April 1st, the first day of New York State’s fiscal year, came and went this weekend with no state budget agreement. It has been a few years since the state budget was approved on-time, with all recent ones enacted in the first half of April.
Getting the budget done by April 1st is what Governor Hochul and state lawmakers are supposed to do. 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.
In a sense, the real deadlines are tied to when public employees are supposed to be paid. If the budget is not signed into law this Monday, the state is prohibited from distributing paychecks to state workers, other than those agencies with different fiscal years or for those public employees who are not scheduled to be paid until later in the month.
There can be other impacts. For example, late budgets can delay payments to those vendors who have contracts with the state. In addition, legislators will have their paychecks withheld too.
New York’s history of getting budgets done on time has been lousy. From 1984 up until 2004, the governors and state lawmakers blew through budget deadlines. Some of those budgets were approved very late – sometimes months late.
Since then, things have improved. Due to court decisions that strengthened the hand of the governor, since around 2010, budgets have been approved on time or within a week or so of the April 1st deadline.
Ironically, late budgets are often the result of legislative fights over issues that have little to do with the budget. This year’s budget fight is no exception, with a key sticking point the governor’s demand for changes to the state’s recently enacted bail reforms as part of any budget agreement. The governor wants to give judges more discretion in setting bail for certain offenses. If lawmakers agreed to the governor’s plan, judges would be explicitly allowed to assess the threat they believe a defendant poses to the community and set bail on those grounds.
Whether that’s a good or bad idea, the governor’s proposal is not central to the finances of the state budget. Yet this year, like many, the entire budget is being held up over what is essentially a non-budget policy dispute.
And there are big budget items that are festering while this debate plays out. For example, how will state leaders pull together enough money to plug the M.T.A.’s expected budget gap of nearly $3 billion by 2025? Lawmakers have so far rejected the governor’s plan to raise transit costs for suburban areas and the New York City Mayor is opposing the governor’s proposal to take $500 million out of the city’s budget to support the M.T.A.
Another is the Legislature’s rejection of hiking tuition at the State University and City University of New York, as well as her proposed cuts to financial aid for college students.
Neither of these plans have been able to get resolved as long as the bail measure is still undecided. As the Albany saying goes, nothing gets done until everything gets done.
But when it comes to state budgets, things can change very, very quickly. When a budget plan may seem stalled, an hour later it accelerates toward conclusion.
Unless things change quickly, when a budget is late the governor and state lawmakers typically approve a short-term budget in order to keep government open; pass stopgap legislation to ensure that state employees are paid since the budget was not approved in time.
Meanwhile, all sorts of schemes can be hatched and deals can be cut. Governor Hochul, for example, reportedly is advancing a plan to weaken the state’s climate law. Individual lawmakers will be angling for more benefits to their communities.
And all of those deals will be cut in secret. By the time the public 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.