As the battle of the New York budget moves into its crucial phase, a whiff of panic is emanating from those hoping to railroad the governor into radical increases in spending. The panic is being caused by a decision the state’s highest court issued on December 16 on what the New York State Constitution means for the balance of power between the governor and the Legislature when it comes to matters of the budget.

The court consolidated in its December 16 decision two cases – one involving the Legislature’s attempt to alter the governor’s budget in 1998 and an other involving the governor’s use of the budget submitted in 2001 to change the formulas governing the distribution of aid to public schools – but in both, it sided with the governor, upholding the plain language of the constitution, which says, in effect, that the Legislature may reduce or refuse to act on the governor’s spending proposals. But it may not substitute its own preferences or increase the governor’s allotments.

In the context of the current budget showdown, that is a little A-bomb, and the question is whether the governor will have the gumption to use it, particularly in the showdown over the Campaign for Fiscal Equity. There has been much palaver about finding the right amount of money in respect of what it costs to meet the constitutional requirement of a sound education. But at the end of the day, the governor is going to have to submit a number to the Legislature.

When he does, it seems extremely unlikely that the state’s highest court is going to give the Legislature the constitutional authority to raise the governor’s budget line and force him to spend more. It can cut his proposed outlay or not act on it at all, but to raise it, the speaker, Sheldon Silver, and other handmaidens of the teachers unions are going to have to find a way around the Court of Appeals.

“To invite the Governor and the Legislature to resolve their disputes in the courtroom might produce neither executive budgeting nor legislative budgeting but judicial budgeting – arguably the worst of the three,” said the court in the ruling handed down last month. Instead, New York’s Court of Appeals seems determined to preserve the state’s constitutionally mandated executive budgeting system.

“If the Legislature disagrees with the Governor’s spending proposals, it is free, as the no-alteration clause provides, to reduce or eliminate them; it is also free to refuse to act on the Governor’s proposed legislation at all, thus forcing him to negotiate. But it cannot adopt a budget that substitutes its spending proposals for the Governor’s.” The state budget, according to the court, “must be based on the Governor’s judgment not only on how much money to spend, but on which specific expenditures are prudent, and what preconditions should be imposed on them.”

The debate over educational funding prompted by the Campaign for Fiscal Equity has so far focused on the need for action in the Legislature. The campaign itself, wary of the governor’s own Commission on Education Reform, formed an expert-assisted task force that presented proposals independently to the Legislature. But New York’s appropriations process isn’t an equal dialogue between the governor and the Legislature. As the court noted, the state constitution empowers the governor to be “constructor” of the budget while the Legislature remains “a critic” of the budget rather than “a rival constructor.”

There is a logic to New York’s executive budgeting system. In 1915, Henry Stimson, a former secretary of war and future secretary of state, chaired a committee that recommended the system to New York’s Constitutional Convention. Legislative budgeting, said Stimson, produced “extravagance, waste, and irresponsibility.” His solution was to put the governor in charge of the budget so New Yorkers would “know exactly whose fault it is if waste occurs.” Legislators, argued Stimson’s committee, were accountable only to voters in their own districts, rather than to the state as a whole, so they would prepare a budget by “compromise or bargain,” a process that was “stigmatized by the terms ‘log rolling’ and ‘pork barrel.'”

As if to underscore the point, the current wrangling over how to distribute aid to schools around the state has also been marked by a clash of sectional interests. Just yesterday, New York City’s top lawyer, Michael Cardozo, told Justice Leland DeGrasse that the city would welcome additional school funds – as long as the city doesn’t have to bear any of the expenses. Free-rider problems in distributing Albany’s funds only recommends Stimson’s solution: the principle of executive budgeting in our constitution.

The governor, unlike any member of the Senate or Assembly, was elected by all the people of New York State. It’s up to him to craft a solution in the interest of the state as a whole. At yesterday’s hearing before Judge DeGrasse, Assistant Attorney General Richard Rifkin, who was representing the state, seemed interested in preserving the governor’s constitutional prerogatives. He said a court order directing the state to spend specific amounts of money would violate the principle of separation of powers.

Now, there’s another point, which was made to us by the president of the United Federation of Teachers, Randi Weingarten, who said of the December 16 ruling, “It should strengthen a governor’s hand enormously, but I don’t think it will strengthen this governor’s hand…because in a case like the CFE case you need not simply a legal solution but a political solution as well.” That is precisely the drama. The governor is legally empowered to craft the formula for funding schools across the state. But will he have the courage to use the powers the court is signaling it’s prepared to give him?