A copy of this report can also be found on Reinvent Albany's website here.

The list of lump sums is available in Google Sheets here.

INTRODUCTION

Governor Kathy Hochul’s Fiscal Year 2024 Executive Budget proposal appropriates $14.8 billion in “lump sums,” which are appropriations that authorize spending on a broad range of projects or purposes to be determined and allocated at a later date. In New York, lump sums are often also called “discretionary funds” because the Governor and the Legislature decide where, when, and how they are spent, typically months or years after they are budgeted, and without public scrutiny.   

Both watchdog groups and the Office of the State Comptroller (OSC) have issued repeated warnings about the elevated risk of waste and corruption from lump sum spending.¹ Aggravating the risk of abuse is the private process for awarding the money, which is often not subject to Comptroller’s contract oversight—a crucial check against abuse and a way to help ensure the taxpayer gets the best value on goods and services.²

Furthermore, the Governor and legislative leaders can use the lump sum funded projects they control as carrots (or sticks) to influence individual lawmakers. Lump sum spending can fuel undemocratic and special interest driven policies since they are allocated in private, outside of the relatively more transparent process of negotiating, publishing and adopting the State budget. 

From what little that has been disclosed, it appears that lump sum spending is too often allocated based on politics rather than public benefit. The State’s resources should be allocated transparently and based on clearly articulated priorities, quantified assessments of needs, and the likely evidence-driven benefits of the spending. Furthermore, being allocated outside the budget process means the impact of billions of dollars of lump sum spending is rarely well documented or assessed. 

Notably, the $14.8 billion includes $8 billion in lump sums for the COVID emergency that were also passed in the prior two enacted budgets; given that the COVID emergency has ended, this appropriation is unnecessary.

Public dollars should not be spent through lump sum appropriations that increase the risks of waste, distortion of priorities, low return on investment, and corruption. New York State should not approve new lump sums and should vastly improve the transparency of existing lump sums to show the public exactly where its money has, and will be, spent.

RECOMMENDATIONS

• This budget, the Governor and Legislature should:
  • Not enact any new lump sum appropriations. The State should not enact lump sum appropriations that authorize spending on a broad range of projects or purposes to be determined and allocated at a later date. Lump sum appropriations do not allow legislators and the public to know what programs will be funded. The practice also encourages wasteful spending that does not maximize public benefit or return on investment.
  • Omit the $6 billion Special Public Health Emergency Appropriation from the budget.
  • Reduce the Special Emergency Appropriation to $1 billion, and ensure it is subject to OSC oversight and competitive procurement rules.
  • Fully and completely disclose distributions from all lump sum pots currently being spent. The Executive should improve the transparency of existing lump sum databases and disclosures by consolidating them as much as possible. The Senate and Assembly should also provide a centralized database of lump sum spending, with much more detail than currently provided in the resolutions passed by each house. The Governor and Legislature should provide the following information in a tabular, open data format:
    • the agency administering the distribution;
    • individual legislative sponsors’ names, if any, or statewide elected official involved in the distribution;
    • approval date;
    • authorizing budget legislation information (bill name, chapter, page, etc);
    • fund and/or program name;
    • amount of grant/distribution;
    • recipient names, EINs, and addresses;
    • project status;
    • detailed description of the intended use of the funding; and 
    • criteria used for distribution.
• Within the next few years, the Governor and Legislature should:
  • Pass a law codifying the Governor’s discretionary lump sum database. This should include improved requirements for disclosure. As spending from prior lump sums continues, there should be robust transparency and accountability for that spending. 
  • Provide full data for lump sum spending dating back to at least 2020.