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Government Affairs Albany Update

March 14, 2008

Budget Update

The Senate Republicans and Assembly Democrats each introduced an alternative budget plan this week. The Senate's came out in the form of a legislative resolution (Resolution number 4655), while the Assembly introduced amended versions of the Governor's budget bills (A.9800-B thru A.9810-B). Both the Senate resolution and the Assembly budget bills were approved by their respective houses this week. Two-way budget negotiations, and joint legislative conference committees, will commence next week. A summary of these legislative budget proposals are available on our web site here.

The conference committees are scheduled to meet daily, starting next Tuesday, at the following times:

11:00 a.m.: Economic Development; General Government/Local Assistance; Health and Education
1:00 p.m.: Public Protection; Environment/Agriculture/Housing; and Higher Education/Arts
4:30 p.m.: Mental Hygiene; Transportation; and Human Services.

All meetings are in the Legislative Office Building, except those for General Government, Environment and Transportation, which will be in the Assembly Parlor in the Capitol.

Senate Passes Constitutional Spending Cap

This week the Senate passed a concurrent resolution that would amend Article VII of the State Constitution limiting the growth of state spending and creating a revenue stabilization tax reduction and debt repayment fund.

The amendment would limit state fiscal year spending to the preceding year's spending plus the product of the lesser of 120 percent of the inflation rate or four percent. It would also require fifty percent of revenues in excess of the state spending limitation be deposited into the tax stabilization reserve fund. The other fifty percent of excess revenue would be returned to New York resident taxpayers in proportion to their personal income tax liability.

The measure is under consideration in the Assembly. These amendments would take effect after passage by two consecutively elected legislatures and the approval of the voters by referendum.

All Out Push Opposing IDA Prevailing/Living Wage Requirements Underway

Business Council President Kenneth Adams continued to voice opposition to inclusion of any prevailing or living wage requirements in IDA reform legislation with a letter to the Executive and legislative leaders.

Chambers of Commerce from around the State are joining in this effort, with the Rockland Business Association and the Brooklyn Chamber of Commerce adding their voices of opposition during their Albany legislative lobbying days earlier this week. All Business Council and Chamber members are encouraged to weigh in with the legislative leaders and their legislative delegation to express their concern about the negative impact a prevailing wage requirement will have on regional economic development efforts. The Business Council memo in opposition to Assembly Bill 7303.

Energy Report Issued

The Empire Center for New York State Policy, a project of the Manhattan Institute for Policy Research, this week issued a special report entitled “NY Unplugged.” The report includes detailed information confirming that New Yorkers pay some of the highest energy costs in the nation, and argues that current state policies will further drive up rates. The report outlines a number of recommendations that include a reauthorization of Article X that is fuel-neutral, a moratorium on further increases in the “Systems Benefit Charge,” and a hard look at the viability and efficacy of existing state energy policies.

MTA CEO Lee Sander Addresses Council Members

The Business Council's Transportation Committee meeting this week featured a presentation by Metropolitan Transportation Authority (MTA) Executive Director Elliot “Lee” Sander, who spoke about the MTA's proposed $29.5 billion 2008-13 capital program. Mr. Sander reflected on the history of the MTA, assessed today's challenges and his vision of a public transportation system that meets the needs of a 21st Century economy. He said that, in moving 8.5 million commuters daily, the MTA is inextricably linked to the overall economic vitality of New York City, Long Island and Mid-Hudson regions. He stressed that the MTA spends millions of dollars on contractors, manufacturers, construction companies and dozens of specialized businesses within the state. The session concluded with questions and answers about contract procurement and doing business with the MTA. Copies of the MTA Capital Program are available here.

Health Care Taxes

The Business Council was one of nearly three dozen business groups that signed on to a full-page newspaper ad opposing the $190 million increase in the Covered Lives Assessment and the imposition of an HMO premium tax proposed in the Executive Budget. Together the proposals would add $350 million in new taxes on health coverage. The ad ran in the Thursday, March 13th edition of the Albany Times Union, and can be viewed here. The Business Council March 7th memo opposing these taxes may be viewed here.

Washington Update

Forty-four governors, including New York's, signed onto a letter to Congressional Leadership opposing a provision in a House-passed college affordability bill. The provision would penalize states that cut funding for higher education. The “maintenance of effort” requirement could strip federal funds from states that allow higher education budgets in any fiscal year to fall below average annual spending from the previous five years. Given the uncertainty of many states' finances, and the status of recommendations from the New York's Commission on Higher Education, any “maintenance of effort” provision could have long-standing implications for the state budget making process. The letter can be found here.

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