NY State Senate Bill 2009-S5916

Senate Bill S5916

2009-2010 Legislative Session

Establishes an annual spending growth cap and increases the maximum capacity of the rainy day fund

download bill text pdf

Archive: Last Bill Status - In Senate Committee Finance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to finance
Jun 18, 2009	referred to rules

2009-S5916 (ACTIVE) - Details

Current Committee:: Senate Finance
Law Section:: State Finance Law
Laws Affected:: Add Art 17 §§244 - 246, amd §92-cc, St Fin L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S716
2013-2014: S3770
2015-2016: S5507
2017-2018: S365
2019-2020: S7622
2021-2022: S1756
2023-2024: S681

2009-S5916 (ACTIVE) - Summary

Establishes an annual spending growth cap and increases the maximum capacity of the rainy day fund.

2009-S5916 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S5916

 TITLE OF BILL :

An act to amend the state finance law, in relation to establishing a
spending cap and increasing the maximum capacity of the rainy day fund

 PURPOSE :

This legislation will cap the growth of state spending and increase
the allowable reserve of the rainy day fund.

 SUMMARY OF PROVISIONS :

Section one of the bill would amend the State Finance Law ("SFL") to
add a new Article 17, establishing a state spending cap.

* New SFL § 244 sets for definitions for article 17.

* New SFL § 245 establishes a spending cap, which limits the growth of
state operating funds spending to no more than the average rate of
inflation of the three previous calendar years. In addition, the
section requires the governor to certify that the executive budget is
consistent with the cap and the comptroller will provide, within five
days of action by the Legislature upon the budget, a determination as
to whether the state budget as enacted exceeds the annual spending

growth cap. Finally, the section provides that if the Comptroller
finds that the state budget as enacted exceeds the annual spending
growth cap, the Governor must take corrective action, such as a veto,
reducing state agency spending within the control of the Executive or
working with the Legislature to enact spending reductions, to ensure
that funding is limited to the amount of the annual spending cap.

* New SFL § 246 provides that upon a finding of an emergency by the
Governor, he or she may declare an emergency b executive order. Based
upon such declaration, the Governor may submit and the Legislature may
authorize by a two-thirds super majority a budget containing a
percentage increase in state operating fund spending over the prior
fiscal year that exceeds the annual spending growth cap.

Section 2 of the bill would increase the maximum capacity of the
state's rainy day reserve from 3 percent of General Fund spending to
10 percent of General Fund spending.

Section 3 would make the act effective immediately.

 EXISTING LAW :

SFL §92-cc (2) establishes a maximum balance in the rainy day reserve
fund of three percent of the aggregate amount projected to be
disbursed annually from the General Fund.

 JUSTIFICATION :

State government spending has grown substantially in recent years -
especially in good economic times. Such growth has forced the State to
take drastic actions to stabilize its finances when revenues decline
dramatically during periods of economic difficulty.

For example, from 2002-03 to 2007-08, State Operating Funds spending
grew from $52.8 billion to $77.0 billion -- an average annual rate
of7.86 percent. In great part due to this dramatic expansion in
spending, the State needed to address a nearly $20.1 billion deficit
during last year's budget process.


To end this pattern of boom and bust cycle budgeting, and impose
greater fiscal discipline on state government, this legislation would
enact a strict cap limiting the growth of State Operating Funds
spending. It also significantly increases the maximum capacity of the
State's rainy day reserve so that surpluses that accrue as a result of
this cap can be used to help address revenue declines during times of
economic difficulty.

If the cap proposed in this legislation had been in place from 2002-03
to 2007-08, average annual spending growth during that period would
have averaged 2.6 percent. Additionally, 2007-08 State Operating Funds
spending would have totaled $60.0 billion - $17.0 billion lower than
actual results.

 LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

In 2010-11, it is expected that the cap would limit State Operating
Funds spending to no greater than $80.4 billion, which reflects an
increase of $1.7 billion or 2.1 percent from the prior year.  This
capped spending level would be $2.2 billion below the most recent
current law estimates of State Operating Funds spending for 2010-11
($82.6 billion, an increase of $3.9 billion of 5.0%) projected in the
Division of the Budget's financial plan.

 LOCAL FISCAL IMPLICATIONS :

The fiscal impact on local governments would depend upon policy
choices made during the budget process in order to comply with the
cap.

 EFFECTIVE DATE :
30 days after it shall have become law.

2009-S5916 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5916

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 18, 2009
                               ___________

Introduced  by  Sen.  ROBACH -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the state finance law, in  relation  to  establishing  a
  spending cap and increasing the maximum capacity of the rainy day fund

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The state finance law is amended by adding a new article 17
to read as follows:
                               ARTICLE 17
                     ANNUAL SPENDING GROWTH CAP ACT
SECTION 244. DEFINITIONS.
        245. ESTABLISHMENT OF ANNUAL SPENDING GROWTH CAP.
        246. PROVISIONS REGARDING DECLARATION OF EMERGENCY.
  S 244. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS, UNLESS OTHERWISE SPECIFIED:
  1. "ANNUAL SPENDING GROWTH CAP" SHALL MEAN A PERCENTAGE DETERMINED  BY
ADDING  THE  INFLATION RATES FROM EACH OF THE THREE CALENDAR YEARS IMME-
DIATELY PRIOR TO THE COMMENCEMENT OF A GIVEN FISCAL YEAR AND THEN DIVID-
ING THAT SUM BY THREE.
  2. "STATE OPERATING FUNDS SPENDING" SHALL MEAN ANNUAL DISBURSEMENTS OF
ALL GOVERNMENTAL FUND TYPES INCLUDED IN THE CASH-BASIS FINANCIAL PLAN OF
THE STATE,  EXCLUDING  DISBURSEMENTS  FROM  FEDERAL  FUNDS  AND  CAPITAL
PROJECT FUNDS.
  3.   "INFLATION   RATE"  SHALL  MEAN  THE  PERCENTAGE  CHANGE  IN  THE
TWELVE-MONTH AVERAGE OF THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS
AS PUBLISHED BY THE UNITED STATES DEPARTMENT OF LABOR, BUREAU  OF  LABOR
STATISTICS OR ANY SUCCESSOR AGENCY FOR A GIVEN CALENDAR YEAR COMPARED TO
THE PRIOR CALENDAR YEAR.
  4.  "EXECUTIVE BUDGET" SHALL MEAN THE BUDGET SUBMITTED ANNUALLY BY THE
GOVERNOR  PURSUANT  TO SECTION ONE OF ARTICLE VII OF THE STATE CONSTITU-
TION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14378-01-9

S. 5916                             2

  5.  "STATE BUDGET AS ENACTED" SHALL MEAN THE BUDGET ACTED UPON BY  THE
LEGISLATURE  IN A GIVEN FISCAL YEAR, AS SUBJECT TO SECTION FOUR OF ARTI-
CLE VII OF THE STATE CONSTITUTION AND SECTION SEVEN OF ARTICLE IV OF THE
STATE CONSTITUTION.
  6.  "EMERGENCY" SHALL MEAN AN EXTRAORDINARY, UNFORESEEN, OR UNEXPECTED
OCCURRENCE, OR COMBINATION OF CIRCUMSTANCES, INCLUDING BUT  NOT  LIMITED
TO A NATURAL DISASTER, INVASION, TERRORIST ATTACK, OR ECONOMIC CALAMITY.
  S 245. ESTABLISHMENT OF ANNUAL SPENDING GROWTH CAP.  1. THERE IS HERE-
BY ESTABLISHED AN ANNUAL SPENDING GROWTH CAP.
  2.  THE  GOVERNOR  SHALL NOT SUBMIT, AND THE LEGISLATURE SHALL 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.
  3. THE GOVERNOR SHALL 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.
  4.  THE  COMPTROLLER  SHALL 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 CAP.
  5. 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 SHALL TAKE CORRECTIVE ACTION TO ENSURE THAT FUNDING IS
LIMITED TO THE AMOUNT OF THE ANNUAL SPENDING CAP.
  S 246. PROVISIONS REGARDING DECLARATION OF EMERGENCY.  1. UPON A FIND-
ING  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  DECLA-
RATION.
  2.  BASED  UPON  SUCH  DECLARATION,  THE  GOVERNOR MAY SUBMIT, AND THE
LEGISLATURE MAY AUTHORIZE,  BY  A  TWO-THIRDS  SUPERMAJORITY,  A  BUDGET
CONTAINING  A  PERCENTAGE  INCREASE  OVER THE PRIOR FISCAL YEAR IN STATE
OPERATING FUNDS SPENDING THAT EXCEEDS THE ANNUAL SPENDING GROWTH CAP.
  S 2. Subdivision 2 of section 92-cc of the state finance law, as added
by chapter 1 of the laws of 2007, is amended to read as follows:
  2. Such fund shall have a maximum balance not to  exceed  [three]  TEN
per  centum  of  the aggregate amount projected to be disbursed from the
general fund during the fiscal year immediately following the  then-cur-
rent fiscal year.
  S  3.  This  act shall take effect on the thirtieth day after it shall
have become a law.

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