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Originally published: March 28, 2018

Issues Recommendations to Improve Transparency and Deter Corruption

Today, Citizens Union released Spending in the Shadows: Nonspecific Funding in the FY 2019 New York State Executive Budget. This report examines some of the State funds in this year’s Executive Budget that have neither a specific purpose nor oversight. The report explains that the Governor’s proposed budget contains at least $11.7 billion in opaque funds. Unlike many budget items which contain narrow instructions for spending and oversight, there is no criteria for spending these funds, no indication of who controls these funding decisions, and few reporting requirements. This nonspecific funding invites misuse and corruption and raises serious concerns about the integrity of State spending.

The $11.7 billion in unaccountable funding identified in the report is comprised of:

  • $2.1 billion where individual elected officials control spending decisions with little constraint or public oversight; and
  • $9.6 billion for economic development or infrastructure which lack spending criteria and accountability.

The report also identifies other types of government funding outside of the budget without sufficient oversight. These include revenue from public authorities, monetary settlement proceeds, emergency response funds, and tax incentives. Although these are not budget appropriations, they amount to billions of dollars that have a major fiscal impact on the State.

This lack of accountability enables corruption in Albany. During the first half of 2018, every month features a trial of one or more government officials on corruption-related charges. Former legislative leaders Dean Skelos and Sheldon Silver were both indicted on corruption charges related to their control over opaque State funds. The recent conviction of Joseph Percoco, a former top aide to the governor, also related to his involvement in State spending decisions.

Citizens Union Executive Director Betsy Gotbaum said, “The State budget leaves taxpayers in the dark about how billions of dollars of their money will be spent. Transparency is needed to deter corruption and ensure accountability.”

Citizens Union recommends the Governor and Legislature:

  1. Publicly post comprehensive information regarding the distribution of nonspecific lump sum funds, including criteria for spending and which officials requested the spending.
  2. Amend the State Finance Law to require that elected officials who seek to make awards from lump-sum appropriations or reappropriations affirm that the expenditures are for a lawful public purpose, without personal financial benefit or any conflict of interest.
  3. Require comprehensive online disclosure of all grants and contracts awarded under nonspecific lump-sum appropriations and reappropriations.
  4. Enact legislation to limit contributions by persons and entities doing business with the State.
  5. Create public disclosure by allowing budget bills to age for three days.
Read the full report and Executive Summary here.
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