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Originally Published: April 17, 2015

$2.9 Billion in Spending is Still Unaccounted for in Spite of Broader Ethics Push

Community Projects Fund Totals $350 Million Even With Vetoes

In an addendum to its report released last month, Spending in the Shadows: Discretionary Funding in the NYS Budget, Citizens Union finds that the recently enacted FY 2016 state budget of $142 billion contains $2.9 billion in opaque “lump sum funds,” which allow spending decisions to be made in the shadows by elected officials after the budget is passed. This represents an increase of $303 million from the $2.6 billion proposed in the executive budget.

The $2.9 billion in lump sum funds will be distributed through 95 separate pots, 30 more than the 65 proposed in the executive budget. The Governor, Assembly, Senate and Attorney General each have considerable amounts of lump sum funds available for their use in the FY 2016 (some of these funds below are jointly distributed; therefore overlap between parties but in total add up to $2.9 billion):

  • $2.3 billion for the Governor;
  • $1.2 billion for the Senate;
  • $989 million for the Assembly; and
  • $82 million for the Attorney General.

Nearly all additions were made in the Aid to Localities Budget, which now contains $465 million in lump sum funds. This is almost five times as much as the $96 million first proposed in the executive budget in January, with 14 brand new pots totalling $70 million beyond those proposed by the governor.

In addition to the $2.9 billion, the final budget reappropriates $350 million in old Community Projects Fund items. Continuing a troubling trend, $330 million of the Community Project Fund reappropriations are unitemized.  The fund also continues to fund controversial non-profits. For example, $285,336 went to the Ridgewood Bushwick Senior Citizens Council, former Assemblymember Vito Lopez’s power base. The Governor vetoed only $2.4 million in old Community Projects Fund items.

“More than ever, spending decisions must be made more transparent as an integral part of the comprehensive ethics reforms that New Yorkers deserve,” said Dick Dadey, Executive Director of Citizens Union. “As long as lump sum and discretionary funds persist that are unaccountable and spent in the shadows, there is a risk of corruption.”

“The process for passage of this year’s state budget was far from ideal, and the process of distributing lump sum funds after budget bills are passed is even more opaque,” said Rachael Fauss, Director of Public Policy and author of the report. “Comprehensive, online disclosure of all lump sums, their recipients, detailed purposes, and elected officials sponsoring the items is essential to increase public confidence in our state’s spending decisions.”

The continued existence of these opaque funds points to the need for greater disclosure.  Reforms proposed by the Governor in February, which would have increased disclosure and vetting for conflicts of interest on certain legislative lump sums, were stripped out of the enacted budget entirely. Former Speaker Sheldon Silver was charged with personally directing $500,000 in grants from a lump sum fund to a prominent doctor, who began referring his patients to a law firm that, in turn, paid referral fees to Silver. Although his arrest sparked a renewed push for ethics reform in Albany, it is disappointing that discretionary funding reforms were not included in the final reforms. Citizens Union will continue to push for needed ethics and disclosure reforms that will shed light on our state’s budgetary process.

Resources:

Addendum to Spending in the Shadows ReportLump Sum Spreadsheet

Community Projects Fund Spreadsheet

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