Government Affairs Albany Update
December 3, 2009

Legislature Passes DRP Bills; Significant Spending Reductions and Structural Reform Pushed Off

The Extraordinary Session convened by Governor Paterson on November 10 limped across the finish line yesterday, with the Legislature passing a variety of bills intended to close about $2.7 billion of this year’s budget gap through a combination of spending cuts and fund transfers.  It does not include any new or increased revenue measures.  This deficit reduction package is less than the current year deficit projected by either Governor Paterson ($3.1 billion) or Comptroller DiNapoli (up to $4 billion).  All bills were delivered to the Governor on December 2nd.

Spending Reductions Bill (A.40022/S.66022)

  • Imposes a 12.5% cut on remaining, undistributed appropriations for several state agencies and a wide range of local assistance programs.
  • Cuts general state school aid from $16.905 billion to $16.525 billion, but offsets that cut with the acceleration of federal ARRA education funding from next fiscal year to this year (this federal funding for the current fiscal year is increased from $1.235 billion to $1.626 billion).  
  • Appropriation authority to offset the cost of small business’ compliance with Timothy’s Law is reduced from $99.2 to $79.7 million.
  • State aid for mass transit is reduced from $1.743 billion to $1.620 billion.

Sweeps Bill (A.40023/S.66023)

  • Increases Battery Park City Authority’s “contribution” to the General Fund from $20 million to $200 million.
  • Increases the state’s authority to sweep surpluses from various state accounts into the General Fund from $200 million to $575 million.
  • Sweeps $90 million in RGGI funds from NYSERDA to the General Fund.

Tier V Retirement Bill (A.40026/S.66026)

  • Creates a new Tier V in the retirement system; reinstates the 3% pension contribution requirement for state employees.
  • Increases vesting period to 10 years; does not allow overtime to be calculated in the final average salary beyond 15% of the employee's base annual salary. 
  • Increases the target retirement age to 62.
  • Applies to new hires post 1/1/10.

Tax Amnesty Program Bill (A.40021/S.66021)

  • Establishes a tax amnesty program, initially proposed by the Administration, and applies to state tax liability of both individuals and businesses.
  • Reduces interest and penalty payments by 50% for final determinations set in 2005 and 2006; by 20% for pre-2005 judgments, if the outstanding tax and reduced interest and penalties are paid in full.

Meeting Reminder:  Joint Enforcement Task Force on Employee Misclassification to Present December 9

BCNYS members have the opportunity to hear from Task Force members on their efforts to increase compliance with state labor, tax and workers’ compensation laws.  Jennifer Brand of the NYS Department of Labor will be joined by colleagues from the Tax Department and Workers’ Comp Board to discuss some of their more recent findings and to talk about their 2010 legislative agenda.

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