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Government Affairs Albany Update

October 16, 2007

Comptroller Fiscal Report

New York State spending is projected to grow significantly faster than revenues over the next four years, according to a report issued this week by State Comptroller Thomas P. DiNapoli.

The report, and a more comprehensive compilation of state fiscal data, is available on-line at www.osc.state.ny.us/press/releases/oct07/100907.htm.

The report, the Comptroller's “Financial Condition Report” for Fiscal 2007, provided final income and spending numbers for the fiscal year that ended on March 31, as well as state revenue and spending projections for the next four years.

Among the “highlights”:

This dismal fiscal outlook is despite the fact that total state tax revenues increased by nearly 50 percent over the past four fiscal years – to $58.7 billion for Fiscal 2007, an increase of 48.2 percent since Fiscal 2003 tax revenues.

Independent Contractors

In September, Governor Spitzer issued Executive Order 17, creating the “Joint Enforcement Task Force on Employee Misclassification,” comprised of the Attorney General, the Commissioners of Labor at Taxation & Finance, the Chair of the Workers' Compensation Board, the Workers' Compensation Fraud Inspector General, and the Comptroller of the City of New York. See http://www.ny.gov/governor/executive_orders/exeorders/17.html

Its purpose is to focus investigation and enforcement activity related to the misclassification of employees as independent contractors. In its list of findings, the Order states that “an increasing number of employers in New York and elsewhere are improperly classifying individuals they hire as ‘independent contractors,' even when those workers legally should be classified as ‘employees,'” and that some misclassification in being done to avoid labor law, tax, workers' compensation and other legal obligations.

The Order also commits the state to “work[ing] cooperatively with business, labor, and community groups interested in reducing employee misclassification.”

The Business Council is seeking member companies with an interest in this Executive Order and the issues it addresses, to help us respond to and participate in the Task Force's efforts.