New York state has the highest number of personal income tax (PIT) check-offs in the nation, but an analysis by State Comptroller Thomas P. DiNapoli found that even as the number of check-offs have grown over the last decade, only a fraction of the money has been actually spent on their target purposes each year.
“New York state offers many worthy causes for income tax filers to donate to on their income tax forms, but money from less than one-third of the tax check-off funds has been spent in the last six years,” DiNapoli said. “Donors expect their funds to serve the causes they support. Agencies need to comply with reporting requirements to provide greater clarity on why spending from the funds is lagging.”
In State Fiscal Year (SFY) 2022-23, contributions to the state’s PIT check-offs totaled $3.2 million, led by the NYS Campaign Finance Fund, which received 24.9% of the total, followed by Breast Cancer Research and Education (8.9%) and Food Banks (7.9%).
While the number of check-offs has grown, the number of taxpayers donating to these funds has declined over time. In SFY 1983-84, the first year a tax check-off option appeared, there were over 344,000 contributors. In SFY 2022-23, with 34 eligible check-offs, the number of contributors totaled 218,400, a 63.4% decline. A potential reason for the decline in contributors may be the large increase in the number of check-offs; taxpayers are now required to file a separate form with their returns to participate. Previously, the check-offs accounted for just one line on a taxpayer’s annual return.
Disbursements for many of the funds lag even though contributions are statutorily required to be disbursed in the year they are received, to the extent practicable. Over the last five fiscal years, less than half of the 27 check-off funds this report examines showed disbursements. Of these, only the funds for Breast Cancer Research and Education and Alzheimer's Disease Support Services demonstrated spending every year. As a result, fund balances have grown. In SFY 2022-23, the aggregate, accumulated fund balances of the 27 funds totaled nearly $13.7 million. Less than one-third of the funds had a decline in their accumulated balances.
Statutorily, state agencies administering tax check-off funds are required to report annually to the Legislature, the State Comptroller, and the public on their disbursement of dedicated funds. However, this reporting is sparse; reports were issued for less than half of the funds with spending. Agencies should improve compliance with reporting requirements to provide greater clarity on how funds are being spent and why spending from many funds is delayed or not happening.
Analysis
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