Enacts the "over-expenditure, under-expenditure, transfer notification (OUT) act" to provide for the use of surplus appropriated funds and over-expenditure approval

Summary of provisions

Section 1: Cites the act as the "over-expenditure, under-expenditure, transfer-notification (OUT) act.

Section 2: Amends the state finance law by adding a new section 53-e.

Section 53-e(1): Defines the terms of "state agencies" and "surplus appropriated funds."

Section 53-e(2): Surplus Appropriated Funds; On April 1st, if a state agency has a surplus of appropriated funds, the Governor, the Comptroller and the Legislature must be notified of the surplus and its amount prior to April 15th. Once notified, the Governor, the Comptroller and the Legislature must act on the surplus before May 31st. These entities may allow the state agency to use the money as they see fit or transfer the funds to another state agency. Any appropriations proposed to transfer surplus funds must first be approved by the Comptroller. Failure to act on the surplus funds will result in the funds being transferred to the General Fund.

Section 53-e(3): All state agencies must notify the Governor, Comptroller and the Legislature if they intend to overspend their budget before taking such an action. The Governor and Legislature may then enact legislation allowing such expenditures. Legislation must be approved by the Comptroller.

Section 3: Allows for the act to take effect immediately.

Justification

Oftentimes, a state agency will have a small amount of money left over at the end of the year and unilaterally go on a last minute spending binge. Pretty soon this impulse spending adds up to big dollars.

The $136.5 billion New York State budget is really an amalgamation of hundreds if not thousands of smaller state agency budgets. In fact: there are more than 70 state agencies, 64 colleges in the State University of New York system and 20 City University of New York campuses. This is on top of the scores of public authorities that have little oversight by the legislature or executive branch. Each of these entities can be divided into smaller agencies, bureaus and departments each with their own little budget.

Oftentimes state agencies fear that if they come in under-budget they'll face steep cuts in funding for the following year. It must be established that State agencies that are fiscally-responsible-and spend only what they have been authorized to spend should be commended, not penalized.

The O.U.T. (Over-Expenditure/Under-Expenditure/Transfer-Notification) of Debt Act aims to prevent future attempts to empty agency their coffers at the end of the year to justify their budgets. This act would put a check to this practice.

This legislation would require that all leftover funds are allocated to the general fund to pay down debt or reduce the tax burden on our citizens. If state agencies fail to comply, the Comptroller would be mandated to cancel any unapproved over-expenditures/underexpenditures or transfers. State agencies do not need to spend taxpayer money on additional spending for the simple reason that there is still cash in the account.

If it's important enough to spend tax dollars at the last minute then it's important enough to get authorization from the elected officials that actually pass the budget. This is the taxpayers' money and should be returned to help payoff state debt and reduce property taxes.

This bill won't erase New York's deficit on its own, but it will provide the kind of spending transparency the state needs to help get out of debt and save taxpayers from getting fleeced by end-of-year spending sprees.

Legislative history

2/16/11 Referred to Finance 1/4/12 Referred to Finance

Fiscal implications

To be determined.

EFFECTIVE DATE.: This act will take effect immediately.