Senate Republicans Push to Put Lid on State Spending

Dean G. Skelos

April 03, 2009

In an effort to put the brakes on runaway state spending and taxes, Senate Republicans today proposed an amendment to the state budget that would put in place a constitutional state spending cap. The Senate has previously passed the spending cap plan with bipartisan support, yet today Senate Democrats changed their position and voted unanimously against it.

“The spending cap is needed more than ever because of the $12 billion increase in spending and $8 billion in new and higher taxes included in the 2009-10 state budget,” Senator Michael Ranzenhofer (R-C-I, Amherst) said. “The spending in this budget is simply unsustainable. The unchecked growth in spending has resulted in New York having the highest tax burden in the nation. When you consider that the federal stimulus money will run out in two years, we could be looking at even more tax hikes down the road if we don’t act to limit state spending.”

The Republican proposal would enact a constitutional spending cap that would limit year-to-year State spending increases to no more than four percent and force both houses of the Legislature and Governor to live within its means.
If spending growth was constitutionally capped as late as 1998-99, today’s 2009-10 state funds budget Executive Budget would be less than $68 billion, creating a multi-billion dollar surplus, rather than the current multi-billion dollar deficit.

Under the Senate proposal, year-to-year State spending increases would be limited to 120 percent of the Consumer Price Index (CPI) or 4 percent, whichever is less. In any given year, fifty percent of tax revenue that exceeded the cap would be placed in a reserve fund and fifty percent would be returned to taxpayers in the form of direct tax rebates.

In addition, the amendment would force the Executive to resubmit a balanced Budget to address any shortfalls in revenue that occur after the submission of the Executive Budget, and make any necessary spending revisions to reflect the declining revenue.

“This cap would slam the door on massive increases in State spending and hold a Governor accountable for maintaining a balanced budget,” said Senate Republican Leader Dean Skelos. The family budget is more important than the State Budget, and we have to stand up to protect taxpayers from being taxed out of this state.”

The constitutional spending cap proposal would give the Executive the authority to exceed the cap in the event of a fiscal emergency or other extraordinary circumstances, however, the Comptroller would be required to independently certify the financial crisis.

According to a 2007 report by the National Conference of State Legislatures, thirty states have put in place statutory or constitutional tax or spending limits. New York continues to rank at or near the top in combined state and local tax burden, further illustrating the need to enact a spending cap.