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

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S716-2011 Actions

• May 31, 2012: referred to ways and means
• May 30, 2012: DELIVERED TO ASSEMBLY
• May 30, 2012: PASSED SENATE
• Mar 12, 2012: ADVANCED TO THIRD READING
• Mar 7, 2012: 2ND REPORT CAL.
• Mar 6, 2012: 1ST REPORT CAL.299
• Jan 4, 2012: REFERRED TO FINANCE
• Jan 4, 2012: returned to senate
• Jan 4, 2012: died in assembly
• Jun 14, 2011: referred to ways and means
• Jun 14, 2011: DELIVERED TO ASSEMBLY
• Jun 14, 2011: PASSED SENATE
• May 18, 2011: ADVANCED TO THIRD READING
• May 17, 2011: 2ND REPORT CAL.
• May 16, 2011: 1ST REPORT CAL.651
• Jan 5, 2011: REFERRED TO FINANCE

S716-2011 Meetings

Finance: Mar 6, 2012, Finance: May 17, 2011

S716-2011 Calendars

Active List: Mar 13, 2012 , Active List: May 30, 2012 , Active List: Jun 14, 2011 , Floor Calendar: Mar 7, 2012 , Floor Calendar: Mar 12, 2012 , Floor Calendar: Mar 13, 2012 , Floor Calendar: Mar 14, 2012 , Floor Calendar: Mar 15, 2012 , Floor Calendar: Mar 19, 2012 , Floor Calendar: Mar 20, 2012 , Floor Calendar: Mar 21, 2012 , Floor Calendar: Mar 22, 2012 , Floor Calendar: Mar 26, 2012 , Floor Calendar: Mar 27, 2012 , Floor Calendar: Mar 28, 2012 , Floor Calendar: Mar 29, 2012 , Floor Calendar: Mar 30, 2012 , Floor Calendar: Apr 17, 2012 , Floor Calendar: Apr 18, 2012 , Floor Calendar: Apr 19, 2012 , Floor Calendar: Apr 25, 2012 , Floor Calendar: Apr 26, 2012 , Floor Calendar: Apr 30, 2012 , Floor Calendar: May 1, 2012 , Floor Calendar: May 2, 2012 , Floor Calendar: May 7, 2012 , Floor Calendar: May 8, 2012 , Floor Calendar: May 9, 2012 , Floor Calendar: May 14, 2012 , Floor Calendar: May 15, 2012 , Floor Calendar: May 16, 2012 , Floor Calendar: May 17, 2011 , Floor Calendar: May 18, 2011 , Floor Calendar: May 21, 2012 , Floor Calendar: May 22, 2012 , Floor Calendar: May 23, 2011 , Floor Calendar: May 23, 2012 , Floor Calendar: May 24, 2011 , Floor Calendar: May 25, 2011 , Floor Calendar: May 30, 2012 , Floor Calendar: Jun 1, 2011 , Floor Calendar: Jun 2, 2011 , Floor Calendar: Jun 6, 2011 , Floor Calendar: Jun 7, 2011 , Floor Calendar: Jun 13, 2011 , Floor Calendar: Jun 14, 2011

S716-2011 Votes

S716-2011 Memo

BILL NUMBER:S716

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 b 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
percentage 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 immediately.

EXISTING LAW:
SFL �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
especially in good economic times. Such growth has forced the State
to take drastic actions to stabilize its finances when revenues


decline dramatically 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
of7.86 percent. In great part due to this dramatic expansion in
spending, the State needed to address a nearly $20.1 billion deficit
during last year's budget process.

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 difficulty.

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

LEGISLATIVE HISTORY:
2010 Referred to Finance

FISCAL IMPLICATIONS:
In 2010-11, it is expected that the cap would limit State Operating
Funds spending to no greater than $80.4 billion, which reflects an
increase of $1.7 billion or 2.1 percent from the prior year. This
capped spending level would be $2.2 billion below the most recent
current law estimates of State Operating Funds spending for 2010-11
($82.6 billion, an increase of $3.9 billion of 5.0%) projected in the
Division of the Budget's financial plan.

LOCAL FISCAL IMPLICATIONS:
The fiscal impact on local governments would depend upon policy
choices made during the budget process in order to comply with the cap.

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

S716-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                     716

                         2011-2012 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 5, 2011
                                 ___________

  Introduced  by  Sen.  ROBACH -- 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.
    S 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.
    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.

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD01943-01-1

 S. 716                              2

    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-
  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.
    S 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.
    S 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.
    S 2. Subdivision 2 of section 92-cc of the state finance law, as added
  by chapter 1 of the laws of 2007, is amended to read as follows:

    2. Such fund shall have a maximum balance not to  exceed  [three]  TEN
  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.
    S  3.  This  act shall take effect on the thirtieth day after it shall
  have become a law.