A11187 Summary:

SAME ASNo same as
COSPNSRMirones, Quinn, Sayward, Raia, Townsend, Errigo, Giglio, Kolb, Finch, Walker, Stephens
MLTSPNSRBacalles, McDonough
Add Art 7 S7-a, Constn
Limits state spending, excluding the disbursement of proceeds from bonds, bond anticipation notes and federal grants, to the amount expended in the previous year plus an amount equal to inflation.
Go to top    

A11187 Actions:

05/02/2006referred to ways and means
05/09/2006to attorney-general for opinion
06/02/2006opinion referred to judiciary
Go to top

A11187 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
  TITLE OF BILL: CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY proposing an amendment to article 7 of the constitution, in relation to limiting the amount of revenue to be retained by New York state   PURPOSE OR GENERAL IDEA OF BILL: To control the growth of state spend- ing, and ease the tax burden on New York residents.   SUMMARY OF SPECIFIC PROVISIONS: The Taxpayer Relief Act sets a limit on the increase in state spending in any given fiscal year to be equal to the previous year's spending plus inflation and growth in entitlement programs. Any revenue generated in excess of the spending limit is to be refunded/utilized in the following manner: 1/3 shall be refunded direct- ly to all state income tax filers annually in the form of a refund check, 1/3 shall be deposited into a contingency fund to be used in years of revenue shortfalls and 1/3 shall be used to reduce the state's outstanding debt. If the Legislature sees fit to increase spending in any given year, it may do so with a 2/3 supermajority vote in both houses.   JUSTIFICATION: High taxes, spending and borrowing in New York are widely recognized as significant obstacles to stronger economic growth, especially for Upstate communities whose natural competitors are lower- cost regions in the Midwest and Southeast. As of 2004, New York ranked number one in state and local tax burden, at 29 percent above the national average. Additionally, New York State spends more per capita than any other state except Alaska, at just over $6,200 for every man, woman, and child in the state. And New York has the second highest debt load ($140 billion) of any state in the country. To address the high cost of state government, 27 other states have enacted Tax and/or Expenditure Limitations (TEL), 18 of which have been constitutionally ratified. A TEL serves to cap state spending from year to year with adjustments for inflation, population growth, and/or increased revenue. New York State has no such limitation. The Taxpayer Relief Act aims to constitutionally limit state spending and slow the overall growth of government. Annual spending would be restricted to the previous year's expenditures plus inflation and growth in entitlements. It earmarks revenues in excess of the spending cap for three distinct purposes: 1. 1/3 is returned to New York State income tax filers annually in the form of a refund check. 2. 1/3 is deposited into a contingency fund designed to be replenished during years of economic prosperity and tapped during years of severe revenue decreases as a mechanism to allow expenditures to keep in line with the baseline spending cap without going into further debt or cutting essential services. 3. 1/3 is used to pay off New York State's debt. The Taxpayer Relief Act builds on and enhances the tax and expenditure limitations of other states. Colorado enacted the nation's very first taxpayer bill of rights in 1992. Since that time, Colorado has experi- enced times of economic recession and lower revenues which lowered the spending limit and handcuffed state government. The state also experi- enced periods of great economic prosperity when millions of dollars were refunded directly to its taxpayers without precautions in place to make sure the state could effectively manage itself when the economy slowed down. When revenues were down, the spending cap was too low to allow for the proper operation of government, and when revenues were up, the task of reserving funds for future revenue shortfalls was forgone. The Taxpayer Relief Act is crafted with provisions to safeguard the state from these pitfalls. It establishes a contingency fund to supple- ment revenues during down years and allows for expenditures in excess of the spending limit with a supermajority vote of both houses of the legislature. It further allows for entitlement spending to be accounted for in the baseline, ensuring New York's residents will continue to receive their constitutionally guaranteed services. Between 1995 and 2005, New York's State tax receipts grew by 42 percent. If the budget had been subject to these limits, spending growth financed by these taxes would have been capped at 27 percent. The cumulative savings over the past 10 years would have been nearly $23 billion. That $23 billion would have substantially reduced New York's debt, created a fund to safeguard New York from severe economic down- turns and returned a substantial amount of money to the pockets of hard working New Yorkers. When implemented, the Taxpayer Relief Act will have a significant posi- tive impact on limiting state spending, slowing down overall government growth and alleviating the tax burden on its citizenry.   FISCAL IMPLICATIONS: This reform will save state taxpayers billions of dollars once state spending is brought under control.   EFFECTIVE DATE: Upon the approval of two successive Legislatures and subsequently by the voters, the provisions of this bill can be in effect as early as SFY 2008.
Go to top

A11187 Text:

                STATE OF NEW YORK
                   IN ASSEMBLY
                                       May 2, 2006
        Introduced  by M. of A. BROWN -- read once and referred to the Committee
          on Ways and Means
        proposing an amendment to article 7 of the constitution, in relation  to
          limiting the amount of revenue to be retained by New York state
     1    Section  1.  Resolved  (if  the  Senate concur), That article 7 of the

     2  constitution be amended by adding a new section 7-a to read as follows:
     3    § 7-a. This section shall be known as the "taxpayer  relief  act".  1.
     4  All  provisions  of  this  section shall supersede any conflicting state
     5  constitutional, state  statutory,  charter,  or  other  state  or  local
     6  provisions.
     7    2. For purposes of this section:
     8    a.  "Total  state spending" shall mean total annual disbursements from
     9  all governmental fund types included in the cash-basis financial plan of
    10  New York state, excluding the disbursement of the  proceeds  of  general
    11  obligation bonds and bond anticipation notes authorized by the voters of
    12  the  state and issued by the state comptroller pursuant to section 10 or

    13  11 of this article and excluding  the  disbursement  of  federal  grants
    14  received by the state of New York.
    15    b.  "Inflation"  shall mean the average of the percentage changes, for
    16  all regions of New York state, in the  United  States  bureau  of  labor
    17  statistics consumer price index or its successor index.
    18    3.  The governor shall not submit any appropriation bill or bills, nor
    19  shall the legislature act upon any such appropriation  bill  or  supple-
    20  mental  appropriation  bill or bills for the support of government which
    21  authorize total state spending for any fiscal year which is in excess of
    22  the total state spending for the immediately preceding fiscal year  plus
    23  inflation, with the following exceptions:

    24    a.  in  the  case  of  services, programs and entitlements for which a
    25  greater number of persons are entitled than in the  immediate  preceding
    26  fiscal  year, total state spending may exceed the limitation established
    27  in this section by a percentage equal to the percentage of  increase  in
    28  number of persons;
    29    b.  in  which the spending limitations established in this section may
    30  be exceeded upon a two-thirds vote of the legislature.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 11187                            2

     1    4. Nothing in this section shall prevent the governor from  submitting
     2  or  the  legislature from acting upon any appropriation bills or supple-
     3  mental appropriation bills for the support of government which authorize
     4  total state spending in an amount less than that authorized by the limi-
     5  tation established in this section.
     6    5.  If revenue from all sources not excluded from total state spending
     7  exceeds the limitation established in this section,  the  excess  monies
     8  shall be distributed as follows:
     9    a.  One-third  as a direct tax refund to all persons filing income tax
    10  returns, in equal amounts.
    11    b. One-third as repayment to reduce the state indebtedness.

    12    c. One-third to a contingency fund, to be  held  in  interest  bearing
    13  accounts to be tapped into in the event of a revenue shortfall.
    14    §  2. Resolved (if the Senate concur), That the foregoing amendment be
    15  referred to the first regular legislative session  convening  after  the
    16  next  succeeding  general  election  of members of the assembly, and, in
    17  conformity with  section  1  of  article  19  of  the  constitution,  be
    18  published for 3 months previous to the time of such election.
Go to top