Assembly Democrat proposes repeal of outside income limits
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Less than five years after passing outside income limits for state lawmakers, at least one Assembly Democrat has buyer's remorse.
Assemblyman Clyde Vanel, D-Queens Village, has introduced legislation (A.11733) this week that would repeal the 2022 outside income limits passed by the state Legislature in 2022. The limits took effect in 2025, but enforcement is supposed to begin on Jan. 1, 2027.
The 2022 legislation (S9617/A10730) created new pay and income rules for lawmakers, raising their annual pay to $142,000 while capping extra earnings from fees or services to $35,000 a year, a number taken from the existing cap on income for retired individuals in public service. The law covers wages, fees, and other payments for services lawmakers perform outside of their official work, with exemptions for earnings from state pay, military service, royalties, pensions, investments, family business earnings, or pay from before January 2025 or before taking office.
The law also included forfeiture of a lawmakers' state salary if they violated the outside earnings cap as well as the loss of their vote in the legislature. A judge ruled the loss of voting privileges was unconstitutional.
Vanel said the 2022 legislation is intended to prevent corruption and conflict of interest, but wrote in his legislative justification for A.11733 that the income cap is the wrong way to achieve those goals.
"But every legislator, like any person, can face unforeseen circumstances that even a $142,000 salary plus $35,000 in permitted outside income cannot cover," Vanel wrote in his legislative justification. "These include uninsured medical costs; child care, which members must arrange while commuting to Albany for roughly six months of every year and carrying out legislative duties in their districts for the rest of it (center-based infant care in New York averaged $20,439 per year in 2024, and $37,783 for an infant and a four-year-old); legal judgments; uninsured casualty losses; the death of a loved one; home care for a family member; tuition; mortgage payments and potential foreclosure; legal fees; loan repayments; credit card debt; and more. Section 5-b makes no provision for any of this. It treats a relatively high salary as if it guarantees financial stability. It does not."
Vanel said in his legislative justification that the outside income cap could lead elected officials into corruption and conflicts of interest because the state's $175,000 income limit for the Assembly and Senate can result in lawmakers going into debt and being in financial need. He cited a Massachusetts case in which an auditor testified that Massachusetts House Speaker Salvatore DiMasi sank into deep debt after becoming speaker, having lost much of his law-practice income when he took the post, and prosecutors argued that those money problems drove a $65,000 kick-back scheme. Similar cases have happened in Alabama and Michigan, Vanel said.
What's more, Vanel said the outside income cap wouldn't have prevented the cases in Massachusetts, Alabama, Michigan or California, which all involved bribes, kickbacks, no-show jobs and theft. He said the outside income cap also likely wouldn't have stopped a long line of New York corruption cases that include former Assembly Speaker Sheldon Silver, who was accused of using his office to trade favors for millions of dollars in kickbacks. Other lawmakers charged in the 2000s include:
– Sen. Malcolm Smith, a former Democratic Senate leader, was accused of authorizing $200,000 in bribes to scheme his way onto the New York City mayoral ballot line as a Republican to avoid a crowded Democratic primary. Smith was convicted in 2015 of conspiracy, bribery and other charges.
– Sen. Thomas Libous, a terminally ill former deputy majority leader was convicted in 2015 of lying to the FBI about arranging a $150,000 law firm job for his son. Prosecutors did not seek prison time for the Binghamton Republican because he has cancer.
– Rep. William Boyland Jr., a former Democratic assemblyman from Brooklyn who was convicted in a sting of taking bribes from a carnival promoter and two undercover FBI agents posing as real estate investors.
– Rep. Eric Stevenson, a former Democratic state assemblyman from the Bronx who was sentenced in 2014 after being convicted of accepting $22,000 in bribes from businessmen.
– Senator Pedro Espada, a Bronx Democrat and one-time Senate majority leader who pleaded guilty to tax fraud charges and was sentenced in 2013. He had been accused of looting taxpayer-subsidized clinics to pay for children's pony rides and other extravagances. Espada operated the clinics in the South Bronx for three decades.
– Sen. Nicholas Spano, a Yonkers Republican who admitted in 2012 that he underpaid his income taxes by $53,000.
– Sen. Vincent Liebell, a Putnam County Republican and 28-year legislative veteran who admitted evading taxes and trying to influence a grand jury. He was sentenced in 2011. He said he failed to report $43,000 in kickbacks from attorneys who did business with a not-for-profit organization he founded.
"First, the cap would not have prevented the conduct in the above referenced corruption cases. None of the cases named – and none of the New York scandals that prompted the dap – involved lawful outside earned income," Vanel said. "They involved bribes, kickbacks, no-show jobs, and theft, all of which were already crimes and all of which were prosecuted and punished under existing law."
Vanel argued the state shouldn't simply limit income but target income tied to improper conduct. He noted that a legislator can earn income up to $35,000 from a company that lobbies the legislature as long as the work isn't connected to a specific bill while the same legislator can't earn more than $35,000 as a weekend nurse or professor. He also criticized the statute's exclusion of investment income, capital gains and passive income from the outside earnings cap as favoring independently wealthy lawmakers at the expense of working legislators.
State Sen. George Borrello, R-Sunset Bay, was among the Republicans who opposed the outside income ban in 2022 and has remained critical in the years since. Borrello said the outside income limit would discourage many from public service while creating a permanent legislative class. He also feared it would drive some legislators from office because they didn’t want to give up the outside income. Some of Borrello's fears are being repeated by Vanel.
According to court filings in the litigation over the cap, roughly 38 members (26 in the Assembly and 12 in the Senate) had outside income exceeding it as of 2025.
"Every one of them had been elected or re-elected with that income publicly disclosed in detail, and the voters elected them anyway. To the sponsor’s knowledge, none has been investigated, censured, removed from office, or prosecuted in relation to that income. It should come as no surprise that our existing anti-corruption laws already work and deter unlawful activity," Vanel wrote. "Over time, this cap will turn the Legislature into one composed of the independently wealthy. It will remove the healthcare professionals, teachers, farmers, tradespeople, small-business owners, and practicing professionals whose outside experience is a strength of our representative body."