Freezes state spending for fiscal years 2009-2010, 2010-2011 and 2011-2012

Title of bill

An act to temporarily freeze state spending for fiscal years 2010-2011, 2011-2012 and 2012-2013

Purpose

To enact a temporary freeze on state spending in order to help New York State reduce its debt.

Summary of provisions

Section 1 states that neither the governor nor the legislature shall act upon any appropriation bills which would authorize an increase in total state spending for the fiscal years 2009-2010, 2010-2011 and 2011-2012.

Section 2 allows that an increase in spending can occur in the case of an emergency. In order to increase spending in excess of the limitation provided in subdivision one an emergency must be declared by the governor and such spending must be authorized by a two-thirds vote in both the Assembly and Senate.

Section 3 mandates that all revenues in excess of the state spending limitations in these fiscal years shall be deposited into a service fund used to payoff the state debt.

Section 4 any legislation with fiscal implications passed after the budget for these fiscal years shall be offset with savings derived from existing funds and shall not impose additional costs to the state.

Section 5a defines "Total state funding" as general funds, special revenue funds, capital project funds, and debt service funds. It shall not mean federal funding or federal grants.

Section 5b defines "emergency" as an extraordinary and unexpected occurrence which requires immediate and sudden fiscal action of a drastic but temporary nature.

Justification

This legislation will encourage New York's lawmakers to be more fiscally responsible and will temporarily freeze state spending for three years based on the current fiscal year's budget. This bill will freeze state spending and use any excesses to payoff state debt.

Future legislation with fiscal implications passed after the budget for fiscal years 2009 through 2012, shall be offset with savings derived from existing funds and shall not impose additional costs to the state. Additional spending will be through pay-as-you-go rules and will allocate funding from existing sources. In any fiscal year, if total state revenues are in excess of the state spending limitation they shall be deposited into the debt service fund and shall be used to pay down the state debt.

In the 2009-2010 budget, state spending increased by $3.9 billion dollars while revenues were in decline and a $17.9 billion deficit existed. This level of state spending is unsustainable. Along with increased spending, various tees were created and taxes were increased. This activity impacts business and residents of the state. The NYS Comptroller has projected the three year budget gap to be $25 billion if this level of spending persists. NYS currently has the second highest state and local tax burden in the nation. The level of state spending is unsustainable. Continuing to increase taxes and fees to pay for larger and larger state budgets will push people out of New York State, further burdening the remaining population. Our New York State debt totals more than $52 billion dollars. New York has the second highest combined state and local debt per capita in the nation. This debt was accrued over periods of time including 1996 through 2001, during the time when the state had substantial surpluses. This accumulation of debt is fiscally irresponsible.

Thirty one states have instituted spending caps in various forms to control spending and taxation.

Legislative history

None.

Fiscal implications

None.

Effective date

This act shall take effect immediately.