CITIZENSUNIONOFTHECITYOFNEWYORK STATEMENTOFPOSITION StateBudgetLanguageAllowingtheTransferofFunds March2012 GovernorCuomosExecutiveBudgetwasreleasedonJanuary17th,representingthefundingand policygoalsoftheGovernor.TheGovernorsproposedStateAppropriationsBill,A.9050/S.6250, containslanguagethathasraisedquestionsregardingtheamountofauthorityitwouldgrantthe Governortotransferfundsbetweenagenciesoramongprogramswithinaparticularagency.1 WhileCitizensUnionsupportseffortstocreateamoreefficientandeffectivestategovernment thatbetterservesNewYorkers,weopposethelanguageascurrentlydrafted,asweareconcerned thattheproposalascurrentlywrittendoesnotprovidesufficienttransparencyorstrikean appropriatebalanceofpower.WhileweareencouragedthattheAssemblyandSenateamended appropriationsbills,A.9050BandS.6250B,toremovetheoriginallanguageproposedby A.9050/S.6250,weurgethelegislatureandGovernortoexaminealternativemeansof implementingthegoalsofcreatinggreaterefficienciesinstategovernment.

t. Asummaryofourrecommendationsispresentedbelow,followedbybackgroundinformation regardingtheproposedbudgetlanguageandamoredetailedrationaleanddescriptionofthe recommendations. 1. Theproposedlanguageshouldberemovedfromthebudgetlegislation,andseparate legislationbedevelopedtoallowthegovernortoimplementconsolidationsrecommended bytheSAGECommissionortoimprovetheefficiencyofstategovernmentusingeitherof thesetwosuggestedmethods: a. Thegovernorshouldsubmitareorganizationplantothelegislature,similartowhatis requiredforthemayorundertheNewYorkCityCharter(Chapter1,Section11);or b. Thegovernorshouldberequiredtoseeklegislativeapprovalforinterchanges, transfersorsuballocationsoveracertainthreshold.Forexample,theNewYorkCity Charter(Chapter6,Section107)requiressuchbudgetmodificationstobeapprovedby theCityCounciliftheyaregreaterthan$50,000or5percentofanagencysbudget. 2. Legislativeapprovalshouldberequiredforalltransfersorsuballocationstopublic authorities,andpublicauthoritiesshouldcomplywiththereportingrequirementsofthe AuthoritiesBudgetOffice,whichincludeanannualbudgetreport.
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Availableat:http://publications.budget.ny.gov/eBudget1213/fy1213appropbills/StateOpsBudget.pdf CitizensUnionoftheCityofNewYork 299Broadway,Suite700NewYork,NY100071976 phone2122270342fax2122270345www.citizensunion.org PeterJ.W.Sherwin,ChairDickDadey,ExecutiveDirector

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ProposedStateBudgetLanguageRegardingTransferofFunds TheStateAppropriationsBill,A.9050/S.6250,containslanguageregardingthetransferoffundsby theexecutivebranchthathasnotbeenusedinpreviouscycles2,andislistedundereveryagency andprogram,repeatedhundredsoftimesinthebudgetlegislation: Notwithstandinganyotherprovisionoflawtothecontrary,forthepurposeof planning,developingand/orimplementingtheconsolidationofadministration, businessservices,procurement,informationtechnologyand/orotherfunctions sharedamongagenciestoimprovetheefficiencyandeffectivenessof governmentoperations,theamountsappropriatedhereinmaybe(i) interchangedwithoutlimit,(ii)transferredbetweenanyotherstateoperations appropriationswithinthisagencyortoanyotherstateoperationsappropriations ofanystatedepartment,agencyorpublicauthority,and/or(iii)suballocatedto anystatedepartment,agencyorpublicauthoritywiththeapprovalofthe directorofthebudgetwhoshallfilesuchapprovalwiththedepartmentofaudit andcontrolandcopiesthereofwiththechairmanofthesenatefinance committeeandthechairmanoftheassemblywaysandmeanscommittee. DifferentlanguageisprovidedforthebudgetsoftheDepartmentofLawandtheDepartmentof AuditandControl,whichareheadedbytheattorneygeneralandstatecomptroller,respectively. Thislanguagehasbeenpresentinpreviousbudgetcycles,andallowstheattorneygeneralor comptrollertotransferfundsamongprogramswithintheiragencies,butwouldnotallowthe governortoraidfundsfromtheseindependentelectedofficialsbudgets.Thelanguagefor appropriationstotheDepartmentofLawisbelowasanexample.

I.

Notwithstandinganylawtothecontrary,theamountshereinappropriatedmay beinterchangedortransferredwithoutlimittoanyotherappropriationinany otherprogramorfundwithinthedepartmentoflaw,withtheapprovalofthe directorofthebudget. II. SAGECommissionRecommendations

TheSAGECommissionmaderecommendationsinfourbroadareas:organizationalstreamlining, operationalimprovements,buildingacultureofperformanceandaccountability,andfocuson coremission.Eachofthesetopicshasanumberofrecommendations,somerelatingtocivil service,andsomerelatedtotechnology.Asummaryoftherecommendationsinthesecategories isbelow.

Eligon,John.BudgetProvisionRaisesConcernsOverCuomosReach.TheNewYorkTimes.January19,2012. Availableat:http://www.nytimes.com/2012/01/20/nyregion/budgetprovisionraisesworriesaboutcuomos reach.html
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OrganizationalStreamlining TransportationMergersMergetheBridgeAuthorityintheThruwayauthority;combine functionsand/orsharedservicesbetweenDepartmentofTransportation(DOT)andnew Thruway/BridgeAuthority;combineDOTandThruway/Bridgeleadershipteams BusinessServicesCenterMovetowardStatewideEnterpriseSharedServices;establish HumanResourcesServicesUnitywithinOfficeofGeneralServices(OGS)asfirststep towardBusinessServicesCenter; WorkforceDevelopmentEstablishsystemwideandstandardizedperformancemetrics; reorganizeStateWorkforceInvestmentBoardtoserveasworkforcedevelopment coordinatorstatewide; OperationalImprovements InnovationFundCreatededicatedInnovationFundtofinanceBusinessProcessRedesign andefficiencycreatingtechnologyprojects;expandEnterpriseServicesProject ManagementOfficetomanageInnovationFundprojects LeanManagementHiretwoLeanManagementprofessionalstoestablishanOffice ofLeanManagementforNYS. EnergyEfficiencyDevelopmasterplantoimplementefficiencyupgradesinstate facilities;financeprojectsusingStatesupporteddebt,drawingonresourcesoftheNew YorkPowerAuthority,theEnvironmentalFacilitiesCorporation,NewYorkStateEnergyand ResearchDevelopmentAuthority,orotherStateentities. BuildingaCultureofPerformanceandAccountability PerformanceManagementSystemDeployaperformancemanagementsystem;createa dedicatedperformanceunitwithDivisionoftheBudgetorExecutiveChambertomaintain system. WorkforceModernizationPursuecivilservicereformsthatfacilitateentryofmidlevel professionalsintotheCivilService;implementcomputerizedtestingsolutionatDivisionof CommunityServices;developprogramstoencouragetalentedyouthandminoritiestojoin workforce. FocusonCoreMission MoreEfficientUseofStateCapitalIncreaseamountofcapitalavailableforaffordable housingbyusingreinsurancetofreeupcapital.

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III.

CityCouncilAuthorityOverModifications

TheNewYorkCityCharterprovidestwomechanismsthatCitizensUnionexaminedwhichcould allowthegovernortoimplementtheSAGECommissionrecommendationsorcreateother efficiencies.ItshouldbenotedthattheNewYorkCitybudgetprocessisgenerallyseenasheavily centralized,withthemayorhavingsignificantauthority,andyettheseprovisionsprovidegreater transparencyandarolefortheCityCouncilinapprovingbudgettransfers. ThereiscurrentlyintheCityCharter(Chapter6,Section107(b))aminimumthresholdof5percent ofagencyspendingor$50,000,whicheverisgreater,forthetransfertobeconsideredabudget modificationandtriggernotificationofthecouncil.TheCouncilisresponsibleforapprovingor rejectingmodificationstothebudgetthroughoutthefiscalyear.3Beforethecouncilvotesona proposedbudgetmodification,themodificationmustbeaccompanied,onaseparateform,bya fiscalimpactstatementpreparedbythefinancedivisionoftheCouncil.4Thesemodificationsare requiredasnewspendingneedsarise,delaysinimplementingprogramsoccur,andrevenues exceedorfallbelowexpectations.5However,theCityCharterdoesallowthemayorto implementexpenditurereductionsafterthefinaladoptionofthebudgetinanefforttomaintain abalancedbudget.6 TheCityCharterinChapter1,Section11alsospecifiesthatthemayorcanreorganizeanyagency underhisorherjurisdiction,includingtransferringfunctionsfromoneagencytoanother;creating newagencies;eliminatingexistingagencies;andconsolidatingormergingagenciestoachieve effectiveandefficientfunctioningandmanagementofcitygovernment,butanyactioninthis regardisaconsidereda"reorganizationplan"thatmustbepublishedintheCityRecord.The mayorisalsorequiredtosendacopyofthereorganizationplantotheCityCouncilifitinvolvesa changetotheCityCharteroranagencycreatedbyexecutiveorder,andtheCouncilthenapproves ordisapprovesofthereorganizationplanviaresolution.Anychangesthatwouldrequirevoter approvalwouldnotbeallowedbythereorganizationplan,andtheplancannotincludechangesto boardsorcommissioncreatedundertheCityCharter.
UnderstandingNewYorkCitysBudget:AGuideIndependentBudgetOffice.Availableat: http://www.ibo.nyc.ny.us/iboreports/IBO_BG05_web.pdf.P.4. 4 RulesoftheCouncil.Availableat:http://www.council.nyc.gov/html/about/files/council_rules_2009_11.pdf 5 Lowenstein,Ronnie.FollowtheMoney.GothamGazette.Availableat: http://www.gothamgazette.com/commentary/73.lowenstein.shtml 6 AbouttheCityCouncil:BudgetProcessandCalendarhttp://council.nyc.gov/html/about/budget.shtml
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IV. CitizensUnionDetailedRecommendations CitizensUnioninits2008IssueBriefandPositionStatementonStateBudgetReform7 recommendedlimitingtheabilityofthegovernortoenactormodifythetermsandconditions regardinguseofresourcesinappropriationbillsbyrequiringthatsuchbillsbeconsistentwith eitherexistinglaworchangespresentedinseparatelegislation.Consistentwiththisposition, CitizensUnionopposesthecurrentlanguageintheproposedstateappropriationsbudgetwhich wouldallowthegovernortotransfer,interchangeorsuballocatefundsbetweenorwithin agenciesandpublicauthoritiesinordertoconsolidategovernmentprogramsoragenciesasitis notconsistentwithanappropriatebalanceofpowerbetweentheexecutiveandlegislative branches. Theproposedlanguageinthestateappropriationslegislationshouldberemoved,andseparate legislationshouldbeconsideredtoprovideamechanismforthegovernortoconsolidate administrativefunctionstoimprovetheefficiencyofgovernment,whileensuringtransparency andanappropriateroleforthestatelegislature.WhileweareencouragedthattheAssemblyand SenateamendedappropriationsbillsA.9050BandS.6250Bremovethelanguageproposedby A.9050/S.6250,weurgetheLegislatureandGovernortoexaminealternativemeansof implementingthegoalsofcreatinggreaterefficienciesinstategovernment.Our recommendationsinthisareaarebelow. 1. Separatelegislationshouldbedevelopedtoallowthegovernortoimplementconsolidations recommendedbytheSAGECommissionortoimprovetheefficiencyofstategovernment, usingeitherofthetwosuggestedmethods: a. Thegovernorshouldsubmitareorganizationplantothelegislature,similartowhatis requiredforthemayorundertheNewYorkCityCharter(Chapter1,Section11),which wouldbepostedintheStateRegister,ifchangesinvolvedstateagenciescreatedviathe StateConstitution,statestatuteorexecutiveorder.Theplanwouldthenbesubjectto approvalbythelegislature;however,itwouldgointoeffectifthelegislaturefailstoact. Thismechanismwouldbothcreategreatertransparencyandensurethatthelegislature maintainsitsroleinthestatebudgetprocess;or b. Thegovernorshouldberequiredtoseeklegislativeapprovalforinterchanges,transfersor suballocationsoveracertainthreshold.Forexample,theNewYorkCityCharter(Chapter 6,Section107)requiressuchbudgetmodificationstobeapprovedbytheCityCouncilif theyaregreaterthan$50,000or5percentofanagencysbudget).Theapprovalrequires themayortosubmitafiscalimpactstatementtotheCityCouncildetailingthespecific reasonsforthemodification.Whileweareuncertainofwhatthespecificthresholdshould beforlegislativeapprovalatthestatelevel,webelievethatthismechanismwouldallow forgreatertransparencyandmaintainthelegislaturesroleinthebudgetprocess. CitizensUnioninits2008IssueBriefalsosupportedrequiringthegovernorsbudgetpresentation toincludeacompleteandclearfinancialpictureofstateoperationsandfiscalresponsibilities,
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Availableat:http://www.citizensunion.org/www/cu/site/hosting/issuebriefs/2008ib_statebudgetreform.pdf

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includingthoseofpublicauthorities.Whilerecentreformshaverequiredgreaterdisclosureof publicauthoritiesbudgets,suchastotheAuthoritiesBudgetOffice(ABO),theaccountabilityof publicauthoritiesremainsasignificantchallenge.Indeed,theABOonJanuary27,2012 admonishednearlytwohundredstateandlocalpublicauthorities,localdevelopmentcorporations andindustrialdevelopmentauthoritiesforfailuretosubmitrequiredbudgetreports.8 Giventhelackofdisclosureofpublicauthoritiesparticularthosewhichareoffbudget, meaningtheirfundingandprogramshavenotbeenapprovedbythelegislatureCitizensUnionis particularlyconcernedabouttheproposedstatebudgetlanguageandtheabilitytotransferfunds tounaccountablepublicauthorities.Wethereforerecommendthefollowing: 2. Legislativeapprovalshouldberequiredforalltransfersorsuballocationstopublicauthorities, andpublicauthoritiesshouldcomplywiththereportingrequirementsoftheAuthorities BudgetOffice,whichincludeanannualbudgetreport.

NewYorkStateAuthoritiesBudgetOffice,PublicAuthoritiesthathavefailedtofilerequiredreports,January27, 2012.http://www.abo.ny.gov/reports/January2012DelinquentList.pdf