Posts tagged ‘new york state budget’

A Tale Of Two Budgets: Why It Matters To Your Credit Union

Nothing underscores the sharp differences between Congress and the New York State legislative processes more than the differences between how legislators in New York and Congressmen in Washington decide how to spend money.

Senate Budget Chairman, Republican Mike Enzi, greeted President Trump’s proposed $4.8 trillion dollar budget by announcing that he would not bother holding a hearing on the proposal. According to the Wyoming Senator, “nobody has listened to the President in the 23 years that I’ve been here.”

Meanwhile, New Yorkers and legislators anxiously awaited the Governor’s budget proposal with an increasing number of legislators grousing that he has too much power.

Why am I talking about this now? Because the Governor has proposed legislation in his budget, such as one addressing financial abuse of the elderly and disabled, that would have a direct operational impact on credit unions. In addition, the distinctions are important to understand as the lobbying season goes into high gear. Besides, I really enjoy the subject, so humor me a little.

Article I, section 9 of the U.S. Constitution provides that “no money shall be drawn from the Treasury, but in consequence of appropriations made by law”. In other words, the power of the purse belongs to Congress, not the President which is why the senator can be so dismissive of the President’s proposal and the President can devise a budget plan catering to his political supporters secure in the knowledge that it has not practical consequences. Given the give and take of the political process, for much of the last century, the President and Congress would ultimately engage in negotiations that resulted in a functioning spending plan. On paper the Federal fiscal year begins on October 1st and there are twelve subcommittees with jurisdiction over virtually all discretionary spending on the Federal level each of which crafts a bill for Congress to pass and the President to sign or veto.

But the system has largely broken down—a trend which pre-dates the Trump Administration. Appropriation bills are cobbled together in a last second omnibus appropriations bill, assuming one can be agreed to. Today the Federal Government is run by a series of continuing resolutions which are short term spending plans intended to keep government functioning until the President and Congress reach a final agreement.

Meanwhile on the state level the Legislature has no choice but to consider the Governor’s spending plans. As early as 1915, Henry Stimson proposed amending the state’s constitution to give the Governor the responsibility of implementing a unified executive budget. At the time, appropriations were made with little regard for the overall impact on state spending.

Stimson’s initial efforts failed but in 1927 Article 7 section 4 of the State Constitution was enacted.

In contrast to the Federal Constitution, this provision provides that the Governor must propose a budget for the upcoming fiscal year and that the “…legislature may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein, but it may add thereto items of appropriation provided that such additions are stated separately and distinctly from the original items of the bill and refer each to a single object or purpose.”

This is incredibly powerful language. It means that the Governor’s executive budget has the force of law unless it is acted on by the Legislature which only has the ability to reduce or increase suggested appropriations. In addition, a series of important cases in the early 2000’s further strengthened the Governor’s hand by holding that the Governor’s budget powers applied not only to the actual amount appropriated but to the language accompanying an appropriation. That is why you have seen every Governor since George Pataki put more and more of his legislative priorities in his proposed budget.

The Governor has the right to amend his proposals and that is what will be taking place up until April as staff persons and legislative leaders haggle over the state’s spending priorities. But the legal structure means that the Governor starts these negotiations from a position of strength. The legislature could simply refuse to enact a budget by April 1st, but unlike the Federal Government the political consensus in New York has been that the public has little appetite for a government shutdown.

February 13, 2020 at 9:46 am Leave a comment

In The Wee Small Hours of The Morning A Budget Is Passed

In the wee small hours of the morning when the whole wide world was fast asleep, the state legislature passed a budget for the 2019-20 fiscal year that starts today. In fact, the Assembly ended its all-night session less than an hour ago.

To give you a sense of what it’s like to be a rank and file New York legislator this time of year, imagine getting a briefing on an all-encompassing budget bill at 12:45 in the morning, delivered by staff that hasn’t gotten more than a few hours’ sleep in the last week. They explain to you the main provisions of a bill you haven’t seen yet but will be expected to vote on in the next hour. Keep in mind many of the major priorities that will define your voting record are contained in this and several other bills which were printed up in the last few days to meet the state’s annual budget deadline. When you get back to your desk here is a copy of the bill you will be voting on.

This is the process that your state representatives and senators went through in the last couple of days as they finalized agreements on a broad range of topics. I’ve only begun skimming the final product but what is clear is that the issue could have had the biggest impact for credit union operations, the legalization of marijuana banking, was left out of the budget. Meaning it promises to be one of the highest profile issues left to be debated as we enter the legislative phase of the session. There is almost always one or two small items which impact your operations and when we get a chance to review all of the bills we will let you know what we find. Here is a copy of the Governor’s press release.

And don’t get me wrong, the process is vastly better than it used to be. In the worst of times, budgets were not finalized until mid-way through summer and usually on the closing days of the legislative session. Besides, there is something strangely enjoyable about an all-night session; it’s kind of like a college party but for adults.

Marijuana Act Advances

Speaking of marijuana, even though New York State’s budget did not include a joint agreement on further legalizing marijuana possession, (did you get the pun?) the House Financial Services did vote out legislation to make it legal as a matter of federal law to provide banking services in states where marijuana possession is legal. As explained by the Chairwoman at the start of the hearing, “The banking bill “addresses an urgent public safety concern for legitimate businesses that currently have no recourse but to operate with just cash,”

While this is an important step forward and of course increases the likelihood that the House will pass this important banking legislation, a recent article in the American Banker pointed out that passage in the republican controlled senate is by no means a sure thing.

April 1, 2019 at 9:07 am Leave a comment

Are You Preparing For New York’s Sexual Harassment Laws?

Among the most high-profile legislation passed by the legislator this year was a package of bills responding to the “me too” movement striking out against sexual harassment. While I wanted to wait for some regulations clarifying some of these provisions to be promulgated, we are getting late in the summer and it’s time to start preparing for these mandates. As you’ll see, these requirements cannot simply be satisfied by popping new policies into the binder. This is certainly an issue worthy of contacting your HR lawyer about, if you haven’t done so already. Training programs will have to be organized and important deadlines will have to be complied with.

Among the changes approved by the Governor and the Legislator is:

  • New York State is requiring that by October 9th of this year all employees receive a sexual harassment policy which meets or exceeds the standards to be established by the Department of Labor. Employers can either choose to adopt a model policy created by the Department of labor or amend their own policy to meet the Department of Labor requirements. The catch is that the Department of Labor has yet to promulgate its model policy. Under the legislation, the policy must: (i) prohibit sexual harassment and provide examples of prohibited conduct that would constitute unlawful sexual harassment; (ii) include information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment and a statement that there may be applicable local laws; (iii) include a standard complaint form; (iv) include a procedure for the timely and confidential investigation of complaints and ensure due process for all parties; (v) inform employees of their rights of redress and all available forums for adjudicating sexual harassment complaints administratively and judicially; (vi) clearly state that sexual harassment is considered a form of employee misconduct and that sanctions will be enforced against individuals engaging in sexual harassment and against supervisory and managerial personnel who knowingly allow such behavior to continue; and (vii) clearly state that retaliation against individuals who complain of sexual harassment or who testify or assist in any proceeding under the law is unlawful.
  • A requirement for annual interactive sexual harassment training. Although we have to wait to see what the regulations actually say, it’s a very safe assumption that in order to comply with this regulation it will no longer be enough to have your employees watch pre-recorded sexual harassment webinars. In addition, much of what will have to be in your sexual harassment policies will also have to be included in this training.
  • There’s also a couple of laws that have already taken effect, most importantly a new section 5003-b of New York’s CPLR now prohibits settlement agreements involving sexual harassment claims from including non-disclosure agreements unless “the condition of confidentiality is the plaintiff’s preference.” The plaintiffs must have twenty-one days to make a decision. In addition, sexual harassment claims cannot be subject to mandatory arbitration provisions.

Finally, a new section 296-d of New York’s Executive Law makes it an unlawful practice to permit sexual harassment of non-employees in your workplace. Chances are your policy doesn’t specifically address this issue but it should. There has actually been some interesting cases on this issue and the armchair lawyer in me says that this could be one of the areas where you see a surprising amount of litigation.

August 14, 2018 at 9:11 am Leave a comment


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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