Legislation bottlenecked by fiscal fights
Action snarled in Albany over state budget, pension
By SHERRY HALBROOK
State legislative leaders and the governor continue to wrangle over what to do about a court order to put more state aid into poor school districts, especially in New York City.
At this writing in mid-June, no state budget bills have been adopted, although powerful lawmakers have pledged their support for restoring funds to the budget to keep several state prisons and other programs open.
Reform budget process?
The Legislature has passed a bill to change the start of the state’s fiscal year from April 1 to May 1, and to authorize a contingency state budget to automatically take effect on May 1 in any year when a new budget has not been enacted. Essentially, the contingency budget would roll the previous year’s budget forward, unless that would create a budget shortfall. In that case, certain obligations, such as payments on the state’s debt, would go forward while some other spending for state operations and aid to localities would have to be reduced to make up for the shortfall.
Because the state constitution would have to be amended to make these changes in the fundamental fiscal process, the same bill that passed this year would have to pass both the Senate and Assembly again next year, be signed by the governor and then put to the voters on their November 2005 ballot.
However, even the 2004 legislative support for this change may be faltering, since only the Senate has passed the necessary enabling legislation. The Assembly, which was expected to pass it, decided to take a closer look at the plan after questions were raised by hospitals and hospital workers’ unions about how health care might suffer under a contingency budget.
Money tops pension issues
On the subject of state pensions, PEF has lined up with the state comptroller in opposing the governor’s plan for holding down the level of payments public employers must make to maintain the state pension fund after sharp downturns in the economy and stock market undercut the fund’s investment revenues.
But the governor and comptroller are still far apart on this issue and its resolution in the Legislature seems to be caught in the overall budget bottleneck, according to PEF Legislative Director Brian Curran.
“It looks like the legislators will deal with this pension issue as part of an overall budget agreement,” Curran said.
Although he has been leading the union’s lobbying efforts on several bills to create more equity among the pension tiers, Curran said it is a steep uphill battle to get lawmakers to be more generous with state pensions while the fund is so financially strapped.
Most of the important legislative issues are unresolved as this issue of The Communicator goes to press. Meanwhile, the legislative calendar calls for the session to end June 22 — a deadline lawmakers have had to set aside in some previous years. And the court has set a deadline of July 30 for the state to come up with a new school aid plan. If the Legislature and governor fail to produce one by that deadline, the court could take it out of their hands.
Check the PEF Information Line (1-800-443-2445) pef.org
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The
Communicator July/August 04
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