Government Affairs Council
Update
February
10, 2006
DOT Commissioner to Address GAC on Monday,
February 13th
Tom Madison, Commissioner of
the state Department of Transportation, is the featured
speaker at the February 13th Government Affairs Council meeting.
The meeting begins at 10:00 a.m. in the main conference room
at 152 Washington Avenue. Madison's presentation is scheduled
for 10:00 a.m.
Other topics include:
- The Business Council's top budget priorities to keep New
York Ahead of the Curve
- Senator Bruno's $3.5 billion Small Business Assistance
Package
- Elliott Shaw will give an issue management update on workers'
compensation reform
- Ken Pokalsky will provide information on Lobby Law and
Procurement Lobby Law developments, as well as developments
about general procurement issues
- An update will be given on the business issues that will
affect legislators' 2006 report card
Taxation & Finance Speakers to
Address Voluntary Compliance Initiative, Expensing, Alternative
Taxes Repeal, REITS
Director Nonie Manion and Stan
Podhirny of the Division of Audit of the Department
of Taxation & Finance will speak at the February 15 Committee
on Taxation meeting on the subject of tax shelter reporting
and the Voluntary Compliance Initiative. As you are aware,
the VCI ends on March 1, 2006; the Department expects the heaviest
volume of compliance activity to occur during the fortnight
between the meeting date and March 1. This will be an excellent
chance to have your questions answered by the Department's
VCI leaders.
Deborah Liebman of the Office
of Counsel of the Department of Taxation & Finance will
appear at the February 15 Committee on Taxation meeting and
address the 2007 Executive Budget business tax proposals generally,
and expensing, subsidiary capital and alternative bases repeal,
Insurance Tax, and Real Estate Investment Trusts specifically.
Questions may be directed to Janet
Carroll at 518-465-7511, ext. 217.
UC Trust Fund Continues to Improve; Department
of Labor Projects Solvency Through 2006 and Reduction of Federal
UC Tax Rate for NY Employers
New York's Unemployment Compensation Trust Fund balance
continues to improve -- mirroring the economic upturn that commenced
in the second half of 2003. The Fund's closing balance in 2005
was over $300 million higher than 2004's closing balance. More
importantly, the New York Department of Labor anticipates a positive
balance at the close of 2006 thereby reducing private
sector New York employers' Federal UC tax rate to 0.8%
(from 1.4%) via restoration of the full (5.4%)FUTA credit.
How does the interlocking Federal/New York UC Tax System
work? And who pays the Federal and New York taxes?
- The UC Trust Fund - and its debt - are the responsibility
of PRIVATE SECTOR employers SOLELY.
- Private sector employers in NY pay a STATE UC tax to Albany
and they pay a FEDERAL UC tax to the Federal government.
NY - as well as the other 49 states - collect their state
UC taxes and ship to Washington to be held in trust by the
Feds for each of the states to cover their UC claimant checks.
- Whenever a state's UC Trust Fund has insufficient monies
to cover its UC claimant checks, the Feds advance to that
state the necessary monies from its own Federal tax collections.
- If a state's UC Trust Fund has a negative balance on two
consecutive December 31s, then Federal law will require a
PARTIAL payback of the arrears. The amount of the partial
payback is a small automatic increase of 3/10ths of 1% in
the FEDERAL tax rate on the Federal taxable payrolls of private
sector employers in the affected state for the upcoming
year; but the law does not require actual payment until
January 31 of the year after the upcoming year.
- This FEDERAL UC tax increase (due 13 months after a state's
second consecutive negative UC Trust Fund balance on December
31) can be avoided if the state -- in this case, New York
-- were to increase its own State UC tax on private sector
employers to wipe out the ENTIRE amount of arrears by
the eleventh of November of the upcoming year.
THIS IS THE IMPORTANT FACT: IT IS THE VERY SAME GROUP
THAT PAYS BOTH THE FEDERAL UC AND THE NEW YORK UC TAXES --
namely, PRIVATE SECTOR EMPLOYERS IN NEW YORK.
New York's UC Trust Fund balance was negative on December 31, 2002 and on
December 31, 2003. New York could have enacted during the 2004 Legislative
session a State UC tax increase of some $1 billion on NY private sector employers
payable by 11/11/2004 to have avoided the Federal UC tax increase of $135
million on NY private sector employers due on 1/31/2005.
New York's UC Trust Fund balance was negative on December 31, 2004. New York
could have enacted during the 2005 Legislative session a State UC tax increase
of some $600 million on NY private sector employers payable by 11/11/2005
to have avoided the Federal UC tax increase of $280 million on NY private
sector employers due on 1/31/2006.
Remember, in both cases it is the SAME entity paying the taxes: private sector
employers in New York. In one case, the private sector employer pays out
of her/his left pocket marked "Federal", and, in the other case,
the employer pays out of her/his right pocket marked "New York".
In both years, it made economical sense for New York's private sector employers
to pay the LOWER Federal UC tax increase LATER,
rather than the HIGHER State UC tax increase SOONER.
More
on the March 8th Transportation Conference
Staff
Contact: Tom
Minnick
A tentative agenda for the upcoming Transportation Conference
sponsored by The University Transportation Research Center of
CCNY can be found on our web site. It is in pdf format. Transportation
Conference Agenda
The conference, Innovative Transportation Financing and
Contracting Stategies, is scheduled for Wednesday,
March 8, 2006 at the Empire State Convention Center
in Albany and will focus on public-private partnerships for
transportation infrastructure projects in New York State.
Attendance is by invitation only. If you wish to receive an invitation,
please email Tom Minnick at tom.minnick@bcnys.org. He is compiling a list
of Business Council members who wish invitations to the event and will forward
it to the conference sponsors.
Howard Mills and James Seward to Address
Insurance Council
The Insurance Council of TBC will be meeting on Wednesday,
March 1st, from 9 a.m. to 10:30 a.m. in the Main Conference Room
at 152 Washington Ave. State Insurance Superintendent Howard
Mills and Senate Inusrance Committee Chariman James
Seward will address the committee. To register,
please call Janet Carroll at 518-465-7511, or email her at janet.carroll@bcnys.org
