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PATAKI VETOES LEGISLATION TO REVISE BUDGET PROCESS

Contending that it would take "a flawed process and make it worse," Gov. George E. Pataki vetoed legislation Monday that supporters insisted would end the days of late state budgets and provide more sunshine and a defined set of rules for the creation of the state's annual fiscal road map.

The governor sought to portray a financial doomsday scenario if he signed the legislation, which would force a contingency budget to kick in when a new budget fails to be adopted by the start of the fiscal year. According to Pataki, it could lead to government shutdowns, default on debt payments and adoption of out-of-balance budgets.

Critics said the governor created false explanations for his veto, a rejection they said was really about preserving the executive's overwhelming power in the budget process.

"This bill that he vetoed would have made it possible not to have late budgets again," said Assemblyman Herman D. "Denny" Farrell Jr., D-Manhattan, chairman of the Assembly's Ways and Means Committee.

Under pressure to end the current 20-year slide of late state budgets, the Legislature earlier this year adopted a series of changes, including beginning the budget-creation process earlier and with more public input and pushing back the start of the fiscal year from April 1 to May 1.

An office created by the Legislature would devise revenue-forecasting estimates, a set of numbers that always serves to delay budget action each year.

Its most controversial provision, though, was the contingency budget, which would kick in May 1 if no budget were adopted and continue spending -- with some exceptions, including education -- at the previous year's level.

The provision would continue state spending without the need for emergency appropriations, but critics said that it also would permit lawmakers to get paid. Currently, if no budget is in place by April 1, lawmakers' paychecks are withheld until a budget is passed.

Also, once a contingency budget kicked in, the Legislature could simply reject the governor's budget and craft its own alternative budget package, something it cannot do now under a system that puts such power in the governor's hands.

Pataki said the measure is "not true reform," in part because of the "shifting of power from the executive to the Legislature." He said lawmakers included incentives that "would almost guarantee a late budget every single year."

Farrell said the Assembly would be prepared to override the veto, but Senate Majority Leader Joseph L. Bruno, R-Brunswick, released a statement that did not indicate whether the Senate would consider an override.

The Legislature's package got mixed reviews from watchdog and interest groups.

"The governor is status quo," said Blair Horner of the New York Public Interest Group, which backed the measure along with groups such as the League of Women Voters and Common Cause. He urged Pataki either to quickly strike a new deal with legislative leaders or for both houses to override the veto.

Supporting Pataki were groups such as the Business Council of New York State, whose president, Daniel B. Walsh, said the shift of fiscal power to the Legislature would have only worsened the state's budget problems because of the "constant pressure" on lawmakers from unions and others to spend more state money.

"As laudable as it is that the Legislature made the effort, we think they should go back to the drawing board," said Marcia Van Wagner of the Citizens Budget Commission, a watchdog group funded by business interests.

She said creation of a contingency budget would encourage lawmakers to wait for the deadline to pass so lawmakers could take over the process.

e-mail: tprecious@buffnews.com

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