BILL NUMBER: S5084

SPONSOR: SALAZAR
 
TITLE OF BILL:  An act to amend the tax law, in relation to providing
for a deduction from personal gross income for expenses incurred in the
adoption of a child in the foster care system

 
PURPOSE OR GENERAL IDEA OF THE BILL:

To create incentives to decrease the number of children in foster care
waiting to be adopted; this legislation creates a tax deduction for all
expenses incurred by family adopting children from the foster care
system.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1: Subsection (c) of section 612 of the tax law is amended by
adding a new paragraph 39 which lists income tax deductibles for eligi-
ble families adopting a child in the foster care system.

Section 2: Provides for immediate effective date and shall apply to all
              

taxable years beginning on or after the first of January in the year in
which it shall have become law.

 
JUSTIFICATION:

Currently, New York State has over 23,000 children in custody in its
foster care system. For a large number of these children, returning to
their natural parents is impossible. In 2011, there were over 6,400
foster care children waiting to be adopted and the median years each has
to wait to be adopted is close to 4.5 years.

At an annual cost to New York State of over $33,000 per child in state
custody, it is obvious that New York State government must do more to
create incentives for families interested in adopting a child in the
foster care system. This legislation gives adoptive families an income
tax deduction for all the expenses incurred in such an adoption.

In addition, it is a well understood dynamic that the longer a child is
in the foster care system, the slimmer the chances for adoption.  As
children age in state custody it becomes a negative for them because
families tend to adopt younger children. Therefore New York must do more
to place these children in health, loving and nurturing home environ-
ments. At a total annual cost of over $759 million dollars to maintain
the 23,000 in state custody, it is clearly in the best interest of these
children and to New York taxpayers to create incentives to reduce the
number of children in government custody.

 
PRIOR LEGISLATIVE HISTORY:

Passed Assembly and Senate and Vetoed in 2014 and again in 2015.
Referred to ways and means in 2017-2018.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT:

Currently, New York spends over $33,000 annually for each child in the
foster care system. In 2011, there were over 6,400 foster care children
waiting to be adopted, but only about 7% or 417 children were adopted.
Allowing families to deduct the estimated $2,000 to $10,000 in expenses
incurred to adopt a child reduces the amount paid in taxes to NYS by
less than $600 per each adoption. Obviously, it makes enormous economic
sense to lose $600 per adoption in tax collection by creating incentives
to remove children from state custody at the current yearly cost of over
$33,000 per child.

Based on 2009 total adoptions from the foster care system, which placed
2,100 children with adoptive families, New York State tax collection
would be reduced by about one million dollars. However, with over 17,000
children currently (23,000 children in State custody in 2015), during
any given year, at the stated annual cost per child of over $33,000, the
state will actually achieve savings in excess of the projected decrease
in tax revenue for each child adopted due to the incentives provided in
this legislation.

 
EFFECTIVE DATE:
This bill will take effect immediately.