Government Affairs Albany Update
May 8, 2009
- MTA Financing Package/Payroll Tax
- Unemployment Insurance Update
- Economic Development Funding
- “Modernizing the State's Procurement Laws”
The legislature has passed, and the Governor has signed, legislation to provide up to $2 billion in new revenues per year to the Metropolitan Transit Authority.
This legislation imposes a new “mobility tax” on employers within the twelve county metropolitan commuter transportation district (MCTA). This is payroll tax on most private and public employees, and self-employed individuals, located within the MTCD. Key provision include:
- the tax applies to employers within the MTCD that are subject to personal income tax withholding requirements and that have a quarterly payroll above $2,500.
- The tax is .34 percent (or 34 cents per $100 of payroll), and is applied to “wages and compensation” as defined in the Internal Revenue Code Sections 3121 (applicable to business subject to FICA) and 3231 (railroads.)
- Employers are expressly prohibited from passing through the cost of this tax to employees.
- Employers will be required to pay the tax quarterly. The tax will take effect March 1, 2009, and the initial payment is required with their third quarterly payment.
This tax is intended to raise $1.5 billion on an annualized basis. School districts subject to this payroll tax will be reimbursed the cost by the state.
In addition, the bill imposes several other surcharges within the MCTA, including those on learners permits, drivers licenses and vehicle registrations; and on taxi rides and car rentals.
Business Council Staff contact: firstname.lastname@example.org.
Several bills are under active consideration in Albany to increase unemployment insurance benefits; increase the taxable wage base to pay for increased benefits; expand for benefits; and permanently index the UI to the state's average weekly wage. While The Business Council has been in discussions with the Legislature on how best to accomplish a benefit increase, the federal stimulus bill added new elements to the discussion by making available to states a one-time distribution of funds, if state laws broaden eligibility for coverage to include specific categories of “voluntary quit with good cause.”
A summary of these bills follows:
- S.2245(Onorato)/A.4921(John) would provide for three years of annual increases in the maximum weekly UI benefit, to a maximum of $625 in 2012. The taxable wage base would increase from $8,500 to $13,000 in 2012. The average per employee annual unemployment insurance tax would rise from $297 to $455. Maximum UI benefits would be index to one-half the state's average weekly wage starting in 2013, and the Labor Commissioner of Labor the authority to set the taxable wage base at a level sufficient to fund the annual increases in benefits.
- S.4110 (Onorato) proposes a variety of changes to the Labor Law to ensure the state is eligible to receive the maximum amount of Unemployment Insurance modernization funds from the federal stimulus package. Among the proposed expansions of eligibility not currently defined in state statute is a new “compelling family reason” of leaving employment due to the illness or disability of an immediate family member. The Business Council has opposed this change. While there were other categories of benefit eligibility expansion the state could have chosen from the federal stimulus, this bill represents the Administration's prioritization of benefit eligibility expansion.
- A.8100 (John) combines both benefit increases and the eligibility expansions included in the two prior bills. It provides no additional clarification on the definitions within the proposed new category of voluntary quit with good cause for leaving employment due to the illness or disability of an immediate family member. The Business Council opposes this bill both because it contains an automatic indexing provision for UI benefit increases, and because of its broadening of UI eligibility.
The Governor has announced that applications are now being sought for funding under the $120 million “Upstate Regional Blueprint” fund and the $35 million “Downstate Revitalization” fund – both authorized under last year's budget.
On-line applications will be available on the ESDC web site on May 11. Applications are due June 15, 2009, and awards will be announced August 17.
The upstate fund will provide loans and grants for business attraction and expansion projects, and funding of land acquisition and site preparation. Eligible applicants include business, municipalities, local development corporations and others.
The downstate fund is for investments in distressed communities, business and technology development, and public/private cooperative efforts that promote new investments in the state. Funding categories and eligible applicants are similar to that for the Upstate Blueprint Fund, discussed above.
Business Council staff contact: email@example.com.
The New York City Bar Association's Construction Law Committee has released a report titled "Modernizing the State's Procurement Laws". The report is in response to an April 22 joint hearing held by the Assembly and Senate Labor Committees on how to define the lowest responsible bidder on public work contracts. The report is available here.