March 9, 2004
Top fiscal watchdog group proposes sweeping budget reform
A prominent New York State watchdog group has urged lawmakers to adopt 10 key budget changes that would reform the budget process and improve the state's fiscal prudence.
The Citizens Budget Commission (CBC) said its 10 budget reforms, which it dubbed "the Palisades Principles," are "more comprehensive than any proposed by state leaders so far."
"The budget is incomprehensible to the lay citizenry; the process is impenetrable even to most legislators; and the end result is unchecked spending, excessive debt, and burdensome unfunded requirements on local governments," CBC said in a release.
"New York's local tax burden remains the worst in the country; New York's credit rating is among the lowest in the nation. These 10 reforms are crucial to achieving better fiscal practices."
Under the 10 proposed reforms, New York State would:
- Strengthen the financial accountability of public authorities.
- Assume the local governments' share of Medicaid costs.
- Eliminate "off budget" accounts. The CBC report noted that off-budget accounting has increased significantly in recent years, and that the state's Health Care Reform Act (HCRA) of 1996 and its revisions, by themselves, have created accounts involving about $1.7 billion in off-budget spending.
- Require a four-year financial plan with quarterly updates.
- Authorize a larger "rainy day" fund.
- Require performance assessment of state expenditures.
- Prepare a version of the budget in clear language understandable by the lay citizenry.
- Base its budget on revenue estimates arrived at through "consensus" techniques.
- Balance the budget in accord with Generally Accepted Accounting Principles.
- Strengthen the legislative committee process.
The proposed reforms emerged from a two-day conference CBC organized last December.
For details on the proposals, visit www.cbcny.org.