Local Arts Advocacy: Tips and Tools

THE NEW YORK STATE BUDGET PROCESS

Overview
State Law requires the Governor to develop a "complete" plan of proposed spending and revenues available to support it (a "balanced budget"), and submits it to the Legislature with appropriation bills and other legislation required to carry out the recommendations. The documentation is thousands of pages long; there are often hundreds of budget bills. The budget process in New York is an "Executive Process," dominated by the Governor. After approval, the law requires the Governor to manage the budget through administrative actions during the fiscal year.

The State fiscal year is April 1-March 31. The "budget cycle" begins nine months earlier and continues until the expiration of the State Comptroller's authority to honor vouchers against the previous fiscal year's appropriations-about 27 months.

The Budget Cycle
1. Agency Budget Preparation (June-August)
The budget cycle begins in August when the Budget Director issues a policy memorandum-the "call letter"-to agency heads. The call letter outlines, in general terms, the Governor's priorities for the coming year, alerts the agency heads to expected fiscal constraints and informs agencies of the schedule for submitting requests to the Budget Division. The call letter is the official start of the budgetary process.

Preparation of the budget varies among agencies, reflecting their size, complexity and internal practice. Typically, budget development begins at the program or sub-departmental level, with staff preparing individual program requests guided by the call letter and following the instructions set forth by the Budget Division in a Budget Request Manual. The head of the agency or its top fiscal officer may hold internal hearings at which program managers outline their budgetary needs. By late August, the final program package is assembled, reviewed for consistency with the call letter and approved by the agency head.

2. Division of The Budget Review (August-December)
Following the schedule in the call letter, agencies submit budget requests to the Budget Division shortly after Labor Day, with copies provided to legislative fiscal committees. DOB examination units analyze the requests of agencies for whose budgets they are ultimately responsible. This continues to the end of October.

In November, the Budge Director conducts a series of constitutionally authorized "formal" budget hearings, giving agency heads an opportunity to present and discuss their budget requests and giving DOB staff and the Governor's office an "on-the-record" opportunity to raise critical questions on program accomplishments, policy issues, long-range requirements and priorities. As provided in the Constitution, representatives of the legislative fiscal committees may participate in the hearings.

To help achieve a timely progression of the budget process, the Legislature also meets with executive staff to discuss the economic outlook, revenue forecast, projected spending, the impact of state and federal statutes, and any other relevant matters.

Through late November and December, the Division's examiners transform agency requests into preliminary budget and personnel recommendations that are reviewed in detail with the Director. The staff also prepares the appropriation bills and other legislation required to carry out these recommendations. Concurrently, DOB staff is reassessing economic projections, investigating possible changes in the revenue structure, analyzing trends in Federal funding, and preparing the financial plan that describes and forecasts the State's fiscal condition. The financial plan is prepared both on a cash basis and according to generally accepted accounting principles (GAAP). By early December, the Budget Division will normally have completed this initial recommendation process on both the revenue and expenditure side. Budget staff then prepare the tables and the narrative (the "budget story") that accompany each agency budget, and the description and forecasts of individual revenue sources.

The Governor's Decisions (December-January)
The Governor and his immediate staff, who are also preparing the annual Message to the Legislature (the "State-of-the-State" message which the Governor presents to the Legislature when it convenes in January), are conversant with the budget throughout its development. The Governor is kept up-to-date on changing economic and revenue forecasts and makes sure that program priorities have been clearly understood and are reflected in the budget. Based on the most current reading of the economic and fiscal environment, the final Executive Budget recommendations are formulated in a series of meetings between the Budget Director and the Governor. These sessions focus on major issues and may lead to revisions in significant parts of agency budgets.

Legislative Action (January-March)
In mid-January---or, following a gubernatorial election year, by February 1-the Governor submits his Executive Budget to the Legislature, along with the related appropriations, revenue and other budget bills concerning State operations, aid to localities, capital projects and debt service. Within 10 days, the Budget Division provides a package of statistical information supporting the Executive Budget. A three-year financial projection and the State's capital plan are submitted within 30 days following submission of the Executive Budget.

The legislative fiscal committees---Senate Finance and Assembly Ways and Means---then analyze spending proposals and revenue estimates, holding public hearings on major programs and seeking further information from the staffs of the Budget Division and other State agencies.

The Legislature takes a number of steps in the brief time it has to view the budget:
· Subcommittees: Each house breaks up into cross-committee ad hoc subcommittees to study the budget and make recommendations on it.
· Revenue Review: Each house issues its own forecast of revenues. These are then examined and discussed until a consensus is achieved.
· Spending Review: Each house analyzes and studies the spending estimates. Like the revenue estimates, these are discussed and negotiated as part of the process.

Except for the budgets of the Legislature and the Judiciary, the Legislature may not alter an appropriation bill except to eliminate or reduce the amount of an item recommended therein. It may, however, add items separate and distinct from those included in the original bill submitted by the Governor.

The appropriation bills, except for those which add items or provide funds for the Legislature and Judiciary, become law without further action by the Governor. The Governor must approve or disapprove all or parts of the appropriation bills covering the Legislature and Judiciary and may disapprove items added to his original bill by exercising his line item veto.

As provided in the Constitution, the Legislature may override the Governor's veto by the vote of two-thirds of those elected to each house. The passage of the appropriation bills provides a legal foundation for the disbursement of funds during the new fiscal year.

Upon passage of the appropriation bills, the Legislature must issue a summary of changes to the budget, and indicate how projected disbursements will be balanced by projected receipts. The Legislature must also issue a report describing appropriation changes between the submitted and enacted budgets and their effect on employment levels.

Budget Execution (April-March)
At this point the budget process enters a new phase: budget execution. As a first step, the Budget Division prepares "certificates of allocation" informing the State Comptroller that accounts may be established as specified in the certificates and vouchers drawn against the accounts may be honored.

In addition, DOB keeps a close watch throughout the year on the flow of revenue and the pattern of expenditure against its projections, and incorporates these in quarterly updates of the financial plan which are provided to the Legislature, as required by law, in April, July, October, and January. These become the basis of financial management during the fiscal year, and may alert both the Governor and the Legislature to potential problems in maintaining budget balance as the State fiscal year unfolds.

The Alliance of New York State Arts Organizations has a long history as New York's primary service association for community based arts and cultural organizations. The Alliance provides leadership and vision, and delivers services, resources and tools that strengthen community cultural organizations. The Alliance monitors, informs and mobilizes the field on statewide and national issues affecting the arts and assists local arts agencies in building community support and developing effective grassroots public policy.ing community support and developing effective grassroots public policy.

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