Is the Budget Done?

Is the New York State Budget done, as Senate Democratic Conference Leader Sampson claims? (See here and here.)

Leader Sampson makes this claim despite the Senate's inability to pass a revenue bill.

Is he right? It depends on your point of view I suppose. Most things do these days.

But personally I'd say no.

Budgets require two things as a general rule: Money earned, money spent. As mentioned above, a key revenue bill remains un-passed, due to the public objections of Senator Stachowski and the less-public objections of Senator Thompson, Senator Foley, and Senator Breslin, who are holding out for some kind of change on how SUNY tuition works.

Senator Stachowski has become the public face of this particular battle, because he's the one actually stalling the revenue bill on this proposal's behalf. The other interested Senators appear to be willing to vote for the revenue bill and deal with SUNY tuition separately. Stachowski, however, is effect derailing the entire budget to deal with the SUNY tuition issue here and now.

So, no revenue bill. Yet, Conference Leader Sampson thinks the budget is “done.”

Is it? Frankly, I'm amazed someone so much as suggested that. The Capital Tonight article linked to above, and linked to again here, states that the Legislators aren't getting paid yet. Only a New York State Legislator could proclaim a job done when he is specifically having his paycheck withheld for not finishing that same job.

As far as I can tell the Governor's budget vetoes have knocked the State's budget back to the Governor's initial proposals, more or less, but the Governor's budget included some additional revenues. Anyone remember the “fat tax?” Even the Governor's austere budget needed that, along with other revenue items, or at least needed other revenue items to replace them. And, unless I've missed something, no replacements have passed. That's kind of what the revenue bill was about.

The State Comptroller has an “auditing” power under the State Constitution, and traditionally that power is used by the Comptroller to sound off on the State Budget in an annual report traditionally called the Review of the Enacted Budget. Sometimes the press refers to this report as the Comptroller “certifying” the budget.

The current Comptroller, Thomas DiNapoli, and at least one previous Comptroller, H. Carl McCall, have agreed that the Comptroller's “certification” of the budget is oft-exaggerated. Presumably, Comptrollers do not wish the political process to in effect assign their office responsibilities that they may lack the power to fulfill.

“There's a general conception,” Comptroller DiNapoli stated here,

“that I certify that the revenues are there, but that's beyond what we're called on to do," DiNapoli said. "The comptroller does not certify as to the validity of the budget appropriations and the presence of revenues. That's not a a power I have."

"Under New York law, we have a very limited role and it's limited to a determination that there are sufficient appropriations in budget bills for state operations and local assistance. That doesn't mean we make a decision that the revenues are there to back up those appropriations."

"The only certification is with repsect [sic] to whether they acted on budget bills so the legislative pay can happen."

The Comptroller is right, as far as I can tell. See Joseph Zimmerman's The Government and Politics of New York State 2008, pages 249-251, and Robert B. Ward's New York State Government 2006, pages 85-87.

While, the Comptroller may lack the power to actually block a badly-done budget that lacks revenues to back up the appropriations, surely the case this year, the Comptroller's Review of the Enacted Budget report has often not been shy about publicly taking the Governor and the Legislature to task for such budgets. To see what the reports look like, see the index of reports here.

Sometimes the Reviews are friendly. For examples, see the Reviews of the 2003-2004 and 1998-1999 enacted budgets.

Sometimes, though, the Reviews are less friendly. For example, the Review of the 2009-2010 budget in effect stated that the budget was technically balanced, but was on shaky ground, and was subject to the potential for mid-year changes. The Comptroller's office repeatedly warned of “structural imbalances.” The report opened with the following devastating lines:

The Enacted Budget for State Fiscal Year (SFY) 2009-10 clearly demonstrates the need for comprehensive fiscal reform. It relies on practices and patterns that result in poor fiscal outcomes over the long-term—recurring spending that outpaces recurring revenue, and the use of temporary revenues including federal stimulus funds to support ongoing costs. (Page 1)

The Review of the 2002-2003 enacted budget was similar.

While the budget as presented by the Division of the Budget is balanced it relies on fiscal gimmickry and dubious funding streams that may not materialize. (page 1)

Also very similar was the Review of the 1999-2000 enacted budget.

Most of the 1999-00 spending increases, when compared to the Executive Budget, are driven by current law and the legislative rejection of proposed cuts in education and Medicaid, rather than by program expansions. Even the large education aid increase was driven by the phase-in of multiyear programs and by general growth in current school aid formulas. The General Fund budget was balanced with virtually no spending cuts. (Page 1)

Also:

The level of non-recurring resources used in the enacted budget increases ten-fold from $64 million last year to nearly $600 million in 1999-00. This is particularly disturbing given the current robust economy. The use of significant one-time revenues to balance budgets was common practice during economic recessions. The use of non-recurring resources to fund ongoing spending exacerbates future budget imbalance. (Pages 1-2)

This year's budget, of course, from what we can tell from the press, leaves behind budget gimmickry and trickery for flat-out fantasy. The budget is so far from being done in any meaningful sense that the Legislators themselves aren't getting paid.

Is the budget done? No, it's not.

The Republican candidate for Comptroller, former hedge fund manager Harry Wilson, has called for Comptroller DiNapoli to not “certify” this year's budget. We've seen above that the Comptroller actually doesn't have the power to "certify" the budget per se. Wilson's implication that the Comptroller does have such a power reflects what might be a poor understanding on part of candidate Wilson of the office he seeks, and frankly makes me wonder about his hedge fund.

We've seen, though, that Comptrollers haven't been why about using the Review of the Enacted Budget report to highlight problems or issues in the State budget. As well they shouldn't be. New York State elects its Comptroller separately from the Governor for a reason, and that's to serve as a counter-weight. Comptrollers rarely have an electoral incentive to sugarcoat the budget review, certainly no more incentive than they have to sugarcoat their famous audits of State agencies and programs, even if the Comptroller and Governor are friendly. This year's Review should be an interesting read, and that's assuming the Comptroller even bothers to write one given the lack of a revenue bill.

One thing is clear, however, it's likely to be difficult politically for the Legislature to campaign on having accomplished a budget that a Comptroller they appointed to fill a vacancy in the office, and who is a former Legislator himself, doesn't feel comfortable signing off on. And, really, how could the Comptroller's Review this year be positive, especially with no revenue bill?

Is the budget done?

I'm amazed any State Legislator would say so. It's telling that Conference Leader Sampson, who as a lawyer employed by a law firm probably doesn't need his legislative salary, was the one to say it.