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Government Affairs Albany Update

February 11, 2000

Proposed "Superfund" Fees

As reported earlier, Governor Pataki has incorporated last year's superfund/brownfield program bill into the Executive Budget proposal for Fiscal 2000-2001. The proposed budget bill (S.6292/A.9292) includes the programmatic changes proposed by the Governor last year — many of which are of concern to The Business Council — as well as significant new industry fees that would help finance future state remediation projects.

Corporate Income Tax 100% Sales Factor Apportionment Gains in CT

Connecticut Department of Revenue Services Commissioner Gene Gavin delivered the report of the Factor Relief for Manufacturers Study Committee to Speaker Moira K. Lyons (D) — who had requested the study in response to the growing attractiveness to businesses of neighboring states' adoptions of apportionment sales factors greater than 50% (The current level in Connecticut and New York).

The Committee Report established that the chief advantage of adopting an 100% sales apportionment factor is that businesses considering location or expansion in Connecticut would no longer see their corporation business taxes increase just because they invest in Connecticut or hire Connecticut workers — which is the case under Connecticut's current apportionment methodology (identical to New York's). Instead, their corporation business tax would be based on how much of their sales were in Connecticut. The report noted also that manufacturing continues to be a major economic engine in Connecticut and provides significant employment and wages.

Massachusetts went to an 100% sales factor this year for manufacturers and Pennsylvania and Ohio went to 60% in 1999 with legislation pending to go to the 100% factor.

Adoption of the 100% sales factor for New York is The Business Council Committee on Taxation's #1 Article 9-A job incentive tax proposal and is a legislative priority issue of The Business Council Board of Directors.

"NY Soars"

On Thursday February 10th Senate Majority Leader Joseph L. Bruno unveiled a comprehensive, $650 million plan which is designed to lower the cost of in-state flights and improve New York's upstate airports. The plan, NY Soars, is an outgrowth of the Senate Majority Task Force on Upstate Airports. It provides $200 million in state capital funding over five years for airport terminal, runway and access highway improvements, and leverages another $430 million in federal and local airport funds. The plan is designed to spur capital improvements at upstate airports enabling them to lure low-cost air carriers and stimulate competition. The plan also provides $20 million for a three-year pilot program to subsidize in-state airfares at under served upstate airports. NY Soars would be administered by the State Department of Transportation which would review local airport construction applications.