Another Late Budget

Posted by NYPIRG on April 1, 2024 at 9:22 am

Whoever established the date for the beginning of New York State’s fiscal year must have had an ironic sense of humor.  April 1st is the first day of New York State’s fiscal year, meaning that it should be the day that a new budget is supposed to be in place.  The April Fool’s joke is that in modern times it almost never is.

Under New York State’s Constitution, the executive branch is required to submit a balanced budget to the Legislature usually in January.  Unlike the vast majority of states, New York’s fiscal year starts on April 1st – the earliest in the nation.  While that gives lawmakers only three short months to cobble together a state budget, for the vast majority of the decades that the requirement has been in place, budgets were set more or less on time.  It wasn’t until the mid-1980s that the fiscal “wheels” started to come off.

During the Mario Cuomo years (1980s and early 1990s), budget timeliness got progressively worse.  And it kept getting worse.  During the Pataki years (1994-2006), the late budgets grew later, one budget being adopted 133 days after the beginning of the fiscal year!

Chronically late budgets make a mess of the finances of local governments, which cannot develop responsible budgets when state aid is still up in the air; late budgets disrupt state services since agencies are not sure of funding levels; and late budgets fuel public cynicism about their own democracy.

When budgets have been late, it’s often due to a decision by one of the three top leaders – the governor, the Senate Majority Leader, or the Assembly Speaker – to hold up the budget as a way to derive some beneficial leverage in policy negotiations.  In addition, while the public outcry may have been loud, elected officials felt that there were no meaningful electoral consequences resulting from late budgets.

New York’s court system changed that with a decision in 2004 that gave the governor far more control over the budget process.  It wasn’t until the budget crisis in the aftermath of the financial meltdown of 2008-2009, (after a very late budget) that a governor chose to use those powers to drive the budget process.

It is now widely viewed that New York’s governor has outsized budgetary constitutional powers vis-à-vis the Legislature.  Former Governor Andrew Cuomo used that power to get approvals for on-time (or nearly on-time) state budgets.  That started to change toward the end of his tenure and the trend has worsened over the past four years, with last year’s budget being approved in early May.  

Add this year to that list.  The budget deadline came and went this weekend with no agreement.  Instead, lawmakers and the governor agreed last week to extend the current budget through April 4th, giving them another week to try to hammer out a budget deal.

Getting the budget done by April 1st is what Governor Hochul and state lawmakers are supposed to do.  The state budget is the centerpiece of the legislative session, the most important task that voters “hire” lawmakers to do when they cast their votes.  Failure to do so just feeds an increasingly cynical electorate’s assessment that Albany can’t get its work done like it’s supposed to.  In the real world, however, the impacts of a late budget – as long as it’s done within a week or so – are not significant.  As long as public employees get paid and agencies can do their work, the only real impact is that lawmakers will not get paid until the final budget deal is done.  As seen in the state’s past, the longer the budget fight goes the greater the impacts.  For example, late budgets can delay payments to those vendors – including nonprofit service providers – who have contracts with the state.

This year’s budget delay is tied to significant differences – some financial and some not – between the executive and legislative budget plans, particularly spending for education, Medicaid, and to encourage more affordable housing.  Last year it was Governor Hochul’s demands in the area of public safety that jammed up the budget process.  This year, housing policy might be the sticking point.  Whether a good or bad idea, the inclusion of a housing proposal in the budget will not be central to the finances of the state budget. 

But when it comes to state budgets, things can change very, very quickly.  Just when budget negotiations seem stalled, an hour later it accelerates toward conclusion. 

Unfortunately, all of those deals will be cut in secret.  By the time the public (and too often many rank-and-file legislators) finds out what the final product is, votes will have been taken and the new budget will be in the books.

No April Fool’s Joke:  It shouldn’t be this way. After all, it’s your money.  Until Albany changes its ways, New Yorkers should be on guard because the joke – such as it is – is on us.