NY must better manage the money that New York residents donate through their income tax returns the state Comptroller's Office said in a report.

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By David Riley

Democrat and Chronicle

ROCHESTER - The state must better manage the money that New York residents donate through their income tax returns to causes ranging from breast and prostate cancer research to finding missing children, the state Comptroller's Office said in a report released Wednesday morning that calls for several reforms.

Spurred by a Democrat and Chronicle story in October that detailed balances which have piled up in some of the accounts that taxpayers can support, the comptroller's report said state agencies that oversee these funds have been increasingly slow to put the money to use.

In the first five years of the past decade, the state spent 70 percent of the $11.5 million collected from donations through tax form checkoffs, as well as state matching funds, special license plate sales and other sources of funding to the same accounts. Over the past five years, that figure plunged to 43 percent — agencies released only $5.1 million of $12 million collected to the causes for which the money is intended.

That lack of action is hindering the funds' potential and could erode taxpayers' interest in the programs, the report says.

"New Yorkers deserve to know that when they donate to an important purpose through a personal income tax checkoff box, such funds will expended in a timely and effective manner to benefit the cause for which they were intended," the report says.

Since the creation of the first "Return a Gift to Wildlife" checkoff fund in 1982, taxpayers have given more than $51 million, the report says.

The Comptroller's Office is calling for several changes in how the eight funds that exist today are administered, including more standardized reporting rules and requiring state agencies to file annual details of how they go about rewarding the money and how much each recipient gets.

Agencies also should have to justify to state leaders why any cash remains sitting in an account and come up with a plan to put the money to use, the report says.

For funds with no defined recipient — the breast cancer research account, for example, can support a range of researchers — agencies need to draw up policies that establish a prompt, competitive process for the money through an annual or standing request for proposals from applicants, the Comptroller's Office said.

The report says that of the funds that are mainly supported by taxpayer donations, three managed by the state Department of Health make up about 89 percent of $14.6 million in balances in checkoff funds.

The report also singles out the prostate cancer research fund as in need of change — as the Democrat and Chronicle reported in October, the state has yet to release a dime from the account, which had a balance of $2.9 million as of the end of 2012. The Health Department at the time blamed the law that established the fund created in 2005. It requires the money to be funneled through an outside nonprofit with which the state has been unable to work out a way to release the money.

The Comptroller's Office also says no money has yet been spent from a fund meant to support volunteer firefighters and EMTs, but a state agency overseeing the account said last year that it had released some of the funding.

The report raises some questions about the overall effectiveness of tax checkoff funds as well. The number of contributions to the funds has plunged about 61 percent since 1984, it says. Adding funds does not appear to bring in more donations, but redistributes the amount that taxpayers give among a growing group of causes, the report says.

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