in New York

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The Palisades Principles Revisited