By Philip J. Luongo Jr.

Governor George E. Pataki presented his $72.66 billion state budget proposal for the 1999-2000 fiscal year on January 27, and requested that the state legislature submit its amendments promptly in order to enact a final budget by April 1.

So began the process of negotiating a final state budget package that has always been a tumultuous affair steeped in political posturing and partisan debate.

The budget provides for a number of spending cuts. These include $135 million from the Higher Education Services Corporation almost entirely due to cuts from the Tuition Assistance Program (TAP), $79 million from the Department of Transportation, $47 million from the Office of Children and Family Services, and $21 million from the Department of Economic Development. Pataki also proposed to lower New York's corporate tax rate, eliminate sales tax on clothing under $110 by December 1, 1999, and remove "forever" New York's tax on estates and gifts.

The governor proposed a spending increase of 1.8 percent, down from the preceding year's increase of nearly 10 percent. Among the few spending increases are plans to add $640 million to the School Tax Relief (STAR) program to benefit homeowners, $60 million for the Department of Correctional Services primarily to pay for a new maximum security prison, and a 10 percent increase for environmental and public recreation programs.

The governor's proposed budget has met with significant criticism, and the road to an approved budget will likely be a bumpy one. With the state flush with money and more funds expected from the tobacco settlement, some legislators already have taken issue with the modest increase in state spending. Others have directed more vehement criticism toward cuts to programs like TAP.

Under the state constitution, the governor has a 30-day period from the date he submits the budget to amend or supplement his proposal. During the 30-day period, the Assembly and the Senate will conduct hearings on the budget's components.

Last year, the legislature adopted a conference committee process to expedite bilateral budget approval. In this process, legislative leaders form conference subcommittees to address specific areas of the budget in public meetings. The subcommittees then present their spending and revenue recommendations. Both houses then consider the legislation. The governor also has the power to line item veto appropriations added by the legislature. While this committee process provides more open negotiations, in the long run the governor and leaders of the Senate and Assembly typically continue to make key decisions behind closed doors.

This year, there is another issue at play. When the legislators recently approved a pay increase for themselves, state-wide elected officials, and judges, they also agreed to link their salaries to the passage of a timely budget. In the event that the deadline is missed, the governor can withhold lawmakers' pay until the budget is passed.