STRANGELOVE IN ALBANY: HOW I LEARNED TO STOP WORRYING AND LOVE NY'S WILD & CRAZY PROGRESSIVE BUDGET
ANNUAL BUDGET ANARCHY IN ALBANY IS PROGRESSIVE DEMOCRACY IN ACTION
“No Comment,” Occupy Wall Street art show, Oct. 8, 2011. Photo credit: JB Nicholas.
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New York's state budget and how it's made has long been criticized.
Nothing more than a "collection of appropriations," is how Robert Caro characterized the decentralized 19th Century state budget in The Power Broker. Henry L. Stimson, FDR's future Secretary of War during World War II, found it produced "extravagance, waste and irresponsibility" in a 1915 report to the State Constitutional Convention. A blue ribbon commission charged with modernizing New York's bureaucracy in 1919 likened the state budget to a barrel of money spiked with spigots spitting cash.
Even after the budget process was regularized by specific amendments to the State Constitution that made the Governor accountable to the voters of the State as a whole—instead of legislators accountable to the voters in their districts alone—critics remained. Now it was "Byzantine," the New York State Legislative Commission on Government Administration charged in 1995. "No part of our state government is more difficult to understand."
And that was before it produced more than two decades of late budgets that bridged two centuries.
Even after Gov. Andrew Cuomo and State legislative leaders enacted four consecutive on-time budgets during his first term (and barely missed a fifth), critics remained. To these 21st Century critics, the state's budget wasn't right because it was seemingly controlled by "three men in a room." Governor Andrew Cuomo's "domination of the budget process" was also part of the problem, think tank Empire Center alleged in a 2020 report.
Given the importance of the budget to the state of New York, which has to be enacted every year, The Free Lance thought it would be a good idea to focus fresh and independent eyes on the budget process itself. Is that process—as prescribed in detail by the state constitution—really as bad as people allege?
Three men in a room. Photo credit: screengrab “Dr. Srangelove.”
Pre-Modern Budgeting
Like all legislation, state budgets originated in the legislature from New York's birth in 1777 until 1928. Finance committees in both houses reviewed budget requests "independent from one another, and without an overall statewide financial plan,” according to the State Division of the Budget.
"The role of the governor was limited to using political power to influence decision making and to exercise veto power," DOB says.
If that sounds messy, that's because it was. Here's how it sort of worked, as reported by Caro in The Power Broker:
The document that was called a state budget was actually a collection of appropriations drawn up by (legislative fiscal committee) chairmen. No legislator—or any other state official—reviewed the collection, balanced one appropriation against another, cut them down to agreed-upon necessities or measured them against estimated revenue.
Even after the document was formally printed, individual legislators continued to introduce their own ‘private’ bills, generally for pork barrel public works projects, which required public expenditures, and these, when passed, did not even appear in the ‘budget.’
No one bothered to add them up, so that, when the Legislature adjourned, no one could be sure how much money it had appropriated. The governor technically had the power to veto appropriations, but since state law forbade him to veto part of an appropriation item, legislators simply made sure that each debatable expenditure was lumped with one too essential to be vetoed.
Budget Modernization
Charles Evans Hughes was New York's 36th governor before he became the 11th chief justice of the Supreme Court. As governor, "Hughes started the conversation about the need for a strategic, enterprise‐wide Executive Budget process," the state budget division says.
There should be a "permanent method for comparative examination of departmental budgets and proposals for appropriations in advance of the legislative session," Hughes wrote in 1909. That way lawmakers "may be aided by preliminary investigation and report in determining, with just proportion, the amounts that can properly be allowed."
Henry L. Stimson as Secretary of War during the Battle for Rome, Italian Campaign, World War II, 1944. Photo credit: US Army.
Hughes's proposal for modern budgeting was taken up by Henry L. Stimson at New York's Constitutional Convention in 1915. The Republican political polymath was elected head of the finance committee and submitted a report calling for "Executive Budgeting."
The legislature was not the right part of Government to prepare the State's budget, his report concluded. Legislators did not operate the everyday Government: which largely acts through executive branch departments and agencies. Not only did legislators lack the required expertise to know what those departments and agencies actually needed to operate optimally, they were compromised by their accountability to voters in their own districts. They placed their constituents' needs above the needs of the state as a whole.
The solution, in Stimson's view, was to make the Governor accountable for the budget by giving him, not the Legislature, the duty to originate it. He explained: "We cannot expect economy in the future unless some one man will have to lie awake nights to accomplish it. The only way to stop waste is for the people of the State to know exactly whose fault it is if waste occurs, or if the cost of government steadily rises without compensating increase in service rendered.”
Stimson's proposal for Executive Budgeting was included in proposed amendments to the State Constitution in 1915 but the People rejected it. The reason, it appears, was the language of the public proposal. It was so complicated the average person was not sure what it meant and did not trust state lawmakers enough to vote for it even if they did.
“He Wants It Short and Simple”
by Jerry Costello. Photo credit: Historical Society of the New York Courts.
Progressive Budgeting
Stimson didn't accept defeat, and he had a powerful ally. Alfred E. Smith supported Executive Budgeting. The lifelong Lower East Sider was first elected New York's governor in 1918, lost his first bid for re-election, but was elected governor again in 1922, 1924, and 1926. Smith is one of New York's greatest governors. He believed in modernizing and Progressive reform including, for example, "redistribution of environmental wealth."
Among other things, Smith "reformed the insane asylums, created the state parks system, and undertook the distinctly unglamorous task of reorganizing the state bureaucracy, which functioned mainly as a collection of warring fiefdoms," New York Magazine reports."Three-quarters of a century later, the structure of state government in Albany remains very much his handiwork."
New Yorkers trusted Smith. With Smith's support, they approved Executive Budgeting in a constitutional amendment that took effect in 1927. Then Smith lost to Franklin Delano Roosevelt in the 1928 election. FDR submitted New York's first official executive budget to the legislature in 1929. It was Smith's. When the Legislature attempted to, in effect, take back its historic power over the budget, FDR sued them and won in New York's highest court, the Court of Appeals.
Though New York's Constitution was re-written in 1938 and amended dozens of times in the decades that followed, its budgeting mechanism remains largely the one Stillman proposed in 1915. In it, the Governor collects the necessary financial information from all the arms and agencies of Government, adds or substracts, and transmits a detailed budget document to the legislature. The legislature then operates as a critic of the proposed budget. It can subtract items from the Governor’s budget. It cannot add items—unless the Governor allows it.
That's why, every year, there has to be negotiations between the governor, assembly speaker and senate majority leader over what's in the budget. Negotiations have to happen somewhere. They usually happen in some kind of room. That's normal. Sometimes it takes awhile for everyone to reach an agreement—especially if different political parties are represented. That's normal too.
While the Constitutional budget language has remained largely the same since 1927, interpretation of that language has been tightened by successive decisions from the Court of Appeals.
FDR's 1929 legal victory over the legislature in New York’s highest court set the tone for a slow but sure expansion of executive authority over the budget. A 1993 decision from the Court of Appeals closed a loophole that allowed lawmakers to insert language into appropriation bills—sometimes with the governor’s tacit acquiescence. And its 2004 decision in Silver v. Pataki cemented the Governors’ unchecked power to designate appropriations as take-it-or-leave-it propositions that the legislature has zero power to modify, even slightly.
For example, Gov. George Pataki included in his proposed budget funds to build a prison in Franklin County. Legislators added money to ensure that space for rehabilitative programs was built into the prison. Pataki vetoed the added money and built the prison without the space, according to video of oral argument in the case.
That was OK, according to the Court of Appeals in Silver v. Pataki , because the legislature retained the power to refuse to fund the prison at all. It choose to fund it even after Gov. Pataki struck their addition of rehabilitative program space from the budget. It didn’t have to, but that’s how politics works. Basically, the court placed the legislature in the same crippled position the governor was in the pre-Modern, legislature-dominated, decentralized 19th Century budget system.
The Court realized it gave the Governor new power and recognized it needed to draw a bright, clear line around it. “But the judges did not do this, leaving the question 'for another day.' “
Sheldon Silver in handcuffs headed to his arraignment on Federal corruption charges, Jan. 22, 2015. Photo credit: JB Nicholas
Sheldon Silver, the Assembly Speaker who lost the lawsuit against Gov. Pataki, raised the alarm. The Court of Appeals’ decision handed "the governor inordinate control in the budget-making process," Silver said. Silver proposed constitutional amendments to "restore the balance of power between the executive and legislative branches and dramatically improve the state’s existing budget process."
Silver's proposed amendments would not have improved the budget process. Instead, they would have turned back the clock to the pre-Modern budget system dominated by the legislature and the interests of its members’ districts instead of the ship of state as a whole. The People soundly rejected them by a nearly 2-1 margin in 2005.
Former Gov. Mario M. Cuomo’s coffin draped with the state flag at his funeral, Jan. 6, 2015. Photo credit: JB Nicholas
Imperial Budgeting?
Gov. Andrew Cuomo pushed the new power the Court of Appeals gave the Executive Branch in Silver v. Pataki further.
"To a far greater extent than any of his predecessors, Governor Andrew Cuomo has included non-budget items” in the budget, a 2020 report by the Albany-based think tank Empire Center found. What did he use this new power to do? He raised the state-wide minimum wage to $15, legalized marijuana, reformed the state's grand jury system, banned plastic bags, expanded abortion rights and capped property taxes permanently.
None of that sounds bad to me. The only bad part is it sets a model for future governors to do things that do sound bad to me.
Former New York State Gov. Andrew Cuomo marches in the Columbus Day Parade as New York State Attorney General, Oct. 12, 2009. Photo Credit: JB Nicholas.
The Room Stays the Same
Cuomo resigned because of sexual harassment allegations and was replaced by his lieutenant governor, Kathy Hochul, in 2021. Hochul proved that even though there are two women and a black man negotiating the budget, they're still negotiating in a room, and that room is still closed to reporters, as Politico observed last April.
“I don’t negotiate in public,” was Gov. Hochul’s response to reporters’ questions. “This is a very normal budget process.”
Maybe this year they'll put a camera in the room and livestream it (with or without sound), just to show the public how boring all the normal is.
And that's how I learned to love the annual budget anarchy in Albany. It seems, to me, pretty close to the best we can do.
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One man not in a room. Photo credit: “Dr. Srangelove.”