June 2002

When Inefficiency Becomes the Status Quo

Point of fact: Not once in the last 18 years has the New York State legislature completed the budget on time. That means that we now have high school graduates and eligible voters helping elect or reelect (the vast majority of the state’s elected officials do get reelected) legislators without ever having seen them fulfill their basic responsibility of passing the state budget on the schedule mandated by the New York State Constitution.

Although the state’s fiscal year begins on April 1, the actual budget cycle begins nine months earlier, as each part of the government compiles its revenue and expense budget for the ensuing fiscal year. For example, the revenue and expense budgets for fiscal year 2003/04 were set and approved during March and April of this year. Therefore, when the legislature passes a late budget, they are using old numbers—not a prescription for effective government.

But there’s more. Operating the state without an approved budget affects everyone in the state, because state-funded organizations and services that rely to any degree on state and local government funding cannot reliably budget or plan their programs and services without knowing the state’s budget for their sector. For example, the school year officially starts on July 1, and when that date rolls around with the budget still up in the air, the education system, New York City, and many other local governments must begin the new year not knowing their budgets. In the education system, I have no doubt that this pattern even has a subtle psychological affect on students’ attitudes; over time, their perspective on the importance of deadlines becomes skewed by this apparently blasé attitude from the state government.

To say that this lack of stewardship is perpetuated by an apparently disinterested public is only to state the obvious. But it doesn’t need to be this way. Amazing things happen when citizens en masse refuse to accept legislators’ not doing their job. For example, in Pennsylvania in 1978, the state passed a deficit budget, state employees were hit with payless days, and the Speaker of the House resigned. More incumbents were defeated in that year’s election than any other in the state’s history.

New York’s situation doesn’t approach that mess, but I am concerned when inefficiency becomes so commonplace that we accept it as the status quo. CPAs should care greatly, because this recurring problem amounts to abnegation of fiscal responsibility on the part of the state legislature, and greater fiscal responsibility is the CPA’s reason for existence.

Maybe the time has come for New York CPAs—a community skilled in financial matters—to light a fire under its state legislators and tell them to make completing the budget on time a top priority.

If you have an opinion or suggestion on any part of this issue, write or e-mail me with your thoughts.

Louis Grumet
Publisher, The CPA Journal
Executive Director, NYSSCPA

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