Government Affairs Albany UpdateOctober 16, 2007
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, 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”:
- overall state spending increased by 26.6 percent over the past four fiscal years, more than twice the rate of inflation.
- state spending is projected to increase by 31 percent over the next four years, based on existing programs and trendline projections, while revenues are only projected to increase 21 percent.
- state-funded debt is projected to increase to nearly $64 billion by Fiscal 2012, up from $51 billion in Fiscal 2007, with annual debt service projected to grow to $7.1 billion.
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.
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.