Enacts the "over-expenditure, under-expenditure, transfer notification (OUT) act" to provide for the use of surplus appropriated funds and over-expenditure approval.
TITLE OF BILL: An act to amend the state finance law, in relation to enacting the "over-expenditure, under-expenditure, transfer notification (OUT) act"
PURPOSE: Requires that the Comptroller be immediately notified of any overexpenditure of taxpayer monies and that all leftover funds are allocated to the general fund to pay down debt.
SUMMARY OF PROVISIONS: Section 1: Cites the act as the "over-expenditure, under-expenditure, transfer-notification (OUT) act.
Section 2: Amends the state finance law by adding a new section 53-e.
Section 53-e(1): Defines the terms of "state agencies" and "surplus appropriated funds."
Section 53-e(2): Surplus Appropriated Funds; On April 1st, if a state agency has a surplus of appropriated funds, the Governor, the Comptroller and the Legislature must be notified of the surplus and its amount prior to April 15th. Once notified, the Governor, the Comptroller and the Legislature must act on the surplus before May 31st. These entities may allow the state agency to use the money as they see fit or transfer the funds to another state agency. Any appropriations proposed to transfer surplus funds must first be approved by the Comptroller. Failure to act on the surplus funds will result in the funds being transferred to the General Fund.
Section 53-e(3): All state agencies must notify the Governor, Comptroller and the Legislature if they intend to overspend their budget before taking such an action. The Governor and Legislature may then enact legislation allowing such expenditures. Legislation must be approved by the Comptroller.
Section 3: Allows for the act to take effect immediately.
JUSTIFICATION: Oftentimes, a state agency will have a small amount of money left over at the end of the year and unilaterally go on a last minute spending binge. Pretty soon this impulse spending adds up to big dollars.
The $136.5 billion New York State budget is really an amalgamation of hundreds if not thousands of smaller state agency budgets. In fact: there are more than 70 state agencies, 64 colleges in the State University of New York system and 20 City University of New York campuses. This is on top of the scores of public authorities that have little oversight by the legislature or executive branch. Each of these entities can be divided into smaller agencies, bureaus and departments each with their own little budget.
Oftentimes state agencies fear that if they come in under-budget they'll face steep cuts in funding for the following year. It must be established that State agencies that are fiscally responsible and spend only what they have been authorized to spend should be commended, not penalized.
The O.U.T. (Over-Expenditure/Under-Expenditure/Transfer-Notification) of Debt Act aims to prevent future attempts to empty agency their coffers at the end of the year to justify their budgets. This act would put a check to this practice.
This legislation would require that all leftover funds are allocated to the general fund to pay down debt or reduce the tax burden on our citizens. If state agencies fail to comply, the Comptroller would be mandated to cancel any unapproved over-expenditures/underexpenditures or transfers. State agencies do not need to spend taxpayer money on additional spending for the simple reason that there is still cash in the account.
If it's important enough to spend tax dollars at the last minute then it's important enough to get authorization from the elected officials that actually pass the budget. This is the taxpayers' money and should be returned to help payoff state debt and reduce property taxes.
This bill won't erase New York's deficit on its own, but it will provide the kind of spending transparency the state needs to help get out of debt and save taxpayers from getting fleeced by end-of-year spending sprees.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: This act will take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ S. 3323 A. 5334 2011-2012 Regular Sessions S E N A T E - A S S E M B L Y February 16, 2011 ___________IN SENATE -- Introduced by Sen. BALL -- read twice and ordered printed, and when printed to be committed to the Committee on Finance IN ASSEMBLY -- Introduced by M. of A. TEDISCO -- read once and referred to the Committee on Ways and Means AN ACT to amend the state finance law, in relation to enacting the "over-expenditure, under-expenditure, transfer notification (OUT) act" THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act shall be known and may be cited as the "over-ex- penditure, under-expenditure, transfer notification (OUT) act". S 2. The state finance law is amended by adding a new section 53-e to read as follows: S 53-E. SURPLUS APPROPRIATED FUNDS; OVER-EXPENDITURE APPROVAL. 1. DEFINITIONS. FOR PURPOSES OF THIS SECTION THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS: A. "STATE AGENCY" SHALL MEAN ANY STATE DEPARTMENT, BOARD, BUREAU, DIVISION, COMMISSION, COMMITTEE, PUBLIC AUTHORITY, PUBLIC BENEFIT CORPO- RATION, COUNCIL, OFFICE, OR OTHER GOVERNMENTAL ENTITY PERFORMING A GOVERNMENTAL OR PROPRIETARY FUNCTION FOR THE STATE; AND B. "SURPLUS APPROPRIATED FUNDS" SHALL MEAN THE AMOUNT OF FUNDS APPRO- PRIATED TO A STATE AGENCY IN A FISCAL YEAR REDUCED BY THE TOTAL EXPENDI- TURES BY SUCH STATE AGENCY FOR SUCH FISCAL YEAR, BUT SUCH TERM SHALL ONLY APPLY TO AMOUNTS OF FUNDS GREATER THAN ZERO. 2. SURPLUS APPROPRIATED FUNDS. A. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, ANY STATE AGENCY WHICH ON APRIL FIRST HAS SURPLUS APPROPRIATED FUNDS SHALL, ON OR BEFORE APRIL FIFTEENTH OF SUCH YEAR, NOTIFY THE GOVERNOR, THE COMPTROLLER AND THE LEGISLATURE THAT SUCH AGENCY HAS SURPLUS APPROPRIATED FUNDS AND THE AMOUNT OF SUCH SURPLUS. UPON RECEIPT OF SUCH NOTIFICATION, THE LEGISLATURE AND THE GOVERNOR MAY, ON OR BEFORE MAY THIRTY-FIRST OF SUCH YEAR, ENACT LEGISLATION PROVIDING THAT SUCHEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08870-02-1 S. 3323 2 A. 5334
SURPLUS APPROPRIATED FUNDS MAY BE USED BY SUCH STATE AGENCY OR TRANS- FERRED TO ANOTHER STATE AGENCY OR BOTH. SUCH LEGISLATION SHALL CLEARLY SET FORTH THE PARTICULAR PURPOSE OR PURPOSES FOR WHICH SUCH SURPLUS APPROPRIATED FUNDS SHALL BE USED OR TRANSFERRED. ANY LEGISLATION ENACTED PURSUANT TO THIS SUBDIVISION SHALL CONTAIN A CONDITION THAT SUCH SURPLUS APPROPRIATED FUNDS SHALL NOT BE USED AS SET FORTH IN SUCH LEGISLATION WITHOUT THE APPROVAL OF THE STATE COMPTROLLER. B. ON OR BEFORE JUNE THIRTIETH OF SUCH YEAR, THE COMPTROLLER MAY APPROVE THE USE OR TRANSFER OF FUNDS PROVIDED FOR IN SUBDIVISION TWO OF THIS SECTION. IF THE COMPTROLLER FAILS TO APPROVE SUCH USE OR TRANSFER OF FUNDS BY JUNE THIRTIETH OF SUCH YEAR, SUCH SURPLUS APPROPRIATED FUNDS SHALL BE TRANSFERRED TO THE GENERAL FUND AND SHALL BE USED FOR THE SOLE PURPOSE OF REDUCING DEBT OF THE STATE. C. ANY SURPLUS APPROPRIATED FUNDS FOR WHICH THE LEGISLATURE AND THE GOVERNOR FAIL TO ENACT LEGISLATION PROVIDING FOR THE USE OR TRANSFER OF SUCH FUNDS SHALL BE TRANSFERRED TO THE GENERAL FUND AND SHALL BE USED FOR THE SOLE PURPOSE OF REDUCING DEBT OF THE STATE. 3. OVER-EXPENDITURE APPROVAL. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, ANY STATE AGENCY WHICH FOR ANY REASON INTENDS TO EXPEND FUNDS FOR ANY PURPOSE IN ANY FISCAL YEAR IN AN AMOUNT GREATER THAN AMOUNTS APPRO- PRIATED TO SUCH AGENCY FOR SUCH FISCAL YEAR, SHALL, PRIOR TO SUCH EXPENDITURE, NOTIFY THE GOVERNOR, THE COMPTROLLER AND THE LEGISLATURE REGARDING SUCH INTENTION WITH A DETAILED EXPLANATION OF WHY SUCH EXPEND- ITURE IS NECESSARY. UPON RECEIPT OF SUCH NOTIFICATION, THE LEGISLATURE AND THE GOVERNOR MAY ENACT LEGISLATION PROVIDING FOR AN APPROPRIATION FOR SUCH EXPENDITURE. SUCH LEGISLATION SHALL CLEARLY SET FORTH THE PARTICULAR PURPOSE OR PURPOSES FOR WHICH SUCH APPROPRIATION IS MADE. ANY LEGISLATION ENACTED PURSUANT TO THIS SUBDIVISION SHALL CONTAIN A CONDI- TION THAT SUCH FUNDS SHALL NOT BE APPROPRIATED WITHOUT THE APPROVAL OF THE STATE COMPTROLLER. S 3. This act shall take effect immediately.