I Not later than the first week of the regular session of the legis2 lature, the governor shall submit to the legislature the regular 3 administration appropriation bills supported by estimates show4 ing the financial needs of departments, bureaus, offices, and com5 missions under his jurisdiction; and either personally, or by of6 ficial representatives designated by him, shall meet with the legis7 lature on such days as shall be appointed for this purpose to 8 explain, discuss and defend such requests.

9 Not later than sixty days after the beginning of the regular 10 session, the governor shall submit to the legislature a budget which shall contain a financial plan for the next fiscal year supported 12 by summary statements setting forth—(a) actual and estimated

II

13 revenues and expenditures for a period beginning not less than 14 two years prior to the period to be financed; (b) the present assets, 15 liabilities, surplus and deficit, and the estimated financial condi16 tion of the state as of the beginning and the end of the period to 17 be financed; (c) the present condition of funds and the estimated 18 condition of appropriations and funds as of the beginning and the 19 end of the period to be financed; (d) such revenue bills as are 20 deemed necessary to meet financial needs and ratably and equi21 tably to distribute the charges; (e) such measures for borrowing as may be deemed expedient; (f) a message in support of bills

22

23

or measures submitted and explaining administrative financial

24 proposals.

25

No. 470.

EXPOSITION OF THE PROPOSED CONSTITUTIONAL AMENDMENT

BY HON. JOHN G. SAXE

[The following exposition of the proposed constitutional amendment (above Chapter I) was made before the committee of the constitutional convention on finances, revenues and expenditures, by Hon. J. G. Saxe, on June 24, 1915.]

THE CHAIRMAN (HON. HENRY L. STIMSON)—The committee will please come to order. We will hear Mr. John Godfrey Saxe in relation to his proposed amendment, Int. No. 458, Print No. 470.

MR. SAXE-Mr. Chairman and members of the committee, you have heard many distinguished speakers on the subject of state finance. If I were the only speaker, I should ask your indulgence to speak at great length; but, in view of your great familiarity with the subject, my remarks will be very brief.

At the present time the constitution requires the governor to communicate by message to the legislature, at every session, the condition of the state, and recommend such matters to it as he shall judge expedient. That is virtually all that there is in the constitution in respect to the submission of estimates or a budget. It has been customary for the governor to submit his message in the early days of the session; and after he has made this preliminary communication nothing else happens in relation to appropriations until the last days of the session, when there is a general scramble up the back stairs to secure divers and sundry "plums" from the members of the finance committee of the Senate or the ways and means committee of the Assembly. Members of the legislature who are not members of either of these committees hardly ever pay any attention to appropriation bills, and there is certainly nothing in the constitution requiring or inviting

them to do so. The constitution does not even require the submission of departmental estimates, and such estimates as are submitted are submitted as requests rather than as estimates.

The first thing, therefore, that is necessary to be done to correct the present system is to turn it upside down. Instead of having a general report by the governor at the beginning of the session on the condition of the state, the estimates ought to come first. And instead of the estimates coming last the governor's report on the condition of the state should be made after the estimates have been examined in committee of the legislature, and the report should obviously be in the form of a detailed budget. This indicates the fundamental purpose of my amendment. It requires the submission of estimates during the first week of the session. There is no difficulty about that

THE CHAIRMAN (interrupting)-I wish you would go into detail on that, because the last few speakers, who have opposed your amendment, have emphasized that point.

Please bear in

MR. SAXE-There is nothing in that at all. mind, first, that what the governor is submitting to the legislature is estimates. At this stage he is not submitting a budget, but estimates. If you will examine any one of the appropriations or supply bills you will note that 90 per cent of the items are what might almost be called standard items, items which run. along from year to year, the estimates for which are prepared by the clerical force of the department which asks them. Most of the items would be the same, no matter what administration asked for them. If this is borne in mind the obvious needs of submitting the estimates to the legislature at the earliest possible moment greatly outweigh the wholly imaginary danger of having one administration prepare, in part, the estimates for the next, particularly if you will bear in mind that under any amendment the governor, when he submits his budget sixty days after the beginning of the session, may also submit any amendments which he chooses to propose. You will find this latter provision on page 3 at lines 11 and 12.

What comes next? The next matter of importance is to make some provision so that the legislature will do active work on proposed appropriations and at the same time publicity may be secured in the discussion of such appropriations. Thus, my amendment provides that the governor and the heads of depart

ments may appear before the legislature sitting in committee to explain just what these estimates are. To-day a member of the legislature has no means of ascertaining what is in an appropriation bill unless he is on one of the two committees, but under my proposed amendment the legislature must sit at least once. a week in commitee to hear the governor and the other heads, of the executive department. At this period the legislature does not pass any bills, although the governor has submitted his appropriation bills with his estimates. It may be, of course, that an occasional appropriation bill will have to be passed to take care of an urgent deficiency existing at the time; but nothing else is done, except the same sort of discussion that you, gentlemen, are now welcoming at your sessions.

In this same connection I have also incorporated an additional suggestion that, when the legislature is sitting in committee, votes shall be taken on the amount requested by each department, separately. You will find this on page 2 at lines 23 to 25. This should serve to give publicity to the discussion, and should also serve to call the attention of members to the appropriations on which they are voting. It is in striking contrast with the present procedure of passing appropriation bills with a hip, hip, hooray! on a short roll call.

MR. LINCOLN-You do not mention in your proposed amendment that the Senate and the House separately

MR. SAXE-The question whether we shall have one or two Houses is before the committee on the legislature and its organization, and I suppose that that question must be settled by the convention before we can decide the exact wording of my amendment on this point. If we are to have two Houses, I would favor the two Houses sitting together on estimates, but that, of course, might give rise to considerable objection. However, that question is relatively unimportant. The important thing is to offset this ridiculous system we have to-day and devise a system where the estimates are submitted first and a detailed budget is submitted last.

If you will turn to page 5, lines 9 to 24, you will find that the governor must submit a budget which shall contain a financial plan, supported by detailed summary statements which I have grouped under six different heads. To those gentlemen who argue that we are going too far when we require the estimates to be

submitted in the first seven days, I want to reply, and to reply conclusively, that to-day the governor attempts to communicate the condition of state before he knows anything about it, whereas, under my amendment, he is not required to report the condition. of the state until sixty days have elapsed and after there has been discussion in committee over the estimates and his proposed bills; and then he makes this budget report, which you will find on page 5, covering the whole subject in detail, which is now covered in the constitution by the single line "Condition of the State."

MR. AUSTIN-Have you provided how far your budget shall be binding on the legislature?

MR. SAXE-Yes. If you will look at page 2, line 25, and page 3, lines 1 and 2, you will find that I have provided that no amendment to an administration appropriation bill or item may be offered by any member of either house except to reduce the amount thereof.

THE CHAIRMAN (interrupting)-In your order, when you come to it in your discussion, will you take up the question of how you would deal with separate bills carrying money appropriations? In other words, one of the problems is, when you stop the leak in the budget by preventing increases, increased estimates, what do you say in reference to separate legislation initiated in the House?

MR. SAXE-In an earlier draft of our bill we prohibited the introduction of members' bills in respect to departmental expenditures and limited members' bills to the necessary expenses for the legislature and judiciary. In the present bill we have authorized members' bills, even for departmental items, but they must be passed by a two-thirds vote and are subject to the veto power of the governor.

THE CHAIRMAN-Sometimes, although the head of the department may not want the money, as has been said to this committee, he may be under pressure from above him not to ask for money, yet some subordinate of his may want to go ahead and get it and have a friend on some legislative committee that is willing to be the medium for granting that desire.

MR. SAXE-I don't think we are to look after those subordinates. The head of the department has to do that. We should have to have some decency in our government.

THE CHAIRMAN-But, you know, those efforts are constantly