New York Capitol, Albany (Photo: LennonsGhost/iStockphoto.com)

During the decade that Gov. Andrew Cuomo has been in office, he has used the budget process to expand executive branch authority and to muscle through highly controversial policy measures unrelated to appropriations. While the governor's inclusion of such non-budgetary legislation in his annual budget bills has become the new normal in Albany, it is glaringly unconstitutional, and bold steps must now be taken to contain his abuse of executive power.

History of the Executive Budget

Until 1927, all budget legislation in New York, like other legislation, originated with the legislature. The governor's only power over budget legislation was the veto, which the legislature could overturn by a two-thirds vote.

Concerned that legislators were preparing budgets loaded with pork barrel projects benefitting their own districts, a state constitutional revision committee argued that the legislature was not the right body to prepare a budget, and that the governor should have the duty to originate it. This committee conceived of the governor as the "constructor" of the budget, and the legislature as its "critic."

In 1926, voters approved a constitutional amendment that officially transferred the budget-making authority to the executive.

Constitutional Provisions

Under Article VII, §3 of the State Constitution, the governor must submit, along with the budget, bills containing all of the proposed appropriations and other non-appropriation legislation to put the budget into effect.

Section 4 forbids the legislature from altering any language in an appropriation bill except to "strike out or reduce" any of the governor's appropriations. While this section also allows the legislature to add items of appropriations for any purpose, it is allowed to do so only if the additions are for something other than the items stricken out. As the Court of Appeals stated in a 1939 case called People v. Tremaine, "the items thus proposed by the legislature are to be additions, not merely substitutions."

According to a 1982 NYS Attorney General guidance memo, if the legislature disagrees with the Governor's spending proposals, §4 provides it with three choices: (1) it can reduce the dollar amount of an appropriation; (2) it can strike out an item of appropriation entirely; or (3) or it can refuse to enact the proposed legislation until the offending material is removed, thus forcing the governor to negotiate.

Once passed, budget bills become law without any further act of the governor.

'Silver v. Pataki'

Over the last 25 years, the courts have interpreted §4 in a way that has vested the governor with outsize power. These decisions have allowed Gov. Cuomo to use the executive budget process to circumvent the legislative process to enact his favored policies into law.

In 1998, then-Governor Pataki proposed, and the legislature passed, an appropriation of $180 million to build a prison in Franklin County. Soon after, the legislature passed a separate bill providing that the funds would be available only when authorized by later legislation and that the prison must contain a separate building "suitable for educational, vocational, recreational and other inmate activities."

The governor claimed that the legislature's subsequent actions altered his appropriation bills in violation of §4.

In Silver v. Pataki, the New York State Court of Appeals—New York's highest tribunal—agreed with the governor, holding that, under §4, the legislature cannot constitutionally enact subsequent legislation that alters the purposes for, or the conditions upon which, the money in the appropriation bills can be spent.

"If the governor's appropriation bills appropriated money for a prison, subsequent legislation could not strike out the word 'prison' and substitute the words 'football stadium.'" Similarly, the legislature is forbidden from "mak[ing] changes of narrower scope—to change, for example 'prison in Syracuse' to 'prison in New York City.'"

'Pataki v. New York State Assembly'

In 2001, certain of the appropriation bills submitted by Governor Pataki contained provisions which, according to the legislature, did not belong in appropriation bills. For example, in one, he included not just the total amount of money being appropriated for public school education aid, but also his formula determining how much money would go to each school district. In another, he appropriated funds to a non-existent "Office of Cultural Resources" to oversee the state museum and state library. The legislature had previously rejected legislation creating this agency.

The legislature deleted from some of the governor's appropriation bills the language it considered improper. In others, it struck whole items of appropriation, and then enacted its own appropriation bills, appropriating identical amounts of money for similar purposes, but subject to different conditions and restrictions.

Governor Pataki challenged the legislature's actions in court, claiming they altered the language of his appropriation bills in violation of Article VII, §4 of the NYS Constitution. He argued that the legislature was limited to either accepting his conditions, or refusing to fund the public schools the Museum and Library altogether.

The legislature argued that these were not, in fact, appropriation bills at all and therefore were not protected by the no-alteration clause.

A plurality of the court recognized that the governor's power under the executive budget system was "susceptible to abuse" because a governor could insert non-budgetary legislation into what he labeled an "appropriation bill" and claim protection by the no-alteration clause. The court acknowledged that the line between budgetary and non-budgetary legislation is "difficult to fix," but found that the legislation at issue had not crossed that line. The court therefore sided with the governor.

The plurality dodged answering what is to be done when a governor includes non-budgetary legislation in an appropriation bill, choosing to "leave for another day" that question.

Judge Greenblatt's Concurring Opinion

In a scholarly concurrence, Judges Rosenblatt, joined by Judge G.B. Smith, articulated several factors to consider in determining whether non-budgetary legislation included an appropriation bill "impermissibly trenches on the legislature's role."

First, "the more an appropriation actively alters or impairs the State's statutes and decisional law, the more it is outside the governor's budgetary domain."

Second, "as an item exceeds a simple identification of a sum of money along with a brief statement of purpose and a recipient, it takes on a more legislative character. And, when the specifics describing an appropriation "transform an appropriation into proposals for programs, they poach on powers reserved for the legislature."

Third, "the more a provision affects the structure or organization of government, the more it intrudes on the legislature's realm." The executive budget process contemplates funding state programs and agencies, "not organizing or reorganizing" them.

Finally, "the longer a budget item's potential lifespan, the more legislative is its nature … . [T]he more a provision's effects tend to survive the [two-year] budget cycle, the more it usurps the legislative function."

Although Judge Rosenblatt found that the contents of Governor Pataki's appropriation bills "push[ed] the edge of the envelope," he nonetheless found them to be constitutional.

Chief Judge Kaye's Dissent

Then-Chief Judge Kaye, joined by Judge Ciparick, issued a stinging dissent in which she asserted that Governor Pataki had "overstepped the line that separates his budget-making responsibility from the legislature's lawmaking responsibility, setting an unacceptable model for the future." By finding in Governor Pataki's favor, the plurality had effectively deprived the legislature from legislating "in any area directly or indirectly relating to an appropriation."

The Budget Extender Under Governor Paterson

The next chapter in the march toward imperial executive power came just a few years later, when then-Gov. David Paterson, in his final year in office, found himself at a budget impasse with the legislature over the issue of spending cuts; Paterson wanted them, the legislature didn't.

As the March 31st deadline loomed, lawmakers proposed a budget extender—temporary spending legislation that allows the State to pay for services, programs and salaries of the state's approximately 150,000 employees if the budget is not passed before April 1st.

Governor Paterson conditioned his approval of the extender bill on the legislature's acceptance of his spending cuts. He claimed that Silver v. Pataki gave him authority to do this.

This set a precedent whereby a governor could easily threaten to jam his budget into any extender bill if the legislature wanted to debate the budget beyond the March 31st deadline. If legislators refused to vote for the extender, they would be blamed for shutting down state government.

Since the constitutionality this approach has never been challenged in court, a delayed budget has become an option in name only.

The Cuomo Era

Governor Cuomo has continued to push the envelope, conditioning the allocation of money to state agencies and departments on progressive programs. The legislature, which is forbidden from altering the governor's appropriation bills, is faced with a "take-it-or-leave-it choice" of either accepting his substantive proposals in their entirety, or simply refusing to fund the state agencies and departments.

For example, in his 2019-20 Executive Budget bill package, Gov. Cuomo tied funding of the state's Board of Elections to enactment of a publically-funded campaign financing system. He tethered funding of the Division of Housing and Community Renewal to enactment of the Rent Regulation Act. Billions of dollars in appropriations for the MTA were conditioned on approval of his NYC congestion pricing program.

Cuomo's Current Budget Proposals

In the 2020-21 Executive Budget bill package, Governor Cuomo has gone even further, conditioning state funding on passage of the following programmatic policy bills:

• Legalization recreational marijuana and creation of an Office of Cannabis Management;
• Banning corporations from contributing to political campaign or from making independent expenditures if a foreign entity controls 5%;
• Mandating paid sick leave for any business with 5 or more employees;
• Legalizing gestational surrogacy;
• Making the fracking ban permanent;
• Banning use of single use Styrofoam containers;
• Enacting a "Green New Deal";
• Requiring "net neutrality" for all ISPs;
• Allowing the Commissioner of the Department of Labor to designate all "gig economy" workers as employees of the company for which they work.

Regardless of the merits of any these programs, none belongs in a budget bill. They all go well beyond simple appropriations and are instead proposals for major policy programs. Nearly all require that State statutes be amended. Some—such as the creation of the Office of Cannabis Management—require a restructuring of government agencies. And all of them have a lifespan that exceeds the two-year budget cycle.

In other words, applying Judge Greenblatt's balancing test from Pataki v. New York State Assembly, these provisions clearly "poach on powers reserved for the legislature," and are therefore unconstitutional.

The gubernatorial abuse that the plurality of the Pataki court recognized could occur with the Executive Budget system has, sadly, come to pass. Chief Judge Kaye, in her dissent in Pataki, presciently noted that the plurality's decision was setting an "unacceptable model for the future." The future of which she spoke is now here.

Making the Problem Worse

Two primary factors have facilitated the unconstitutional expansion of executive branch authority relating to the budget: the budget timetable and single-party government.

Since, under the State Constitution, New York's fiscal year begins on April 1st (New York is the only state in the nation whose fiscal year begins on April 1st; almost all of the others begin their fiscal years on July 1st), the legislature has, at most, only two months after the introduction of the executive budget to solicit public input, hold hearings, deliberate, and negotiate with the governor. In reality, however, the timetable is far more compressed. This is because the governor can submit amendments to his budget package up to 30 days after introducing it, and those amendments often include additional substantive policy programs.

This cramped window of time makes the whole process extraordinarily rushed, denies the public adequate opportunity to understand and fully consider budget proposals before they are adopted, and decidedly gives the governor the upper hand in forcing his agenda through, regardless of whether it benefits the State.

If lawmakers wanted a budget extender to allow more time to consider the governor's proposals, there's a strong likelihood that Cuomo, following Paterson's example, would jam his entire agenda into any extender bill. This effectively eliminates the budget extender as a viable way to gain more time.

And while the legislature theoretically could strike out the provisions in the budget package that don't belong there, the fact that both houses of the legislature are under Democrat control means that there simply isn't the political will to challenge the governor's proposals. The leadership of both houses is more than happy to do the governor's bidding and to allow Governor Cuomo to transgress constitutional limits with impunity. In 1998, then-Assembly Speaker Silver, a Democrat, challenged the excesses of then-Governor Pataki, a Republican—both at the negotiating table and in court. Today, no such counterbalance exists.

The danger of unchecked gubernatorial power over the budget is perhaps best exemplified by the bail reform debacle. That major policy program, which overhauled New York's criminal procedure law, was rammed through in last year's executive budget without a single hearing being on criminal-justice reform and without any input from police, prosecutors, or judges. The Wall Street Journal reported recently that major crime is up 22.5% from this point last year, a fact attributed by the NYPD and Mayor De Blasio to the newly enacted bail reform measures.

If the flaws in the executive budget system are not addressed, we can expect more fiascos like this.

Conclusion

When the executive budget system was first proposed, its opponents argued that it would "make the Governor a czar," while its proponents believed it would promote accountability and reduce the "waste, inefficiency and bungling" of leaving the budget process to the legislature.

With a century of experience now under our belt, it is clear that the executive budget process has, in fact, made the governor an emperor. Indeed, in his first term, Gov. Andrew Cuomo famously pronounced during a radio interview: "I am the government."

The process also has done little to rein in waste and excessive spending—this year alone, we are facing a $6 billion deficit. Nor has it reduced inefficiency and bungling—Albany's reputation for dysfunction and chaos is well deserved.

Thomas Jefferson warned that we must guard against "elective despotism"—where we place too much power in the hands of one elected official—and cautioned that "it is better to keep the wolf out of the fold, than to trust to drawing his teeth and talons after he shall have entered." Sadly, the wisdom of the ages went unheeded. It is now time

It's past time that our State Constitution was amended to reform New York's budgeting process. Such an amendment could keep the executive budget system in place but allow legislators to alter the conditions on how the governor wants that money spent. Or, perhaps it's finally time to return to a legislative budgeting system.

Either way, one thing is for certain—the near absolute authority that New York's executive budget process has vested in the governor is inconsistent with principles of limited government and separation of powers which are vital to democracy. It's time for a change.

Ameer Benno is a trial lawyer and a constitutional law attorney. He can be reached at [email protected].