Could New York State Shutdown Too?
July 10th, 2006

New Yorkers love to dump on New Jersey, but this week, Albany officials should thank the Garden State for making New Yorks state government look good, despite its infamous dysfunction. The Garden States fiscal peril and government shutdown make Albanys late budgets and inaction seem less appalling, but could New York get stuck in such a position too? A fight over taxes triggered New Jerseys shutdown, and some warn that a duel in New York could incite similar tensions. New Jersey Governor Corzine ended the shutdown after he and the Legislature were able to agree on sale and property taxes, as well as other budget cuts, though Corzine will only sign off on the rest of the $30.9 billion budget after reviewing it. In New York, these negotiations are taken care of privately, thus preventing shutdown, but perhaps the threat of an actual shutdown from a Legislature and Governor that do not always agree would open up the process…almost violently.

Rather than suffering the inconvenience and shame of a shutdown, New York State always seems to eke out a budget and pass enough stop gap measures to keep services running. New York City came closest to a shutdown during the fiscal crisis of the 1970s. Accused by the federal government of handling its money like a heroin addict, the city pulled itself together through loans and oversight from the Financial Control Board, which continues to serve as a friendly probation officer even decades later. With the city generating so much of the states revenue, the state government took a hit as well, but did not have to shutdown.

Over the years, the Legislature and Governor have employed a variety of tools to solve budget tensions, such as leaving budgets unbalanced, borrowing money, parking debt outside the usual budget process in public authorities, and more. Reformers have advocated for measures to make state officials more responsible in budgeting, and with the 2006 election approaching, the Legislature, Governor and Comptroller are having a more public discussion about some of these policies. At the end of the session, the Legislature introduced a package of budget reforms intended to make budget negotiations more transparent and punctual. The Citizens Budget Commission analyzes and comments on the various proposals. Just a couple of days after the Legislature seemed to be taking specific steps to improve the budget process, the Albany Times Union sued the Legislature over its refusal to disclose the details of member item moneys and requests from the $200 million of assorted allocations Budget Cleanup bill, which made its way through the committees, floor and vote in just one day. The release of such information would expose the full details of which districts and local projects received which money at whose suggestion. The Legislature may be slow on reform, but demonstrated that it can be efficient when it wants to take care of its own, passing the multimillion dollar bill in one day. Twenty out of twenty one budgets have been late, but all eventually passed.
If the Legislature and Governor stall even longer, what is usually a late budget may turn into a budget. This selective expediting of bills and coordination between Legislature and Governor have staved off budget collapse in the past, but perhaps next Independence Day, New Yorkers might have to sweat out a shutdown, forcing legislators to skip BBQs and fireworks displays to hash out the budget.

By on July 10, 2006, 7:00 am
In category: Eye on Albany | 1 Comment »

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One Response to “Could New York State Shutdown Too?”

  1. Sydney Beveridge Says:
    July 12th, 2006 at 9:28 am

    Cara Matthews reports on July 11 in The Democrat & Chronicle ( that Pataki will veto the bill that aides characterize as “a transparent attempt to revive what the governor vetoed twice and the voters soundly rejected last November [in the budget ballot proposal].”

    Aides go on to cite the measures in the package which would shift some budgetary authority from the Governor to the Legislature, and not go far enough to create an truly Independent Budget Office or force conference committees.

    It’s not surprising that the Legislature and Governor try to reform one another rather than themselves and don’t like the results.

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