Relates to prohibiting the diversion of funds for purposes other than those for which the funds were originally intended

The Diversion Impact Statement must contain the amount of the diversion the amount diverted from each fund; the cumulative amount diverted from each of the funds subject to diversion during the preceding five years, which shall also be categorized by fund type; the date or dates when the diversion is to occur; a detailed estimate of the impact of diversion from each fund; and the purpose for which the funds will be diverted. In cases where the emergency involves the need to repel invasion, suppress insurrection, defend the state after a declaration of war, respond to an act of terrorism, or respond to a natural disaster, the Diversion Impact Statement may be submitted retroactively. Under all other circumstances, the Legislature must receive the Diversion Impact Statement prior introduction concurrent resolution declaring a fiscal emergency, the passage of which requires a two-thirds majority vote.

A fiscal emergency may only be declared if certain economic conditions are met, as determined by the Legislature in statute. If the fiscal emergency declaration before the Legislature can establish such requirements, the Governor must use the composite index of business cycle indicators established pursuant to section 14 of chapter 1 of the laws of 2007.

Justification

The public has a right to expect that the taxes it pays for a specific purpose actually go to that purpose. This constitutional amendment would prohibit the diversion of any dedicated revenue from these funds to a purpose other than their intended use, except in cases of extraordinary circumstance. In such cases, a diversion would require joint action by the Executive and the Legislature.

New York has a number of dedicated funds, often called "lockboxes," that were established to ensure funds were available for key infrastructure projects. These lockboxes include the Dedicated Highway and Bridge Trust Fund (DHBTF) designed to support critical road and bridge needs; the Mass Transportation Operating Assistance (MTOA) Fund and the Mass Transportation Trust Fund to support transit; and the Environmental Protection Fund (EPF) and Regional Greenhouse Gas Initiative (RGGI) fund to support investments to protect the environment, including through water infrastructure and energy efficiency projects.

The state could do a much better job of protecting or "locking" these funds. From 2000 to 2010, more than $3.7 billion was diverted from dedicated State funds to the General Fund.{1} from its inception through fiscal year 2008-09, the DHBTF collected over $33 billion meant for road and bridge repair and capital improvements, but only about $11 billion was spent on capital construction rather than operating or debt service costs.{2} As recently as this April, the 2015-16 Enacted Budget included sweeps of $41 million and $25 million, from the RGGI and EPF, respectively, to the General Fund, with no specific language authorizing its replacement.{3}

Other states have faced this same difficulty, and have "locked their lockboxes." Maryland and Wisconsin have passed constitutional amendments to prevent sweeps of dedicated infrastructure funding.{4} This constitutional amendment would "lock the lockboxes" in New York State.

Legislative history

New Bill.

Fiscal implications

EFFECTIVE DATE : This act shall take effect immediately. {1} Office of the State Comptroller. New York's Deficit Shuffle. Apr, 2010. {2} Id. {3} Office of the State Comptroller. Report on the State Fiscal Year 2015-16 Enacted Budget, Apr, 2015. {4} Council of State Governments, Transportation Trust Funds & Lockbox Protections, Mar. 2015.