A new report by the Rockefeller Institute of Government says the state has to reverse course on “fiscal gimmickry” that has led to years of structurally unbalanced budgets or face even worse financial crises in the future.
The report, “Hidden in Plain Sight: New York’s Unbalanced Budgets,” is the last in a series of papers written as part of Lt. Gov. Richard Ravitch’s initiative to improve budgeting and achieve structural balance. State law requires that revenues match spending in the General Fund — roughly 40 percent of receipts and expenditures each year — but does not mandate that the entire budget be balanced, according to the report. That has led to short-term fixes and larger long-term budget problems because gaps can be carried forward.
“The budget process described in this report is not a story of heroes and villains,” Ravitch said in a statement. “Instead, it is a case study in the political and fiscal urgency of the fact that the expenditures of many American states are rising faster than their recurring revenues. This structural budget imbalance in the states is a problem of the greatest importance, and I hope it will begin to receive the national attention that it deserves.”
During the past year, Ravitch has urged passage of legislation to change the budgeting process, set up multi-year financial planning that would require ongoing balance and creating an independent monitoring board.
“In many ways, the Lieutenant Governor’s proposal was ahead of its time,” Rockefeller Senior Fellow Carol O’Cleireacain said in the report. “A similar approach in the future may well benefit from this year’s exercise.”