DiNapoli Releases Fiscal Reform Plan

New York State Comptroller Thomas P. DiNapoli, up for reelection this year, has proposed a series of actions intended to repair New York’s recurring budget problems and out-year budget gaps by requiring the state to address out-year budget gaps and attain multi-year budget balance, align spending with available resources, limit debt and curb the use of what he referred to as "fiscal gimmicks."

According to a statement from his office, DiNapoli’s plan includes:

• Gap-closing efforts: It would require the governor to identify actions to close the out-year gaps as part of the state’s Financial Plan. For example, Dinapoli's statement said, the current proposed budget only addresses next year’s projected budget gap, but it does little to address three-year cumulative gaps of at least $30 billion.
• The institution of a binding revenue forecast: Current state law requires the governor and legislature to agree on a revenue forecast of expected tax revenues by March 1. Absent an agreement, the comptroller provides a non-binding forecast by March 5. DiNapoli’s proposal would expand the forecast to include all revenues and resources available for spending to provide a more accurate picture of available means, and would set a binding framework to the budget. If the parties could not agree, the comptroller’s revenue forecast would be binding.
• Plans to increase reserves: In any year in which the state incurs a surplus, 50 percent of the surplus would have to be paid into the Rainy Day Fund until it reaches the maximum level of five percent of General Fund spending. Currently, these deposits are restricted to just 0.2 percent of annual General Fund spending with the maximum balance capped at 2.0 percent of General Fund spending.
• Restrictions on the use of "one-shots": It would prohibit the use of one-shots to pay for ongoing expenses. One-time revenues could only be used to pay down debt or finance non-recurring expenses, such as emergency or capital spending. The state has repeatedly paid for recurring spending with one-time revenues, or "one-shots."
• Public negotiation of the budget: DiNapoli’s proposal would require joint legislative conference committees to meet publicly to negotiate the budget and give a greater voice to individual legislators in forming the final budget. Currently, budget conference committees rarely meet and there is no requirement for public budget deliberations and discussions.

In addition, the proposal includes plans to strengthen capital planning, debt reform through the use of binding caps and efforts to make the budget and its process more transparent.