NYS donor tax checkoffs need a hard review

Like residents of many other states, New Yorkers can help worthy causes by checking off donation boxes on their personal income tax returns. Many millions of dollars have been solicited this way over the four decades the program has existed.

The first recipient established by the state for such targeted contributions was the Return a Gift to Wildlife Fund, established by law in 1982. But in the ensuing years, other causes were added — to the point where tax filers have been choosing from a total of 34 checkoff options.

That sounds fine as far as it goes. But the latest report from State Comptroller Tom DiNapoli’s office makes one wonder whether it’s worth maintaining the program as is. The comptroller’s staff found that in the 2022-23 fiscal year, $13.7 million in donations checked off by taxpayers were never even disbursed to state agencies for their intended purpose. “Donors expect their funds to serve the causes they support,” DiNapoli said last week.

At least $1 million went unspent in each of the following targeted causes: breast cancer and prostate cancer research, volunteer firefighter recruitment and retention, help for the Long Island State Veterans Home in Stony Brook, and outreach for organ and tissue donations and research.

Reports describing how the funds are to be spent are required to be sent annually to the comptroller’s office and the State Legislature. But those filings have been few and far between. Judging by DiNapoli's analysis, the movement of tax money from the Department of Taxation and Finance to the administering agencies appears to be an unaccountable procedural muddle. This opaque bureaucratic snarl desperately needs untangling and clarifying.

Beyond this lack of transparency, the sharp rise in the number of checkoff choices — reportedly the most for any state — makes for a kind of scattered if well-intended mission. Over the long term, the number of tax filers contributing to all these checkoff funds has declined while the amounts per donor have increased. That means little rise in total donations through tax forms and less funding per cause.

Meanwhile, the legislature keeps adding checkoff options, including two just last year. And there's another drawback to this funding method. When a budget crisis hits, these and other obscure accounts are vulnerable to being “swept” by the state budget office, meaning the money disappears and is used to close deficits.

It’s a typical tale in government: A practice once simple and straightforward becomes hazy and entangled. Lawmakers and budget officials ought to take a swift, blunt look at checkoffs, with an eye toward fixing the process. If that can’t be done, make the tax form blessedly shorter and discontinue the checkoffs. People have other ways to contribute to charities and nonprofits of their choice — ways that are just as tax-deductible and far less convoluted.