BILL NUMBER:A8665

TITLE OF BILL:  An act to temporarily freeze state spending for fiscal
years 2009-2010, 2010-2011 and 2011-2012

PURPOSE OR GENERAL IDEA OF BILL: To enact a temporary freeze on state
spending in order to help New York State reduce its debt.

SUMMARY OF SPECIFIC PROVISIONS: Section 1 states that neither the gover-
nor nor the legislature shall act upon any appropriation bills which
would authorize an increase in total state spending for the fiscal years
2009-2010, 2010-2011 and 2011-2012.

Section 2 allows that an increase in spending can occur in the case of
an emergency. In order to increase spending in excess of the limitation
provided in subdivision one an emergency must be declared by the gover-
nor and such spending must be authorized by a two-thirds vote in both
the Assembly and Senate.

Section 3 mandates that all revenues in excess of the state spending
limitations in these fiscal years shall be deposited into a service fund
used to pay off the state debt.

Section 4 any legislation with fiscal implications passed after the
budget for these fiscal years shall be offset with savings derived from
existing funds and shall not impose additional costs to the state.
              

Section 5a defines "Total state funding" as general funds, special
revenue funds, capital project funds, and debt service funds. It shall
not mean federal funding or federal grants.

Section 5b defines "emergency" as an extraordinary and unexpected occur-
rence which requires immediate and sudden fiscal action of a drastic but
temporary nature.

JUSTIFICATION: This legislation will encourage New York's lawmakers to
be more fiscally responsible and will temporarily freeze state spending
for three years based on the current fiscal year's budget.  This bill
will freeze state spending and use any excesses to pay off state debt.
Future legislation with fiscal implications passed after the budget for
fiscal years 2009 through 2012, shall be offset with savings derived
from existing funds and shall not impose additional costs to the state.
Additional spending will be through pay-as-you-go rules and will allo-
cate funding from existing sources. In any fiscal year, if total state
revenues are in excess of the state spending limitation they shall be
deposited into the debt service fund and shall be used to pay down the
state debt.

In the 2009-2010 budget, state spending increased by $3.9 billion
dollars while revenues were in decline and a $17.9 billion deficit
existed. This level of state spending is unsustainable. Along with
increased spending, various fees were created and taxes were increased.

This activity impacts business and residents of the state.  The NYS
Comptroller has projected the three year budget gap to be $25 billion if
this level of spending persists. NYS currently has the second highest
state and local tax burden in the nation. The level of state spending is
unsustainable. Continuing to increase taxes and fees to pay for larger
and larger state budgets will push people out of New York State, further
burdening the remaining population.

Our New York Slate debt totals more than $52 billion dollars. New York
has the second highest combined state and local debt per capita in the
nation. This debt was accrued over periods of time including 1996
through 2001, during the time when the state had substantial surpluses.
This accumulation of debt is fiscally irresponsible.

Thirty one states have instituted spending caps in various forms to
control spending and taxation.

PRIOR LEGISLATIVE HISTORY: None

FISCAL IMPLICATIONS: None

EFFECTIVE DATE: This act shall take effect immediately.