Key Issues in FY2017 Final Budget
April 1, 2016
The following is an update on how key issues have been addressed in the final agreement on the FY 2017 state budget. Our more detailed review of the complete budget will be available mid-week shortly. Feel free to contact our government affairs staff with any questions or comments.
Continued fiscal constrain on state operations and all funds spending levels.
- Total state operating funds spending will be $96.2 billion, an increase of 2%. Reduces personal income tax rates for incomes between $40,000 and $300,000.
Small business tax reform.
- After appearing in the Executive Budget and both one-house budget bills, targeted small business tax reductions were rejected in favor of general personal income tax rates.
Corporate reform/technical amendments.
- “Qualified financial instrument” technical amendments were approved; technical amendments related to caps on investment income, definition of investment capital, and calculation of PNOLs were not adopted.
Non-CPA minority ownership.
- Authority for CPA firms to have minority non-CPA ownerships was not approved.
Workers’ comp reforms.
- No Programmatic changes were adopted.
Adopt state contract procurement procedural reforms
- The Procurement Stewardship Act and Procurement Lobby act were extended permanently; reforms include required debriefings for unsuccessful bidders, clarification of restricted periods, and others.
Establishment of “limited service clinics.”
- Not adopted.
Estate tax domicile reform
- Language prohibiting consideration of charitable contributions was adopted.
Increased Environmental Protection Fund
- A $300 million increase in the EPF was adopted.
- A three tiered minimum wage increase was adopted; $15 in NYC by 12/31/18 (one year later for employers of ten or less); $15 in Westchester, Nassau and Suffolk County by 12/31/21; and $12.50 in the remainder of the state by 12/31/20, then indexed based on economic growth factors. The tip wage for food service workers was increased to 2/3rds of the applicable minimum wage.
Paid family leave
- Effective 1/1/18 employees will be eligible for up to 12 weeks of “paid leave” (with benefits up to 2/3rds of wages, capped at 2/3rds of the state average weekly wage); employees must work for 26 consecutive weeks to qualify; benefits are based on an expanded DBL system, with paid leave premiums to be paid thru employee payroll withholdings.
MTA utility relocation costs.
- A proposed shift of the cost of relocation of underground utilities related to MTA capital projects was rejected.
Workers’ comp board assessment “sweep.”
- Final budget allows for a transfer of $10 million to set up the Paid Family Leave Program, $140 million to SIF to cover workers’ comp premiums for state employees, and remainder of “excess” assessments to be swept to general fund.
Increased health plan assessments to pay debts of defaulted “Health Republic” insurance exchange.
- Assessment was rejected; Health Republic debt to be financed through “settlement” funds.
DOH “critical drug” program.
- Proposals for pharmaceutical price controls and new “price gouging” penalties were rejected; the budget adopted provisions allowing for mandatory rebates under medicaid for drugs whose price has increased by 300% or more in one year.
Restrictions on campaign contributions from LLCs, adoption of public funding of campaigns.
- All campaign finance changes were rejected.
Project labor agreement requirement for “design build” projects.
- The Executive Budget proposal, requiring PLAs if design build procurement was to be used for Javits, Penn Station or Farley projects, was adopted.
Extension of Lobby Act to “commissioned salespersons.”
- This proposal to expand “procurement lobbying” registration requirements and prohibit commissions related to state and local procurement, were rejected.
PACB approval of projects using tax exempt bonding.
- All provisions related to private activity bond allocations were rejected.
Canal Corp transfer
- Canal Corporation transfer from the Thruway Authority to the New York Power Authority was approved.
Limited extension of “Excelsior Jobs” program
- Unallocated Excelsior credits can be allocated through 2027; cap on available credits are reduced for FY 2016 through 2024.