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Borrello Backs Bill Capping Spending Growth

State Sen. George Borrello, R-Sunset Bay, is sponsoring legislation establishing an annual state spending growth cap and increasing the maximum capacity of the state’s rainy day fund.

The legislation, S.7622, has been introduced in the 2011-12, 2013-14, 2015-16, 2017-18 and now in the 2019-20 legislative sessions.It passed the state Senate several times previously when the Senate had a Republican majority but never passed the state Assembly.

Borrello’s version of the legislation includes several changes to previous versions, including limiting 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, with the state Comptroller providing within five days of action by the state Legislature upon the budget, a determination as to whether the state budget as enacted exceeds the annual spending growth cap. If the comptroller finds that the state budget as enacted exceeds the annual spending growth cap, the Governor would be directed to take corrective action, such as a veto, reducing state agency spending within the control of the Executive or working with the legislature to cut spending so that it ends up below the cap.

S.7622 also provides that upon a finding of an emergency order by the governor, the governor can submit and the legislature can approve a budget, with a two-thirds super majority vote, that exceeds the state spending cap. The bill also increases the maximum capacity of the state’s rainy day reserve from 3 percent of General Fund spending to 10 percent of General Fund spending.

Borrello wrote that if the cap proposed in his 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 billion, $17 billion less than the state actually spent.

“State government spending has grown substantially in recent years especially in good economic times,” Borrello wrote in his legislative justification. “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 of 7.86%. 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.”

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