New York (State). Division of the Budget

These records were generated or received by DOB executive offices and examination units to document their monitoring and review of agency operations concerning local aid fund expenditure.

The Housing Finance Agency is a public benefit corporation authorized to issue notes and bonds for the purpose of providing funds to make mortgage loans to a variety of limited-profit and nonprofit medical, youth, and senior citizen service facilities; to service companies to finance construction of selected academic and mental hygiene facilities and municipal health facilities; and to mutual housing companies for limited-profit municipal housing projects, leasing, and building in model cities areas. It is also authorized, subject to approval by the director of the budget, to contract with the State of New York Municipal Bond Bank Agency, the New York State Project Finance Agency, the New York State Urban Development Corporation, and the New York State Medical Care Facilities Finance Agency, to render services as requested.

Chapter 660 of the Laws of 1942 created a Temporary State Commission for Post-War Public Works Planning. Its main purpose was to keep records of the progress of design of railroad grade crossing eliminations, highways, parkways, buildings, and other structures and public housing projects for which funds for detailed plans and specifications had been made available to state departments, but for which implementation was suspended during World War II. The commission was to assure that information on the status, scope, cost, employment possibilities, and materials and equipment needed to execute the projects would be promptly available after the war.

It was also charged with ordering and allotting funds for preparation of plans for other state projects, to prepare and maintain progress information on design of post-war projects by municipalities and authorities, and to maintain a liaison with federal agencies on post-war planning. The director of the division of the budget was a member of the commission and served as chairman.

Chapter 661 of the Laws of 1942 amended the State Finance Law to create a post-war planning and capital reserve fund. Through this fund money was dedicated to the preparation and review of plans and specifications and for engineering and other services relating to post-war planning and capital improvements.

CURRENT FUNCTIONS. The Division of the Budget advises the governor in 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 nineteenth 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 nineteenth 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 nineteenth 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 281) 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 that 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 Assemble 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.

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 nineteenth 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 nineteenth 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 nineteenth 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 281) 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 that 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 Assemble 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.