New York state”™s fiscal house is so chaotic, state leaders should appoint a financial control board to guide the budgeting process.
That is the recommendation of the New York State Association of Counties, a nonprofit organization that represents the 57 counties of New York and New York City.
“Fiscal projections are on the neon-red side and we need to pay attention,” said Mark LaVigne, communications director for NYSAC. “It”™s time we start coming to the table with solutions.”
NYSAC called for a state fiscal control board citing state Comptroller Thomas DiNapoli”™s report estimating that in the current budget cycle, all state revenues will be as much as $1 billion lower than estimates and all funds spending will be nearly $300 million higher. That is a cumulative budget gap of $1.3 billion to be closed by the end of the fiscal year March 31.
NYSAC also cited comptroller estimates of structural gaps in state spending, where planned expenditures already exceed expected revenue, saying that while spending is expected to reach $150 billion in 2012, revenues are expected to be $134 billion””a gap of $16 billion.
The board could not have authority of the sort New York City”™s financial control board appointed in 1975 by the state Legislature as the Big Apple teetered on the brink of bankruptcy. The financial control board was among the entities that returned the city to fiscal health by imposing and enforcing rules, using its clout as appointees of the Legislature to ensure compliance. But there is no governing authority that could tell the Legislature how to spend.
LaVigne said a high-profile financial control board even in an advisory capacity would garner enough clout to help solve Albany”™s budget problems.
“It would provide leaders with a nonpartisan opportunity for advice and incentive to make the difficult decision they have to date been unable to make,” LaVigne said. “They would be fiscal experts who could provide the guidance, the direction the path toward long term fiscal stability in New York.”
The governor or the Legislature could appoint such a body, he said, or they could work together in making appointments, citing President Obama”™s Deficit Commission which will help prod Congress toward painful measures. And just like with the Deficit Commission, he said, “Their recommendations could be ignored but that doesn”™t mean they wouldn”™t be right on the money.”
Frank Mauro, executive director of the state Fiscal Policy Institute, disagreed.
“In my view it”™s contrary to democracy to have some board of philosopher kings appointed to tell the elected Legislature what do,” Mauro said. He said the governor and Assembly and Senate have all the expertise they need, and could already call in experts if needed.
Mauro does agree the process needs repair. Both the NYSAC and the Fiscal Policy Institute agree a legislative version of the Congressional Budget Office should be created in New York, to provide a nonpartisan revenue and spending figure that the governor and committees in the Legislature would use in crafting a budget. Mauro also suggested the state push back its fiscal year from April 1 to July 1 each year, providing additional months for a budget to be created. He noted New York is alone among the 50 states to have such an early deadline, 46 states have a July 1 fiscal year start date and three have even later dates.
LaVigne said NYSAC agrees a later fiscal year “could help.” But whatever method is used, he said, the counties and state taxpayers cannot afford continuing dysfunction.
“This affects everyone. As counties we are tethered to the state budget because we deliver state programs at the county level and fund many of those programs.”
He said 90 percent of property taxes paid by county taxpayer”™s go to paying for state mandated programs.
“We need a solution for what has become a very dysfunctional budgeting process in New York,” LaVigne said. “And the financial control board is one solution we have put on the table.”
The governor”™s office and governor elect did not return calls for comment.
