Government Affairs Albany Update
March 12, 2010

Ravitch Budget Plan

Lt. Governor Richard Ravitch released a five year plan to address the state’s structural imbalance. The press release is available here; the full report is available here. Its key features include $6 billion in new, short term, PIT-backed borrowing over the next three years; creation of as state Financial Control Board; new gubernatorial authority to take action to make mid-year budget adjustments; a shift to GAAP accounting and a shift in start of the state’s fiscal year to July 1. The Business Council’s analysis of the Ravitch plan is available here.  Our concerns include its lack of specific recommendations on necessary spending cuts – including in big ticket programs like Medicaid and school aid - that would be necessary to close the current and out year budget gaps.

State Comptroller Thomas DiNapoli also released a statement in response to the Ravitch proposal, questioning the use of additional state debt. The Comptroller, who released his own fiscal reform package this week, provided the following “Quick Facts on New York’s Debt”:

UI Legislation Opposed

The Business Council is opposing S.2245 (Onorato), which is on next week’s Senate Labor Committee agenda. This bill would:

Our memo in opposition is available here. If enacted, this bill would increase employer taxes for unemployment insurance by 14.7% in the first year. In 2008, New York State employers paid $2.3 billion in unemployment insurance taxes. While we acknowledge that UI benefit levels have not increased since 1998, the Business Council believes the solvency issues must be negotiated first to ensure any negotiated benefit rate increase can be sustained without prolonging insolvency issues and that any solutions are equitable in their outcome.

Business Council staff contact: Lev Ginsburg

Taxation of Corporate Owned Life Insurance

The Business Council is opposing legislation (S.6236/A.9439), which would impose a fifty-percent franchise tax on corporate-owned life insurance benefits. The bill is on the Senate Investigations/Governmental Operations Committee agenda for next Tuesday. Enactment of this bill, proposed primarily as a state revenue-raiser, would threaten the long-term financial security of small and large companies, which purchase life insurance to compensate against loss of an owner or key employee, as well as, short-term and long-term obligations.

Archives - Government Affairs Albany Update