In recent years, the New York State Legislature passed the budget before the April 1st deadline.
The credit for this progress belongs to Governor David Peterson who, in 2010, issued an unconventional ultimatum to the State Legislature that laid the groundwork for future budget negotiations between the Executive and Legislative branches of government.
New York’s Budget Process
In New York State, while the Legislature largely controls the drafting and passing of laws, the Executive has the authority to design and, once approved by the Legislature, implement the budget. This division of responsibility is termed executive budgeting, and is established in the State Constitution under Article VII.
Specifically, the governor has the power to:
1. Initiate budget negotiations by submitting an Executive Budget to the State Legislature, including the Executive’s own projections for spending and revenue.
2. Originate budget bills for executive branch agencies.
3. Veto any spending the Legislature added to the Executive Budget, though this veto can be overridden by a two-thirds majority in both houses.
4. Implement the enacted budget, which includes the ability to reduce the state workforce (though not to reduce spending on local assistance, which includes all aid to local governments, non-profits, and entitlement payments to individuals).
The Executive Budget, published mid-January (February 1st following a gubernatorial election), provides the basis for negotiations between the Legislature and Governor on spending and revenue. These negotiations must be concluded and a budget enacted by April 1st, the beginning of the new fiscal year in New York.
The following timeline summarizes this process.
Mid-January (February 1st following a gubernatorial election)
Governor submits the Executive Budget to the Legislature, which includes the Executive’s forecasts for spending and revenue, as well as all related appropriation, revenue, and budget bills.
Before March 1st
Legislature releases their own forecast of spending and revenue (if they fail to do so, the State Comptroller releases a binding forecast by March 5th).
Legislative committees convene to review budget, Legislature and Governor begin budget negotiations, State Comptroller publishes analysis of Executive Budget.
Before April 1st
Senate and Assembly pass compromise budget, amending Governor’s recommendations in the Executive Budget. Governor may veto individual appropriations, subject to a legislative override of two-thirds
Traditionally, when the Legislature and Governor failed to reach a compromise, negotiations carried over into the new fiscal year. Delaying the passing of a new budget gave State legislators a tactic for fighting unpopular program cuts or revenue increases proposed in the Executive Budget. Legislators could “wait out” the Governor, refusing to pass a budget until these measures were amended or removed.
As a result, few legislatures succeeded in passing a budget prior to the April 1st deadline. Between 1985 and 2004, not a single budget passed on-time. 2004 saw a record delay, with no budget passed until August 13th.
For two years following the 2004 debacle, budgets were enacted on the last day of March. However, this was followed by four years of late budgets.
The failure to enact a budget before the new fiscal year meant essential state services depended wholly on a week-to-week lifeline: temporary budget extenders, individual appropriations bills issued by the governor and approved by the Legislature. Without these weekly appropriations, government employees would go unpaid, Medicaid payments could not be disbursed, and key institutions like public schools would go without critical funding.
Yet the uncertainty of late budgets and temporary budget extenders ended abruptly in 2011, with the Legislature enacting the past three budgets not only on time, but progressively earlier.
So, why were the last three budgets on time?
In 2010, Governor Paterson set a new precedent, shifting the balance of power between the Legislature and the Governor on negotiating the budget.
Originally, the fiscal year 2010-2011 Executive Budget produced by Governor Paterson included painful cuts opposed by the Legislature, leading to delays in their enactment. On June 16th, with the Legislature over two months late in offering a final budget, Paterson delivered an ultimatum. He threatened to roll the entire proposed Executive Budget into a single temporary budget extender on June 28th if the Legislature failed to produce a budget with no borrowing. Legislators would then be faced with the stark decision of either:
A. Enacting the Governor’s budget unchanged, or
B. Rejecting the temporary funding extender, shutting down all government operations for which funding was not already in place, and waiting for the Governor to come to the table.
Why was Paterson able to deliver this ultimatum? There are two reasons. First, the public’s opinion of Legislature was poor, they and were unlikely to side with the Legislature in the event of a total government shutdown.
Yet the true power behind Paterson's threat rested with the no-alteration clause of the State Constitution and two New York Court of Appeals decisions, Pataki v. New York State Assembly and Silver v. Pataki (2004), both of which reaffirmed that the Legislature cannot amend the Governor’s appropriations under Article VII of the Constitution.
The no-alteration clause in Article VII states that:
The legislature may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein, but it may add thereto items of appropriation provided that such additions are stated separately and distinctly from the original items of the bill and refer each to a single object or purpose.
Thus, in Silver v. Pataki, Judge Robert Smith of the State Court of Appeals argued that:
If the Legislature disagrees with the Governor’s spending proposals, it is free, as the no-alteration clause provides, to reduce or eliminate them; it is also free to refuse to act on the Governor’s proposed legislation at all, thus forcing him to negotiate. But it cannot adopt a budget that substitutes its spending proposals for the Governor’s. If it could do so, executive budgeting would no longer exist.
With this decision, any hope legislators had of resisting the Governor’s budget agenda by amending his appropriations vanished.
Yet in 2010, the Legislature was again in gridlock. Governor Paterson, his authority enshrined in the Constitution and reaffirmed in the courts, realized that he could insert the same appropriations opposed by the legislature in their weekly lifelines, the temporary budget extenders.
In one budget extender, unpopular healthcare cuts accompanied critical funding to other state programs. This strategy culminated in the Governor’s June 28th ultimatum, where he threatened to issue his entire budget in one budget extender. The message was clear: no more budget extenders, no more lifelines, unless you accept my terms.
Overnight, the incentive for the Legislature to delay enacting a budget to get better terms from the Governor disappeared. Though the final 2010 budget did not pass until August 3rd, the Legislature came to the table, issuing two appropriations prior to Governor’s deadline.
A New Era of On-Time Budgets
For the past three years, the Legislature has succeeded in passing the budget prior to the start of the new fiscal year. While the Governor Cuomo’s popularity may be partly responsible for this development, it was Governor Paterson who eliminated legislators’ ability to simply wait for the Executive to see things their way. While a future scenario where the Legislature again chooses to delay enacting a budget is not impossible, it is unlikely. An on-time budget, once cause for celebration, may be the new norm.
§4. The legislature may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein, but it may add thereto items of appropriation provided that such additions are stated separately and distinctly from the original items of the bill and refer each to a single object or purpose. None of the restrictions of this section, however, shall apply to appropriations for the legislature or judiciary.
Such an appropriation bill shall when passed by both houses be a law immediately without further action by the governor, except that appropriations for the legislature and judiciary and separate items added to the governor's bills by the legislature shall be subject to approval of the governor as provided in section 7 of article IV.