2013 Legislative and Regulatory Agenda
The following presents our advocacy agenda for 2013. It reflects both the diversity of The Business Council’s statewide membership, as well as the broad public policy agenda confronting the state’s business community. Importantly, it includes proactive initiatives intended to improve the state’s business climate and promote new private sector investment and job creation, in addition to identifying damaging proposals that we will work against.
We look forward to working with the Administration, Senate, Assembly and – most important – our members in adopting pro-investment, pro-growth legislation in the 2013 session.
The last decade was very difficult for construction industry employment in New York State. Losses throughout the decade peaked with the economic collapse in 2008, and construction investment and employment is experiencing a modest recovery. New York State lags far behind most states in its procurement practices for public works construction and a litany of mandates and restrictions result in excessive costs. While progress was made in the limited authorization of design-build in the 2012-13 state budget, legislation is still needed to:
- Encourage Public-Private Partnerships through enactment of the Innovative Infrastructure Development Act. Using PPP pilot projects on the Tappan Zee Bridge replacement project would help build momentum for a construction jobs recovery in New York State.
- Reduce the cost of construction in New York State and spur competition through the Public Construction Savings Act and enactment of legislation that would increase the Wicks Law thresholds across the state. In addition, a significant reduction in construction costs could be achieved through passage of the current reform bill containing common sense changes to New York’s unique and antiquated Scaffold Law.
The process of selling goods and services to state government is increasingly cumbersome, with more businesses, including M/WBEs, bypassing this significant business opportunity. New York needs to make the procurement process more efficient, while assuring fair and reasonable bids. New York should:
- Advocate for an affirmative statement allowing the state and political subdivisions to lease equipment and technology.
- Expand political subdivisions co-op purchasing abilities.
- Provide “rules of engagement” for the business/vendor community on Strategic Sourcing which will enable them to adequately plan for new bids.
- Work with the Administration to ensure necessary information exchange between vendors and the Administration.
- Expand public/private partnership opportunities.
It is critical that the state promote public confidence in corporate governance while avoiding mandates that make New York uncompetitive with other states. New York should:
- Oppose mandates that corporations obtain majority shareholder approval for political donations or communications on public policy issues.
- Oppose mandates for remote shareholder participation and proxy voting at shareholder meetings.
As New York works to improves it overall business climate, we support measures that open new investment opportunities and effective, targeted economic incentive programs to support investment in strategic industries. We need to:
- Improve Excelsior - Based on data for the first eighteen months of implementations, the Excelsior program is committing less than half of its available tax credits, and participating business are receiving less than half of the maximum credits for which they are eligible under statutory criteria. We will be proposing amendments to Excelsior eligibility criteria and credit award criteria to increase the effectiveness of the program, as well as the restoration of unused state tax credit capacity for use in future tax years.
- Develop Shale Gas – We continue to push for finalization of regulations and performance criteria for use of horizontal hydraulic fracturing in natural gas development.
- Support R&D Activity – New York should adopt a new, as of right, refundable research and development tax credit for both capital and other qualified research expenses (see Tax section for further details.)
- QETC – The state should re-establish a reformed “qualified emerging technology company” tax credit for capital, operational and training investments in small, emerging technology business (see Tax section for further details.)
- Adopt an asbestos remediation tax credit, to promote the redevelopment and reuse of existing, underutilized properties.
- Pharma and Life Sciences – To promote the growth of the state’s life science sector, New York should support in-state clinical trials through tax and financial incentives.
The Business Council supports alternative educational models to better prepare students for entrance into college and/or career. New York State Board of Regents Chancellor Merryl Tisch noted, in a recent op-ed, that the Board was considering such STEM and Career and Technical Education (CTE) pathways.
We also need to address the “skills crisis.” There are currently three million unfilled jobs in the U.S.; however, many employers, Business Council members included, are unable to find the skilled workforce they need. Major changes on the state and national level must be implemented to better prepare students for postsecondary education or a career.
The Business Council supports the following education and workforce development initiatives/items:
- Encouraging public-private partnerships in education, using alternative education models such as the Pathways to Technology Early College High School (PTECH). This grade 9-14 school in Brooklyn is a partnership between the IBM Corporation, the New York City Education Department and the City University of New York. Upon completion, students will have earned an Associate in Applied Science degree in either Computer Science Technology or Electromechanical Engineering Technology.
- Increasing public awareness of “middle skills” positions (those that require more than a HS diploma but less than a four-year degree) are good-paying, in-demand jobs. Part of this broad initiative would entail a PR campaign promoting career and technical education programs.
- Working to address the STEM-skills gap in the short AND long term. “Race to the Future,” a proposed federal-level program put forth by business, would provide incentives for states to: strengthen STEM in grade school; broaden access to comp. science in HS (New York is actually one of the only states to offer credit for CS courses); help raise college graduation rates; and expand colleges’ capacity to produce more STEM degrees with a focus on computer science. Under this plan, for companies to fill short-term hiring needs in STEM jobs, Congress would allocate 20,000 H-1B STEM visas. To qualify for these visas, employers would have to invest $10,000 toward the development of future STEM workers for each visa sought. (Estimated to generate $200 million for STEM pipeline) The proposal would also authorize the recapture of 20,000 unused employment-based green card numbers, annually. Employers would have to invest $15,000 for each green card number made available through recapture. (Estimated to generate $300 million for STEM pipeline).
- Continue reducing burdensome state mandates on school districts. The 2 percent property tax cap was the first step in a two-step process to provide real fiscal relief to taxpayers. New York school districts need mandate relief in order to function under the cap.
- Enable charter schools to form consortiums/pool resources together to better serve children with special needs under the Charter School Students with Special Needs Act (which will be reintroduced in the upcoming session). The bill passed in the Senate last year, but died in the Assembly.
New York also needs to establish a cohesive vision for job creation resources available across state agencies to assure that investments are aligned with state and regional development goals, and the particular needs of employers. New York needs to:
- Better align existing state and federal workforce training resources with regional economic development demand and need.
- Design metrics which measure the effectiveness of existing state workforce training investments in meeting regional workforce needs.
Reducing energy costs and promoting adequate and diverse energy supplies will help support economic growth. New York should:
- Accelerate the sunset of the increased Public Service Law 18-a energy assessment and avoid any new or increased energy taxes and assessments.
- Assure the cost-effectiveness of, and need for, any programs financed by state imposed energy assessments or charges before such charges are reauthorized or increased.
- The current program review of the RGGI program thus far has failed to address the fact that the RGGI goals have been achieved due to access to highly competitive domestic natural gas, expanded energy efficiency, and continued investment in renewable generation. There is clear evidence that market forces, strategic incentives, and ingenuity have far outpaced regulatory programs like RGGI. Climate change is a global issue that cannot be solved by a single sector regional program - it must be addressed at a nation state level.
- The proposed Champlain Hudson Power Express is a “one off” transmission project that does not result from comprehensive planning and will by-pass New York’s transmission infrastructure, while tethering the State to an uncertain future. As such, it will not address many of the objects of the STARS Report, and will circumvent, rather than improve, New York’s transmission system. The Business Council does not support that project.
- Support relicensing of Indian Point Power Plant a significant source of benefits to the state and region, including economic activity, clean air and low, stable electricity prices.
- New York State Energy policy should acknowledge that New York consumers pay some of the highest energy prices in the nation, and it should reject projects that are dependent upon long-term potentially “above-market” power purchase agreements and/or additional consumer-funded subsidies.
- The Action Plan should acknowledge that in most instances the current competitive energy market has provided proper signals to investors to encourage the development of generation, demand response, and transmission that meet the needs of energy consumers. Although opportunities to improve local reliability and reduce costs remain.
- Additionally, any benefits associated with a new project should be weighed against any offsetting negative job, tax, or other economic and/or reliability impacts caused by resulting harm to the state’s current energy assets.
- Some of the power generation retirements will have a significant adverse effect on the local employment, tax rates and reliability. The State should critically review the retirements to determine steps that can mitigate, prevent, or deter their closure, although we caution that policy initiatives intended to address these facilities should not lead to increased consumer electric rates. If no other alternative exists the State should explore repowering the facilities.
- The State must support policies that encourage fuel diversity in the hope that diversifying a power system’s fuel and technology mix will enable the system to withstand fuel price volatility, fuel supply or delivery disruptions, or technical disturbances on the system.
- Promote investment in transmission and distribution infrastructure necessary for system reliability and to support deployment of renewable generation in a cost-effective manner.
New York has a stringent environmental regulatory program that imposes costs and operational restrictions on business and impedes capital investment and job growth. The state needs to:
- Utilize Lean and Six Sigma process improvement approaches to empower environmental agencies to work more effectively and efficiently by eliminating waste in government processes.
- Improve SEQRA and permitting programs to give business a more certain, workable timetable for the environmental review of major investment projects, including a more appropriate standard for adjudicating issues in DEC permit hearings; assuring that regulatory timetables for project reviews are adhered to; creating an expedited process for applications that meet certain criteria (e.g., replacement projects, pollution reduction, etc.); and integrating coastal zone reviews with other state environmental review requirements.
- Amend DEC’s new source review regulation to eliminate unnecessary restrictions on capital investments and operational changes that are intended to improve efficiency and competitiveness and/or reduce emissions and energy use.
- Oppose state-level, economy-wide GHG emission reduction mandates.
- Expand the brownfield program to extend eligibility to Class 2 state superfund sites and RCRA corrective action sites when site cleanups are proposed by non-responsible parties.
The financial services industry is it’s the largest contributor to New York’s gross state product and total payroll, and includes traditional banking firms, investment banks and security firms, mutual funds, stock and commodity exchanges, insurance companies and trust and other financial instrument and asset managers. To promote continued growth and economic activity in this sector, we support:
- Labor Law amendments to allow employers to offer their employees the option of electing to receive their wages via a debit card.
- Permanent legislation modernizing the regulation of commercial insurance markets in New York State to provide rate and form regulation reform for insurance policies sold to large businesses. Current state law expires in 2013.
- Adoption of No-Fault Insurance Fraud reform that makes staging an accident a felony, criminalizes the act of physicians sending patients through medical mills to collect on insurance, and provides insurers with more time to investigate fraud.
The Business Council opposes:
- Expansion of New York’s excessively broad Martin Act, including proposals to allow pension funds to direct state investigations into alleged violations.
- Legislation that provides for post judgment remedies to creditors against entities that have defaulted on their debts.
- Imposing new or expanded state or local taxes on the financial service sector’s firms or its employees.
- New state level regulatory requirements or restrictions until financial services reform at the federal level is fully implemented, and there has been ample time to evaluate its effects in New York.
- Mortgage foreclosure fraud legislation that would create felony level crimes against alleged fraudulent activity during the foreclosure process.
The state fiscal plan issued in April 2012 projected an initial budget gap of $950 million for Fiscal Year 2014, and a combined $8.5 billion gap for fiscal years 2014 through 2016. Since then, the FY 2014 projected deficit has grown due to ongoing economic sluggishness, and now is expected to at least double due to $2 billion due to the physical and economic damage caused Hurricane Sandy.
The Business Council firmly believes that the best solution to the state’s fiscal challenges is continuing its recent controls on state spending, and the adoption of reforms that promote renewed economic growth and the tax revenues it will produce. New York needs to build on its fiscal reform progress to date by:
- Addressing the growing fiscal impact of public employees and retiree health care costs. The Empire Center has reported that the combined unfunded liability for public-sector retiree health insurance for the state and its largest local governments, school districts and public authorities, is nearly $250 billion.
- Adopting a spending cap on all state expenditures, based on economic performance and growth.
- Avoiding any delays in the scheduled reclamation of deferred business tax credits. Some $2.2 billion credits were deferred for the 2010, 2011 and 2012 tax years, including major credit programs such as Empire Zones, Brownfield programs, and manufacturing investment tax credits. A Business Council priority will be to avoid any delays in the realization of these deferred credits, scheduled for reclamation starting in the 2013 tax year.
With health care costs rising by double digits this year in many of New York’s markets, the cost of health care remains the number one concern among all Business Council members. The additional complications related to development of New York’s health exchange makes it a particularly important time to continue opposing any legislation that would add additional costs to the state’s health care system or employer provided coverage. Our health policy agenda includes the following priorities:
- We will continue to insist that that the New York State Health Care Quality and Cost Containment Commission, established in statute in 2007 be empanelled and begin analyzing the impact on health-insurance costs of proposed legislative mandates. In addition to analyzing proposed legislation, we support an agenda of ”smart review” and evidence based plans of care, wherein existing health plan mandates are revisited to determine efficacy and medical necessity based on sound medical evidence.
- The Business Council opposes any new taxes associated with health insurance premiums, the implementation of PPACA and the Health Exchange. The funding of Exchanges should not be shouldered by New York’s employers. The Exchange is charged with being self-sustaining and any additional funding needed to support the endeavor must be broad-based and state-wide. Additionally, we oppose the federal health insurance tax (HIT), which imposes a tax on all written health policies and falls mainly on the backs of small businesses.
- Health Exchange Implementation - As DOH continues to develop the Exchange, many of the issues involved continue to require thoughtful and transparent dialog to ensure the Exchange does not exacerbate existing market problems, disrupt markets or create new market problems, and that costs are not shifted to a particular market segment for the benefit of sustaining the Exchange or products within the Exchange. We would oppose any attempts to limit plan design and choice inside and outside the Exchange framework. We support legislation to end the Healthy NY program given that as individuals move into the Exchange the need for the program ends.
- We continue to oppose any legislation that would mandate Out of Network provider payment levels or tie those payments to FAIR Health usual and customary rates. We support allowing health plans flexibility in designing appropriate out of network reimbursement standards, and for those standards to be clearly articulated in health plan documents. Given that the State Health Exchange chose Oxford’s EPO as its Essential Health Benefits benchmark plan, we would oppose the inclusion of an out of network mandate on Exchange plans. We will continue to advocate and participate in the Regional Advisory Committees for a robust Exchange that includes a role for brokers and Chambers of Commerce with appropriate compensation for services.
- New York consumers are at a distinct disadvantage when it comes to anticipating their health care costs due to “surprise billing” and “balance billing”. New Yorkers, who use any out-of-network services, generally don’t learn of the costs of their health care until after they have received the care and get the bill. Transparency is desperately needed in a world where the price of health care continues to rise, and employers and employees are given few tools to manage their costs. We support measures to mandate transparency in what physicians and hospitals charge for their services. Making meaningful health care price information available to consumers would help bend the health care cost curve.
An important aspect of economic recovery is a stable employment regulatory environment and the ability of employers to design pay and benefit programs that fit their industry, size, location, profitability and competitive environment, especially across state and national boundaries.. To achieve this objective, New York should:
- Adopt regulations allowing statutorily-authorized voluntary payroll deductions with maximum employer flexibility and minimal additional administrative requirements on employers.
- Repeal the requirement for annual pay notices and return signatures for all private sector employees in the state under the Wage Theft Prevention Act, whose next compliance date is February 1, 2013.
- Reject new pay mandates, including an increased state minimum wage and any extension of public works prevailing wage to private sector activities such as affordable housing construction, utility street excavation and off-site fabrication.
- Insure that “prevailing wage” determinations accurately reflect regional private sector wage levels.
- Encourage a competitive employer market environment by not interfering with voluntary time off and fringe benefit arrangements between private employers and their employees and unions.
Local Government Mandate Relief – Reducing the cost of state-imposed mandates long been seen as the quid pro quo of a real property tax cap, and would give local governments increased ability to control the spending side of their budgets. A joint administration/legislative mandate relief commission was formed in early 2011 and issued a “final” report later that year. However, only a limited number of mandate reforms have been adopted to date, in the areas of contract procurement, road and bridge maintenance costs, education and social service programs, and others. Significant reform measures include amendments to the state’s civil service law, public construction mandates and other areas hotly contested by organized labor. The Business Council is a member of the “Let NY Work” coalition, and supports its local government mandate relief package, which aims to:
- Mandate consideration of “ability to pay” and make other reforms in compulsory arbitration on municipal labor contracts.
- Reduce the costs of public construction by repealing the Wicks Law, reforming the Scaffold Law, and adopting the Public Construction Savings Act.
- Modify the Triborough Amendment to freeze step increases when public workers’ contracts expire.
- Establish minimum health insurance contribution levels for employees and retirees.
The Business Council supports legislation that will provide broad-based tax reform, as well as enhanced credits focused on key business sectors. Our major tax reform proposals include the following:
- Tax Credit Deferrals – For most business tax credits (key exceptions being Excelsior and film production credit), credits above $2 million per tax year for an individual taxpayer were deferred for tax years 2010, 2011 and 2012. Separate schedules for recovery are applicable to refundable and non-refundable credits, respectively, effect with tax years starting 1/1/13. The impact of this credit restoration is already included in the state’s fiscal plans. The Business Council opposed the initial deferral legislation, and will oppose any proposal to delay the recovery of deferred tax credits.
- R&D Credit – With all ten Regional Economic Development Council’s emphasizing the importance of “advanced manufacturing” and the development of new, emerging technologies, the state needs to do more to actively promote new and ongoing research and development investments. We are supporting adoption of an enhanced, refundable R&D investment credit for expenses on both depreciable and non-depreciable R&D related expenditures.
- Corporate/Bank Tax Reform – The Business Council supports broad based business tax reforms that improve the state’s economic climate. Key reforms include: a reduction in the ENI-based tax rate from 7.1% to 6.5% for all taxpayers, and a targeted reduction in the rate for manufacturers, with an ultimate target rate of 4% range; simplified compliance by requiring a single return for business currently subject to both Article 9A and Article 32; simplified rules for combined reports based on stock ownership, not “substantial inter-corporate transactions”; a reduced capital base cap applied to current Article 32 taxpayers; extension of single sales factor apportionment to current Article 32 taxpayers; allowing tax credits to be applied against the combined tax of a group, regardless of which member of the group earned the credits; and sourcing rules for determining in state receipts from financial transactions.
- First Quarter Payments – Amend the requirement that first quarter estimated corporate franchise tax payments be calculated based on the taxpayer’s estimate tax liability for the new tax year rather than a specified percentage of prior year tax liability.
- QETC – Legislation extending the qualified emerging technology credit program was vetoed in 2011, and the program sunset. In 2012, both legislative houses proposed legislation amending and extending QETC as part of this year’s budget debate, with a goal of eliminating eligibility “loopholes,” but no final action was taken. We are supporting reinstatement of a reformed QETC incentive program for small technology companies.
- Definition of Manufacturer – We support legislation to amend the corporate franchise tax definition of “manufacturer” to include taxpayers with significant instate manufacturing employment and capital, in order to maintain eligibility for manufacturing-related tax rates and tax credits, as opposed to the current corporate franchise tax definition of a defines manufacturer as a taxpayer or a combined group with more than 50% of gross receipts from manufacturing activities.
- RPT Administration – For many businesses, real property taxes are the largest tax paid in New York. The cap on RPT increases, coupled with local government mandate reform, will provide property tax relief over time. Council members have supported additional reforms in the administration of the state’s real property tax system including : incentives to move to county level assessments; adoption of fixed reassessment cycles; mandate for uniform, full market value assessments for all property classes; reforming the assessment challenge process.
- Pilots V. RPT Caps – Concerns have been raised that an unintended consequence of the 2% real property tax cap will discourage municipalities from authorizing PILOT agreements to support economic development projects. Under the cap law, assessed values of real property improvements associated with a PILOT agreement is ignored for purpose of calculating the cap’s “tax base growth factor,” which will result in lower maximum local revenues that if the PILOT did not exist – despite the impact of economic growth. The state needs to eliminate this unintended adverse impact on capital investment proposals.
- Hazardous Waste Assessments – We support legislation (see S.7281-A of 2012 session) that would clarify existing state law by explicitly exempting wastes generated in conjunction with a federal Superfund cleanup project from state special assessments, as is the case for state superfund projects, to reduce the cost of regulatory compliance in New York, and would promote the cleanup, resale and reuse of property.
- Sales Tax audits – Council members have raised concerns regarding the Tax Department’s use of external indices to determine sales and use tax due when the Department determines that a taxpayer has inadequate records, where such indices result in unrealistically high estimates of total revenues and sales tax liability. To address this, we support legislation - see S.4943 (Young)/A.8129 (Schimminger) of 2012 session – that requires such indices to reflect local economic conditions, to prevent the Department from using unrealistic assumptions in estimating taxable receipts.
The emerging technology and telecommunications sectors will provide a new economic infrastructure for the 21st century. It is essential that New York adopt policies to promote continued reinvestment in its tech sector that will help make New York’s economy more competitive.
- Continue to promote Broadband deployment across the state in rural and low income areas.
- Support innovative education training in science, technology, engineering and mathematics.
- Extend and expand the “qualified emerging technology company” tax credits for capital, operational and training investments.
- Adopt legislation that would prohibit the NYS PSC from imposing new regulations on phone services that use Voice over Internet Protocol (VoIP) technology.
- In order to encourage New York’s technology sector to continue to invest, innovate and grow jobs, avoid imposing any new or additional state/local tax or fee on telecommunications products and services.
- Review and repeal unnecessary, costly and burdensome state regulations on telecomm, Internet, cable service providers and other technology development that deters investment and the deployment of new services.
- Work with the Administration to ensure necessary information exchange between vendors and the Administration in contract procurement.
- Oppose adoption of the Call Centers Jobs Act that penalizes businesses for moving a discrete portion of its operations overseas, by restricting access to state contracts and loans.
New York’s legal environment consistently ranks as one of the worst in the nation. The state needs meaningful legal reform that respects the rights of all parties and helps reduce the state’s hidden “lawsuit tax.” We should:
- Adopt a comparative negligence standard to be used for actions brought under Labor Law Section 240/241, which currently imposes strict liability on employers and contractors for injuries related to falls, regardless of whether the worker refused to use safety equipment or was impaired by drugs or alcohol.
- Adopt a cap on the size of appeal bonds, to allow employers a fair chance to appeal significant potential bankrupting judgments.
Roads, bridges, ports, airports, railroads and public facilities require significant investments from the state and federal government for continued maintenance, reconstruction and modernization to ensure the efficient flow of goods, services and people. The enormous task of rebuilding New York’s aging infrastructure is complicated by a sluggish economy, burdensome state laws and regulations, already high levels of state and local spending and debt. Rebuilding New York’s aging infrastructure requires alternatives to the standard approach of financing, constructing and operating our transportation system. The state should look to more private transportation infrastructure investment and arrangements. New York needs to:
- Pursue public-private partnerships to reduce additional transportation related taxes and create and retain jobs by enactment of the Innovative Infrastructure Development Act and reestablishment of the state’s rail freight infrastructure public-private partnership program.
- Reestablish the original goals of the state’s Dedicated Highway and Bridge Trust Fund to road and bridge construction and repair by enactment of the Bridge and Road Investment and Dedicated Fund Guaranteed Enforcement (BRIDGE) Reform Act.
- Oppose ongoing efforts to enact the Transportation Industry Fair Play Act which would place unnecessary and costly additional burdens on New York’s commercial goods truckers.
- Support efforts to keep commercial vehicle tolls at levels that encourage increased commerce and economic development across the state.
New York has a broad tourism industry, including culture, history, restaurants, entertainment, destinations, parks and others. In FY 2013, a substantial investment was made to put I Love NY back in the media market. This was a significant first step but there is more we can do to help this statewide industry:
- Advocate for $15 million funding for statewide marketing programs (I Love NY), $5 million in County Matching Funds Program and $3 million to promote NYS wine promotion and research.
- Support additional funding for Open for Business and Regional Economic Development Councils.
- Advocate the reintroduction of S.6299-B (Martins)/A.9439-C (Goldfeder) which would create a clear definition of service charges versus gratuities in the Labor Law, including a statement that would limit retroactive liability for violations prior to the effective date of this statute.
- Continue to support efforts to spur economic development through expanding gaming options at existing facilities.
- Work to expand wine and beverage trails throughout NYS.
As the economic recovery continues to lag, the insolvency of New York’s unemployment insurance trust fund continues to impose significant additional costs on New York’s employers. The state needs to address the solvency of the UI trust fund, and to adopt a more sustainable UI system in New York. In doing so, New York should:
- Avoid shifting significant additional tax burdens to stable employers in any amendments to UI tax tables and taxable wage base.
- Develop a mechanism to achieve timely and affordable repayment of the state’s $3.4 billion in borrowing from the federal UI system.
- Avoid any UI benefit increases until trust fund solvency is addressed and achieved. Reject any proposal to index UI benefits or taxable wage base.
- Explore new approaches to unemployment insurance which might include a wage insurance component, e.g., UI maintains a base benefit level but provide employees with the option to provide additional coverage, at employee expense, for some form of “wage insurance.”
As illustrated in our recent Public Policy Institute report, the state’s workers compensation system is arguably more expensive now than before the 2007 reform legislation, due to a near doubling of maximum weekly benefits (and their indexing to increases in statewide wages), and due to slow and ineffective implementation of reforms intended to improve the program and reduce costs. Based on these findings, the Council will be pushing a new round of workers’ comp reform measures, to assure that intended cost savings are achieved, and to offset the costs of already provided benefit increases.
- Reform the scheduled loss of use methodology. The current process uses old medicine (1980s), old expectations (1996 guidelines) and gets inappropriate results, providing awards that are disproportionate to the injury suffered. SLU guidelines need to be updated in order to more accurately reflect the severity of an injury with respect to its effect on a claimant’s ability to perform necessary job duties, recovery time and amount of permanent disability. Educating judges, from a medical perspective, on how to apply SLU ratings and reducing the rate of compensation for SLU awards that are unrelated to any lost time would also make the system more equitable and affordable.
- The state should “De-index” the maximum weekly benefit from increases in the state average weekly wage. This change will help control growing program costs, allow for future necessary program reforms, and reduce any unintended disincentive for claimants to return to work. Since the reforms, the MWB has increased at approximately ten times the rate of increase in cost-of-living adjustments. At the minimum, there needs to be further examination of the MWB with respect to regional average weekly wages or a formula that would remove the highest and lowest paying sectors (finance/insurance and accommodation/food services) from the Average Weekly Wage.
- Assure timely application of PPD limits - The durational caps on permanent partial disability awards – a major cost saving reform built into the 2007 comp reform statute - must be fully implemented to achieve projected cost savings. To that end, we support measures to either statutorily mandate a presumption of maximum medical improvement two years from the date of injury or begin any cap on PPDs at date of injury. In addition, we must repeal the onerous Aggregate Trust Fund Deposit Mandate on Commercial Carriers.
- Panel care providers - We support mandating the use of panel providers for the first 90 days of treatment, allowing employers to post a list of designated health care providers and direct workers to select from the list when seeking treatment for a work injury or illness. Recent studies on the use of such panels in other states found that injured employees returned to work quicker, and reported greater satisfaction with the care they received.
- Self-insured trusts - The state must address significant financial issues related to defaulted self-insured trusts; including implementation of measures to support/expedite cost recovery from members of defaulted groups.
- Claim processes - There must be ongoing reviews of Board processes (including but not limited to those adopted as part of the 2007 reforms) to identify whether they have created additional frictional costs, or in fact have streamlined processes to allow for better efficiencies within the system. The Board should enhance efforts to streamline electronic data collection to weed out fraud and abuse and allow the public the ability to gauge the effectiveness of the system.
- Maintain cost-saving reforms - The Business Council will continue to oppose any attempts to undo any cost-savings measures from the 2007 reforms and will oppose any measures that would create additional costs to the Workers’ Comp system and New York’s employers.