Even as a budget agreement eludes New York lawmakers, both houses of the Legislature have found common ground in seeking a shift to generally accepted accounting principles budgeting.
Last week, Sen. Liz Krueger, D-Manhattan, introduced S. 7284, which would require the state to enact balanced budgets under GAAP beginning next year. Earlier last month, Assembly Speaker Sheldon Silver, D-Manhattan, introduced budget reform legislation closely resembling a plan crafted by Lieut. Gov. Richard Ravitch that included changing the state's budgeting to GAAP.
"We have a budget process that allows shady accounting practices and encourages a model of non-accountability for spending, revenues, and borrowing," Krueger said in a press release.
The Senate majority Democrats presented Krueger's bill yesterday as part of a package of budget reforms that was composed of several bills that had already been introduced. The GAAP proposal would create a board to review the state's budget and advise the governor and Legislature when the budget was out of balance.
Krueger's oversight board would play an advisory role, whereas Silver's proposed board could empower the executive branch to make budget cuts if the Legislature and governor couldn't balance the budget under certain circumstances.
Under GAAP accounting, revenue is recorded when it is earned and spending is recorded when costs are incurred. Proponents of putting the state on GAAP footing say it will eliminate fiscal gimmicks and realign recurring spending with recurring revenue.
Division of Budget spokesman Matthew Anderson said Gov. David Paterson's office was "willing to consider a broad range of budget process reform proposals" but did not address a question about the use of GAAP accounting.
The Senate's proposals also included moving the beginning of the state's fiscal year to June 1 from April 1, establishing two-year budgets and financial plans, and creating a nonpartisan Legislative Budget Office modeled after the Congressional Budget Office.
