Institutional Federal Compliance Report 2021

______________________________________________________________________________________________ STATE OF NEW YORK • 63

Unassigned fund balance is the residual classifi- cation for the General Fund. Other governmental funds cannot report a positive unassigned fund balance but can report negative unassigned fund balance if expenditures incurred for specific pur- poses exceed the amounts restricted or committed to those purposes. For classification of governmental fund balances, the State considers expenditures to be made from restricted resources first, then in the following order: committed, assigned, and unassigned resources. Reserve Accounts Tax Stabilization Reserve Account The authority for establishing the Tax Stabilization Reserve Account is in State Finance Law Section 92. The account was established in 1984. At the close of each fiscal year, any surplus funds up to 0.2 percent of 1 percent of the “norm” shall be transferred to the Tax Stabilization Reserve Account, which shall not cumulatively exceed 2 percent of the “norm.” The norm is the aggregate amount disbursed from the State Purposes Account during the fiscal year. In any given fiscal year, when receipts fall below the norm, funds shall be transferred from the Tax Sta- bilization Reserve Account to the State Purposes Account, in an amount equal to the difference between the norm and the receipts, to the extent that funds are available in the Tax Stabilization Reserve Account. Money in the Tax Stabilization Reserve Account may be temporarily loaned to the State Purposes Account during the year in anticipation of the receipt of rev- enues, but these funds must be repaid within the same fiscal year. The balance in the Tax Stabilization Reserve Account at March 31, 2019 is $1.3 billion, and is included in the unassigned fund balance of the General Fund. Rainy Day Reserve Account The authority for establishing the Rainy Day Reserve Account is in State Finance Law Section 92-cc. The account was established in 2007.

Funds deposited to this account are transferred from the State Purposes Account. The maximum balance in this account shall not exceed 5 percent of the aggregate amount projected to be disbursed from the General Fund during the fiscal year immediately following the current fiscal year. The amounts in this account can be spent for two reasons: a. In the event of an economic downturn, as evi- denced by a composite index of business cycle indicators prepared by the Commissioner of Labor. If the index declines for five consecutive months, the Commissioner of Labor shall notify the Governor, the Speaker of the Assembly, the Temporary President of the Senate and the minority leaders of the Assembly and the Senate. Upon such notification, the Director of the Budget may authorize the State Comp- troller to transfer funds from the Rainy Day Reserve Account to the State Purposes Account. b. A catastrophic event, e.g., the need to repel inva- sion, suppress insurrection, defend the State in war, or to respond to any other emergency result- ing from a disaster, including but not limited to a disaster caused by an act of terrorism. The balance in the Rainy Day Reserve Account at March 31, 2019 is $790 million, and is included in the committed fund balance of the General Fund. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for future expenditures are established in order to reserve that portion of the applicable appropriation, is employed in the governmental funds. These amounts generally will become liabilities in future periods. Significant encumbrances at March 31, 2019 include (amounts in millions):

Fund Type

Amount

General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Federal Special Revenue . . . . . . . . . . . . . . . Other Special Revenue . . . . . . . . . . . . . . . . Other Capital Projects . . . . . . . . . . . . . . . . .

476 935 64

10,340