Every state adopted a budget on time for their new fiscal year, Moody’s said in a report today.
Lawmakers and Gov. Andrew Cuomo have made a big deal in New York about getting two consecutive on-time budgets—a first since 2005 and 2006. But most states have been able to increasingly get their budgets completed on time as their fiscal conditions have improved, Moody’s said.
Four states—including New York—had late budgets in the 2008 fiscal year. Five states had late budgets in 2009; three in 2010 and one last year —- Minnesota.
New York is the only state that has an April 1 budget deadline. Most states’ fiscal years begin July 1.
“The adoption of timely budgets in the last two cycles reflects moderate improvement in state fiscal conditions, and the fact that states have largely avoided the political showdowns that marked the peak of the recession,” the Moody’s report states. “The trend of on-time budget passage underscores the willingness of state officials to make difficult fiscal decisions. While the economic recovery remains tepid and fiscal challenges remain, revenues are growing and budget gaps are markedly lower.”
Late state budgets had long been the symbol of New York’s dysfunction. Lawmakers went more than 20 years without getting a budget passed on time until 2005.
Cuomo has made it a point of getting an on-time budget when he took office in 2011, and it was done a day early this year. Discovered by Gov. David Paterson in 2010, governors in New York have a new weapon that likely will eliminate any extended budget fights: If a budget deal is late, a governor can put his own budget into weekly extender bills—giving the governor huge leverage over the Legislature.
The Moody’s report points out that New York and California have reversed their late-budget problems, saying, “New York passed its budget on time for fiscal year 2013 with seemingly little of the infighting of the past.”
This year, a constitutional amendment in California eliminates the Legislature’s pay for each day it is late passing a budget. New York has had that law on the books for a decade as a way to encourage a budget deal. In New York, the pay is withheld until the deal is completed.
In 2010, the budget in New York was passed Aug. 3—narrowly missing the Aug. 11 record set in 2004 under Gov. George Pataki.