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State of New York November 8, 2005 Election
Proposition 1
Submission of Budget to Legislature by Governor
State of New York

Amendment to Articles IV and VII of the Constitution

See Also: Index of all Propositions

Information shown below: Yes/No Meaning | Arguments |

The proposed amendment to Articles IV and VII of the Constitution would change the process for enactment of the state budget by (a) providing for a contingency budget if the Legislature does not act on the Governor's appropriation bills before the start of the fiscal year; (b) placing limits on the amount of spending during such contingency period; (c) once such contingency period begins, eliminating the requirement that the Legislature act on the Governor's proposed appropriation bills, and instead authorizing the Legislature to end the contingency period by adopting a multiple appropriation bill making changes to the contingency budget, subject to line item veto by the Governor; and (d) authorizing the Legislature, subject to veto by the Governor, to modify the spending limits for future contingency budgets, except that such changes cannot take effect until three years after enactment. The proposed amendment also sets forth certain requirements for the operation of a fiscal stabilization reserve fund, from which money could be disbursed in a subsequent year. It would require estimates and information provided by state departments to the Governor for use in preparing the budget to be available to the public. It would provide a date certain by which the Governor must submit a budget and appropriation bills to the Legislature. It would reduce the time the Governor has to make changes to the budget and appropriation bills submitted to the Legislature without the Legislature's consent from thirty days to twenty-one days. Shall the proposed amendment be approved?

Meaning of Voting Yes/No
A YES vote on this measure means:
What will this amendment do if approved? Summary of changes which will occur as a result of the amendment and implementing legislation: (In addition to passing the Constitutional Amendment, the Legislature also passed legislation to implement the amendment. The implementing legislation will go into effect only if the Constitutional Amendment is passed by the voters.)

Fiscal Year + The legislation would change the start of the state fiscal year from April 1 to May 1. This would first apply to the state budget period starting April 1, 2006 and ending on April 30, 2007.

Early Budget Submission + The Constitutional Amendment would require earlier submission of the Executive budget, by January 15 (February 1 for a newly elected Governor) and shorten the amendment period from 30 days to 21 days to allow additional time for legislative review.

Contingency Budget + If a new budget is not adopted by May 1, provisions in both the implementing legislation (the Budget Reform Bill) and the Constitutional Amendment would require that the previous year's budget continue for the following fiscal year. This contingency budget would provide the same appropriations, re-appropriations, spending and revenue provisions as enacted for the preceding fiscal year, with exceptions that include: school aid, public assistance, state employee health insurance and pension costs, debt service and certain federal funds. Once in effect, the contingency budget will remain until the Legislature passes a multiple appropriation bill that alters it. If, after a contingency budget becomes effective, the Independent Budget Office projects that revenues are insufficient, uniform reductions will have to be made to ensure a balanced budget. Exceptions include school aid, as well as federally required programs such as public assistance, certain federal funds, and constitutionally mandated expenses such as state employee health insurance and pension costs and debt service.

Agency Budget Requests + The Constitutional Amendment requires that all agency budget request submissions be made public prior to the submission of the Executive budget.

Three-Year Financial Plan + The Budget Reform Bill requires a three-year projection by the Governor of the financial impact of any changes to the Executive budget.

Expanded Reserve Funds + Two reserve funds, equal to six percent, would be created to provide funds for May and June school aid payments, and to cushion against unexpected economic downturns, revenue shortfalls and natural disasters. Expanded reserve fund provisions are included in both the amendment and the bill.

Enhanced Fast Start + Under the Enhanced Fast Start plan, discussions between the Governor and the Legislature on forecasts of tax revenues, Medicaid disbursements, school aid disbursements and public assistance caseloads would begin on or before December 5 of each year.

Two-Year Education Funding + The Budget Reform Bill requires the Governor to include a two-year appropriation for aid to education in the Executive budget.

Health Care Reform in Budget + Beginning in the 2006-07 state fiscal year, the Budget Reform Bill would require the Executive budget to include all spending related to the Health Care Reform Act.

Independent Budget Office + The Budget Reform Bill creates an Independent Budget Office (IBO). The IBO would provide the Legislature with detailed information, including an annual economic and revenue forecast, a three-year fiscal outlook, quarterly reports on state revenues, and fiscal impact statements on proposed legislation. All reports of the IBO would be made available to the public. The Director of the IBO will be appointed jointly by the Speaker of the Assembly and the President Pro Tem of the Senate. The Director will serve a two-year term and have the authority to appoint personnel and procure services of experts and consultants as necessary.

Additional Financial Reporting + The budget reform plan would require additional detail and financial reporting in the Executive budget relating to the financial plan.

 
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Arguments For Proposition 1 Arguments Against Proposition 1
Proponents of the budget amendment say:
  • it would allow more time for discussion, debate and review of budget details;
  • it would put a contingency budget in place if legislators fail to agree on a budget by the beginning of the fiscal year, allowing the state to function normally;
  • it would allow school districts to better plan their budgets;
  • it would prevent shortfalls due to unexpected events such as economic downturns or natural disasters;
  • it would alter the power relationship between the Governor and Legislature to make it more like that found in the rest of the nation;
  • it would require more accountability from the Governor and allow more access to budget information; and
  • it would give the Legislature more of a say in the budget process.

Opponents to the budget amendment say:
  • it would disrupt state finances and return the state to costly borrowing practices because the fiscal year would end in a volatile revenue month, increasing the risk of year-end shortfalls;
  • it would reward legislators for refusing to enact an on-time budget, and would lead to even higher spending, taxes and debt;
  • it would dramatically tilt the budgetary powers in favor of the legislative branch, thus creating fiscal instability;
  • it would make the state's dysfunctional budget process worse; and
  • it contains no provisions to constrain the state's appetite for debt.


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Created: May 18, 2006 10:53 PDT
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