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DiNapoli Releases Report on Tax Check-Off Donations

New York state's personal income tax (PIT) check-off funds are not distributed promptly to charitable causes, even after legislation aimed at speeding up the process was enacted in 2015, according to a report released by State Comptroller Thomas P. DiNapoli. His office found more than $15.7 million remained in the funds as of the end of state fiscal year 2016-17.

"Each year, thousands of New Yorkers support important causes through personal income tax check-off programs," DiNapoli said. "As check-off options expand, it's essential that state agencies ensure that contributions are used effectively and expeditiously."

New York state's first PIT check-off program, Return a Gift to Wildlife, was created in 1982 to provide funds for fish and wildlife purposes through the Conservation Fund. Since then, 15 additional check-offs have been created to provide funding for a variety of programs, including five since 2014. Since their various inception dates through SFY 2016-17, PIT check-offs have collected nearly $59 million in total donations.

In 2014, DiNapoli's office released a report looking at the history of the check-off programs and identified a significant lag in disbursements and increases in accumulated fund balances. Legislation proposed by DiNapoli's office was enacted to improve the pace at which tax check-off contributions are put to use, requiring that donations be disbursed within the year they are received to the extent possible. The legislation also established standardized and comprehensive reporting requirements to improve transparency and accountability for how the funds are used.

Key findings include:

  • Through SFY 2016-17, there was no spending for five funds created in the past four years, even though more than $1 million is in their accounts. Funds include: Homeless Veterans Assistance; Veteran's Remembrance and Cemetery Maintenance and Operation; Women's Cancers Education and Prevention; Mental Illness Anti-Stigma; and NYS Teen Health Education.
  • Spending increased in the five-year period ending in SFY 2016-17 compared to the preceding five-year period for Breast Cancer Research, Missing & Exploited Children, Alzheimer's Disease Support Services, Volunteer Firefighter and EMS Recruitment and Retention, and Prostate Cancer Research. Two funds had slower spending during the more recent period – the Lake Placid Olympic Training Center Fund and the Autism Awareness and Research Fund.
  • The aggregate accumulated fund balance of 12 funds reviewed totaled $15.7 million in SFY 2016-17, reflecting a modest decline when compared to the previous year. All but two of the funds had higher balances than the prior year. The largest balance, for the Breast Cancer Research fund, rose 9.8 percent in SFY 2016-17 to reach more than $8.2 million.
  • While the number of check-off authorizations has increased significantly over the past 30 years, annual contributions have not. In SFY 1988-89, the one check-off in existence, Return a Gift to Wildlife, collected over $1.8 million. In comparison, the 14 check-offs funds eligible for donations in SFY 2016-17 collected just under $2.2 million.
  • The total value of annual donations to check-off funds has been relatively constant over the last 20 years, averaging $1.7 million annually. However, as the number of PIT check-off options has grown the number of donations to each individual purpose has declined. Total annual donations peaked in SFY 2008-09 at $2.3 million, a figure nearly reached again in SFY 2016-17.
  • Average annual check-off donations by fund in SFY 2016-17 ranged from $3 for the Lake Placid Olympic Training Center fund to $27 for the Mental Illness Anti-Stigma fund.
  • Of the entities required to submit the annual reports under the 2015 legislation, it appears that only the Department of Health has publicly posted an annual report on its website and only for one of the multiple reports it is required to complete (the Alzheimer's Disease Assistance Fund Annual Report).

The more than $15 million sitting in the tax check-off funds reviewed is made up of contributions from taxpayers, transfers from the state's General Fund, dedicated fees, interest and other revenues.

Read the report, or go to: http://osc.state.ny.us/reports/budget/2018/tax-check-off-programs.pdf.

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