NY State Senate Bill 2019-S7622

Senate Bill S7622

2019-2020 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 31, 2020	referred to finance

2019-S7622 (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 2019-2020 Legislative Session:: S7622

2019-S7622 (ACTIVE) - Summary

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

2019-S7622 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S7622       Revised 2/11/2020

SPONSOR: BORRELLO
 
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 by 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 percent-
age 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.

 
EXISTING LAW:

SFL S 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 espe-
cially in good economic times. Such growth has forced the State to take
drastic actions to stabilize; its finances when revenues decline dramat-
ically 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 of 7.86 percent. 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 difficul-
ty.

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 spend-
ing would have totaled $60.0 billion - $17.0 billion lower than actual
results.

 
LEGISLATIVE HISTORY:

2018 5.365 Passed Senate

2017 S.365 Passed Senate

2016 5.5507 Passed Senate

2015 S.5507 Referred to Finance

2014 S.3770 Referred to Rules.

2013 S.3770 Passed Senate

2012 5.716 Passed Senate

2011 S.716 Passed Senate

2010 5.5916 Referred to Finance

2009 5.5916 Referred to Rules

 
FISCAL IMPLICATIONS:

To be determined

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

2019-S7622 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7622
 
                             I N  S E N A T E
 
                             January 31, 2020
                                ___________
 
 Introduced  by Sen. BORRELLO -- read twice and ordered printed, and when
   printed to be committed to the Committee on Finance
 
 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.
   § 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 OR TWO PERCENT, WHICHEVER IS LESS.
   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.
   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-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD14850-01-0

 S. 7622                             2
 
 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.
   § 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.
   § 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.
   § 2. Subdivision 2 of section 92-cc  of  the  state  finance  law,  as
 amended  by section 12-a of part I of chapter 60 of the laws of 2015, is
 amended to read as follows:
   2. Such fund shall have a maximum balance not to exceed [five] TEN per
 centum of the aggregate amount projected to be disbursed from the gener-
 al fund during the fiscal year immediately  following  the  then-current
 fiscal  year.  At  the  request of the director of the budget, the state
 comptroller shall transfer monies to the rainy day reserve  fund  up  to
 and including an amount equivalent to seventy-five one-hundredths of one
 per  centum  of  the aggregate amount projected to be disbursed from the
 general fund during the then-current fiscal year, unless  such  transfer
 would increase the rainy day reserve fund to an amount in excess of five
 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, in which event such transfer shall be limited to such
 amount as will increase the rainy day reserve  fund  to  such  five  per
 centum limitation.
   §  3.  This  act shall take effect on the thirtieth day after it shall
 have become a law.

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