Preliminary Guide to Environmental Sources
Division of the Budget
Current Functions. The Division of the Budget advises the governor on fiscal matters and on the management of State government and formulates and executes the executive budget. To accomplish this the division estimates revenue; analyzes agency appropriation requests; conducts hearings to review agency appropriation requests; investigates, supervises and coordinates State agency expenditures; and conducts management studies of State agencies.
Organizational History. This division was established by legislation in 1926 in anticipation of the adoption of the 1927 constitutional amendment requiring the governor to prepare a State budget and the necessary appropriation bills to put it into effect.
Until the late 19th century the management of State finance rested largely upon the legislature, which appropriated money, and upon the comptroller, who computed the amount of revenue needed to cover the legislative action and notified the counties of the amount they would be required to raise for the State through taxes on real and personal property. During the last two decades of the 19th century, however, this system proved unworkable. The revenue raised from local sources was inadequate to support expanded State regulatory programs and supervision of health and welfare services. Therefore, the legislature added a variety of new taxes, largely collected directly by the State (see Department of Taxation and Finance).
By the end of the 19th century, State officials recognized the need for a more unified fiscal management program. The New York Bureau of Municipal Research, a private group organized in 1906 to promote improved public administration, also advocated a systematic State budget system. At the urging of the bureau, the New York State Board of Estimate was established in 1913 (Chapter 281) to formulate a rudimentary budget and prepare appropriation bills. This board, consisting of the governor, lieutenant governor, president pro tempore of the senate, speaker of the assembly, chairpersons of the Senate Finance Committee and Assembly Ways and Means Committee, comptroller, and attorney general, was required to prepare and transmit to the legislature an estimated budget for the administration of State government. Also created in 1913 (Chapter 280) was the Department of Efficiency and Economy, headed by a commissioner who was also ex officio secretary to the Board of Estimate. This department was empowered to study the accounts and methods of operation of administrative agencies and to require and examine annual statements of proposed expenditures from each agency.
Ironically, the board and the department were abolished in 1915 on the eve of a constitutional convention which proposed amendments to increase the governor's responsibility to manage the executive branch and to develop a comprehensive financial plan for the operation of State government. Although the proposed constitution was defeated, the adoption of an executive budget system by the federal government in 1921 and the progress in other states helped maintain interest in developing a system of budgetary control for New York State.
A Board of Estimate and Control, consisting of the governor, comptroller, and chairpersons of the Senate Finance Committee and Assembly Ways and Means Committee, was created in 1921 (Chapter 336). It was responsible for presenting a proposed plan of expenditures to the legislature, although the absence of a constitutional base for budgeting left the legislature more or less free to develop the appropriation bills as it had always done. Constitutional amendments of 1925 and 1927 not only reorganized State government to make the governor the unchallenged head of the executive branch but also established an executive budget system. The enabling legislation that initiated the reorganization provided for the creation of the Division of the Budget within the Executive Department, abolished the Board of Estimate and Control, and transferred its personnel to the new division (Laws of 1926, Chapter 546).
Through an agreement with the legislative leaders, Governor Alfred E. Smith presented the State's first executive budget to the legislature in 1928, thus inaugurating a system that has continued intact until the present day. In the following year, Governor Smith's successor, Franklin D. Roosevelt, presented the first executive budget formally under the new constitutional system. Under this system, executives of all State agencies are required to furnish the division with estimates of the annual financial needs of their respective agencies and to appear at hearings for review of these requests.
DIVISION OF THE BUDGET
|General Agency-level Records|
|16521||Capital projects files, ca. 1944-1988.
136 cu. ft.