Critics say new state budget cuts off large blocks of public spending from independent review
The administration of Gov. Kathy Hochul defended its budget, saying its view is supported by high grades from credit rating companies. Credit: Office of Governor Kathy Hochul
ALBANY — The $254 billion state budget adopted last month by Gov. Kathy Hochul and the State Legislature includes new limits on scrutiny that independent analysts say make it harder for taxpayers to know what they are paying for.
Critics say the measures include excluding some spending from review by state Comptroller Thomas DiNapoli, avoiding competitive bidding in some contracts, pushing some spending and borrowing onto state authorities instead of the budget and passing "lump sum" appropriations that will be divvied up after the budget was approved,
Hochul, who crafted the budget, defends the transparency of the budget as "abiding by all applicable state laws," her spokesman Tim Ruffinen said. The Hochul administration said its view is confirmed by high grades from credit rating companies.
"As a result of these efforts, the state holds an AA+ credit rating and maintains robust reserves in the event of an economic downturn," Ruffinen said. He noted that in addition to the hundreds of pages of budget bills, the governor releases a financial plan that is updated quarterly to show revenue projections and spending, as required by law.
WHAT NEWSDAY FOUND
- The $254 billion state budget adopted last month by Gov. Kathy Hochul and the legislature includes new limits on scrutiny that independent analysts say make it harder for taxpayers to know what they are paying for.
- Critics say the measures include excluding some spending from review by the state comptroller and passing "lump sum" appropriations that will be divvied up after the budget was approved.
- Hochul, who crafted the budget, defends the transparency of the budget as "abiding by all applicable state laws," a spokesman said.
Shortly after Hochul took office in 2021, she "pledged a new era of greater transparency and accountability," according to a statement on her official website.
Among those critics of the transparency of the budget, however, is DiNapoli. He is a Democrat, like the governor and leaders of the State Senate and Assembly, and under the state Constitution, he is the independently elected auditor of government spending.
His spokeswoman told Newsday that the new budget exempted more than $1.5 billion in public spending from review by the comptroller’s staff.
DiNapoli said the measures not only exempt some public spending from oversight by the comptroller, but avoid competitive bidding that seeks the best price among qualified bidders on some contracts. In addition, decisions on how to spend another $2.8 billion wouldn't be made until after the budget passed and without competitive bidding.
DiNapoli in a budget report in February said Hochul’s 2025-26 budget ceased releasing data publicly that "provided more transparency and a greater understanding of the state’s actual spending patterns, which have been obscured or distorted."
The changes reduced transparency for taxpayers and legislators and reduced competition for some contracts "over a significant amount of taxpayer-supported state spending," according to DiNapoli’s report.
Other fiscal analysts agreed.
"Gov. Hochul and state lawmakers should be strengthening the oversight powers of the Office of the State Comptroller, not painting his green eyeshades black," said Blair Horner of the New York Public Interest Research Group, a government watchdog.
"The final budget significantly increased the amount of money that would be spent outside of the comptroller’s oversight authority," Horner said. "And added billions in spending that appears to be eligible for distribution outside of the competitive bidding process."
Patrick Orecki ,of the nonpartisan Citizens Budget Commission, said DiNapoli’s concern is proven by tracking recent changes in state budgets.
"The comptroller's oversight and procurement rules are regularly sidestepped by one-off exemptions within appropriations," Orecki told Newsday. "Those exceptions are not trivial; they open the door to waste and corruption."
Spending by authorities
Orecki said that among the ways of making the budget more opaque is moving more spending to the many state authorities, such as the Metropolitan Transportation Authority and state Dormitory Authority. Under state law, authorities that were created as independent government entities can spend without adding to the state budget and can borrow without taxpayer approval.
Other measures include a rise in the use of "lump sum" spending in the budget totaling billions of dollars allocated by a plan devised outside the budget. Still other measures include delaying payments to the next year, he said.
John Kaehny, of Reinvent Albany, a good-government group, said this budget session "plunged backward on basic accountability."
"It’s like keeping a secret set of books in a locked drawer where the comptroller can’t see them," Kaehny said in an interview. "And the amount of spending in that separate set of books just keeps getting bigger and bigger."
Ruffinen, Hochul’s budget spokesman, said no funding is withheld from the comptroller’s review and he has the constitutional authority to audit any spending. But the critics said that includes post-award audits that can be done only after contracts are awarded by governors. Good-government advocates said audits of contracts should be done before the contract is awarded — they are called pre-audits — to be most effective for taxpayers.
In addition, the legislature in 2023 repealed the restrictions on these pre-audits enacted under former Gov. Andrew M. Cuomo and approved by the Legislature, mostly during the COVID-19 pandemic. Hochul signed that legislation.
"The New York State Division of Budget prides itself on transparency, accountability, best budgeting practices, and abiding by all applicable state laws," Ruffinen said.
Speed or convenience?
Governors have argued the measures are needed to speed contracts, even though a comptroller’s review typically takes only six or seven days.
However, Pete Grannis, first deputy comptroller under DiNapoli, said the carveouts are done mostly out of "convenience."
Grannis said the current budget has "hundreds of carveouts" from independent scrutiny and competitive bidding of contracts. Grannis has a unique perspective after spending 32 years as a powerful Democratic Assembly member and several years as a state commissioner.
"I have a very different view of this now," Grannis said in an interview. "Our job is not to hold things up ... our job is to always make sure what is being done by the governor and the legislature is done properly."
Kaehny said Albany often forgets an important fact in budgeting.
"The very important thing is that it’s our money," Kaehny said. "That basic fact is forgotten over and over again."
Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.
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