Establishes a spending cap and increases the maximum capacity of the rainy day fund

Summary of provisions

Section One - amends the state finance law by adding article 17 entitled "spending growth cap act."

Section One - defines "annual spending growth cap" as a percentage determined by adding the inflation rates from each of the three calendar years immediately prior to the commencement of the given fiscal year and then dividing that sum by three.

Section One - defines "state operating funds spending" as an annual disbursement of all governmental fund types included in the cash-basis financial plan of the state, excluding disbursements from federal fund and capital project funds.

Section One - defines "inflation rate" as the percentage change in the twelve month average of the consumer price index for all urban consumers as published by the United State department of lab, bureau of labor statistics or any successor agency for a given calendar year compared to the prior calendar year.

Section One - defines "executive budget" as the budget submitted annually by the governor pursuant to section one of the article VII of the state constitution.

Section One - defines "state budget as enacted" as the budget acted upon by the legislature in a given fiscal year, as subject to section four of article VII of the state constitution and section seven of article N of the state constitution.

Section One - defines "emergency" as an extraordinary, unforeseen, or unexpected occurrence, or combination of circumstances, including but not limited to a natural disaster, invasion, terrorist attack of economic calamity.

Section One - states the governor will not submit, and the legislature will not act upon a budget that contains a percentage increase over the prior fiscal year in state operating funds spending which exceeds the annual spending growth cap.

Section One - states the governor will certify in writing that state operating funds spending in the executive budget does not exceed the annual spending growth cap. If final inflation rate data for the prior calendar year is not yet available at the time the governor submits his or her executive budget, he or she shall furnish a reasonable estimate of such prior calendar year inflation rate.

Section One - states the comptroller will provide, within five days of action by the legislature upon the budget, a determination as to whether the state operating funds spending as set forth in the state budget as enacted exceeds the annual spending growth rate. If the comptroller finds that state operating funds spending as set forth in the state budget as enacted exceeds the annual spending growth cap, the governor will take corrective action to ensure that funding is limited to the amount of the annual spending cap.

Section One - states upon finding of an emergency by the governor, he or she may declare an emergency by an executive order which shall set forth the reasons for such declarations. Based on this declaration, the governor may submit and the legislature may authorize, by a two-thirds super majority, a budget containing a percentage increase over the prior fiscal year in state operating funds spending that exceeds the annual spending growth cap.

Section Two - amends subdivision 2 of section 92-cc of the state finance law by to state this fund will have a maximum balance not to exceed ten per centum of the aggregate amount projected to be disbursed from the general fund during the fiscal year immediately following the then-current fiscal year. Section Two - provides this act shall take effect immediately.

Section Three - this act shall take effect immediately.

Justification

During the 2011 session the New York State legislature passed a 2% tax cap for local municipalities and schools. It is only fair to place the same expectation of fiscal responsibility on the state government. In Colorado they already have a spending cap in the form of a 'Taxpayer's Bill of Rights', and more than $2 billion has been returned to the taxpayers. A real statewide spending cap with no loopholes would be a huge change in the way we are operating here in New York. With a spending cap Albany, a culture that has been hopelessly addicted to runaway spending, would not be able to raise tax rates by double digits as has been done in the past.

Legislative history

1/24/12 Referred to Finance

Fiscal implications

None to State.

Effective date

This act shall take effect immediately.