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June 13, 2005

‘Runway spending’ amendment imperils economy, taxpayers

The proposed constitutional amendment to “reform” the budget process is a serious threat to the stable operation of New York’s state government and to its taxpayers, David F. Shaffer, president of the Public Policy Institute, argued at a Rockefeller Institute forum on the proposal.

“In the one state that needs fiscal restraint the most, this amendment would give control over spending to the arm of the government that is the least inclined to exercise it,” Shaffer said at the June 3 event in Albany. “It will lead to runaway spending, debt and taxes. It is the ‘runaway budget amendment,’ and it must be defeated.”

The Institute is the research affiliate of The Business Council. The Council’s board voted in May to oppose the amendment.

State legislators first approved the amendment last year when they were delaying passage of a budget, arguing that the amendment would help ensure an on-time budget, Shaffer said. “But this year, they passed the budget on time, without final adoption of this supposedly necessary amendment,” he added.

The amendment would delay until May 1 the start of the fiscal year, require the state to craft a two-year school-aid budget, let a contingency budget automatically kick in if the May 1 deadline is not met, and enable the state legislature to draft its own appropriation bills after May 1 if a budget is not agreed upon.

This effectively gives legislators an incentive not to craft a budget on time because power in the process would move to them after May 1, Shaffer noted.

This amendment would destroy the prime institutional restraint on New York’s budget process. This, Shaffer argued, hurting taxpayers and the economy and population.

The proposed amendment amounts to a kind of coup d’etat by the bipartisan party of high spending, high taxes, high debt, ever-growing budget gaps, and ever-deepening conflicts over spending promises that have been made but cannot be kept, Shaffer said.

“The Legislature would not be required to adopt a balanced budget,” Shaffer said. “In fact, it wouldn’t even be required to add up its appropriations bills to see what the total is.”

With new dominance in the budget process, legislators would inevitably spend more. Their constituents typically demand that they send money home. Only the executive branch is expected “to stay awake at night” worrying about how the whole package adds up, Shaffer added.

"That’s why the framers of the state Constitution chose the governor to submit a balanced budget and why the governor controls changes to formulas and entitlements that drive spending. That’s why the framers gave the Governor the power to line-item veto legislative additions to the budget,” Shaffer said. “Every one of those safeguards is ripped away by this amendment.”