This Week in Government Affairs
January 10, 2013
- State of the State
- Campaign Finance Reform
- Economic Development
- Education / Workforce Development
- Health Care
- Labor / Human Resource
- Unemployment Insurance
- Workers' Compensation
Governor Cuomo presented his 2013 State of the State message yesterday; the complete address is available here.
The Governor extended his commitment to controlling state spending and avoiding new or increased broad-based taxes. In our view, New York is in a better position today due to the enactment of critical reforms backed by The Business Council, including a 2 percent cap on the growth of property taxes; pension reforms; a new, permanent economic development low-cost power program and a fiscally responsible state budget.
We also applaud the Governor’s focus on improving the performance of the state’s education and workforce development programs to assure that we have the skilled workforce necessary to support future economic progress. He also proposes important unemployment insurance and workers compensation program reforms designed to provide across-the-board savings for business.
Recognizing both the economic challenges and opportunities facing New York, and in particular upstate New York, he has proposed several innovative approaches to supporting new business growth, especially in the technology sector. We look forward to reviewing the details of his economic development proposals.
However, we also have concerns regarding several initiatives that could impose new costs or new barriers on business. These include: significant new energy initiatives funded, at least in part, through increased rates or assessments; new “pay equity”-related enforcement mechanisms; an increased state minimum wage; tighter regional carbon emission limits that will increase energy costs on consumers; and others.
As we start a new year and a new legislative session, The Business Council looks forward to seeing the details on the Governor’s proposals and continuing our strong working relationships with the Governor, the Senate and the Assembly.
The following provides an issue by issue overview of the State of the State message:
In addition to Election Law reforms relating to voting and voter registration, the Governor proposed reforms that would impact the involvement of interest groups in the political process. These include:
- Requiring “political or lobbying contributions” of more than $500 be disclosed within 48 hours.
- Requiring contributions to a PAC, lobbying 501 (c)(3), other 501 (c) organizations, political committee, or political party over $500 to be disclosed within 48 hours; 24 hours leading up to election day.
- Expanding and clarifying the types of political communications that must be reported to and filed with the Board of Elections by candidates, labor organizations, corporations, political committees, and other entities as well as contributions made to the entity that paid for the communication.
- Aggressive enforcement of the State’s campaign finance laws through the State Board of Elections.
- Creating a public financing program similar to the existing system in New York City, to be funded in whole or part by “sources beyond general revenues from taxpayers.”
- Lower contribution limits for all candidates, including limits on contributions between political party accounts.
In addition to citing progress on the Tappan Zee Bridge replacement project, the Governor proposed:
- $1 billion in investments to preserve and create 14,000 affordable housing units statewide.
- Updating of the state’s building codes to improve storm resilience of structures in vulnerable locations.
Numerous provisions of the State of the State message had economic development impacts. Specific economic development initiatives include:
- Designation of a tax-free “innovation hot-spot” in each of ten economic development regions to promote commercialization of new technologies and products by start-up companies.
- Creation of the Innovation NY Network—based in part on San Diego’s CONNECT model—to “build collaborations among academics, venture capitalists, business leaders, patent lawyers and other professionals and entrepreneurs to facilitate and grow the commercialization process.”
- Creation of a $1 billion “Green Bank” to leverage public funds with private matching funds to promote clean energy and clean tech; using a portion of Energy Efficiency Portfolio Standards, Renewable Portfolio Standards, and/or System Benefit Charge funds to leverage private investment.
- Creation a $50 million Innovation Venture Capital Fund.
- Increased opportunities for minority/women-owned enterprises in state contracting.
Linking job creation and education improvements, the State of the State message included recommendations to:
- Extend learning time, whether through longer school days, a longer school year, or both.
- Implement full-day pre-kindergarten for the lowest wealth school districts.
- Incentiving high performance from teachers.
Noting that there are currently 210,000 unfilled private sector jobs in New York, the Governor underscored the need for programs that match labor force demands and offered a proposal to help bridge the gap between high-tech research and in-state commercialization. The Governor recommended changing the manner in which community colleges receive state funding from the current enrollment-based formula to one based on student success—gauged by an alignment of programs with regional workforce needs and student achievement in terms of certification and placement in good-paying jobs.
The State of State included an expansive set of energy initiatives, including:
- Extend the NY-Sun Solar Jobs Program through 2023 at the existing annual funding levels established under the program, resulting in $150 million in annual funding for ten years.
- Create a statewide network of 3,000 public and workplace charging stations, and funding primarily from investor-owned utilities for incentives for PEV deployment.
- Create a cabinet-level energy czar; Governor Cuomo has appointed Richard Kauffman to join his Cabinet as Chairman for Energy Policy and Finance for New York State.
- Work with other RGGI states to reduce the program’s emissions cap at a level below current levels, with $100 to $150 million in revenue from additional RGGI proceeds to be invested in repowering existing power plants and assisting communities impacted by the closing of coal fired power plants; and a portion of proceeds dedicated to strengthening the storm defenses.
- Promote micro-grid “islanding” to provide power to pockets of consumers when central power plants or portions of the transmission and distribution system are inoperable.
- Support for time of use energy rates, with utilities charging prices that vary by time-of-use, reflecting the actual cost of energy production in real-time, coupled with advanced metering, the system efficiency will increase by reducing peak demand, to reduce the need to build costly infrastructure to meet peak demand.
- Direct the Public Service Commission to require utilities to submit plans to strengthen distribution systems against flooding, replace wood poles with metal poles to limit the risk of damage; install state-of-the-art, remote condition monitoring equipment to allow real-time monitoring of lines without manual inspection; accelerate pipeline replacement programs in flood prone areas; install remotely operated natural gas control valves to limit the impact of any disruptions.
- Enhance PSC utility oversight, regulatory and enforcement capabilities.
- Privatization of the Long Island Power Authority, including the disposition of LIPA’s assets to a qualified Investor-Owned Utility (IOU) that would serve as the sole utility manager and operator to the existing LIPA service area.
A relatively limited health care agenda included:
- Improvements in the quality of care in hospitals, with a focus on implementation of best practices to identify and respond to sepsis infections.
- Improvements in the quality of care and oversight of health care in pediatric settings to address unique issues affecting health care delivery to children.
Major initiatives include the following:
- Increase the state minimum wage to $8.75 per hour.
- Adopt a 10 Point “Women’s Equality Act” which includes:
- Passage of pay equity/comparable worth legislation which would increase damage awards; limit allowable pay differential justifications; and prohibit employers from terminating employees for sharing pay information.
- Eliminate the current less-than-four-employees exemption from current sexual harassment laws and allow the payment of attorney’s fees to litigants in successful employment discrimination cases.
- End family status discrimination by prohibiting employers from denying work and promotions to employees because they have children.
- Ending pregnancy discrimination in the workplace by requiring accommodation in the workplace for pregnancy that does not involve a disabling condition.
The Governor proposed:
- A “Cyber Security Initiative” that would include: a new state facility for monitoring cyber and physical aspects of critical infrastructure; integration of The New York State Intelligence Center (NYSIC) and the Multi-State Information Sharing and Analysis Center (MS-ISAC) into one; and creation of a Cyber Security Advisory Board to advise the state on best practices.
- An “Open New York” that would use technology to promote transparency in government and to improve government performance; provide easy access to statewide and agency-level data, reports, statistics and other information; and allow data to be presented in an easy downloadable format through its web portal.
Tourism initiatives include:
- A new “Taste NY” program to promote NY food products with an aggressive branding and marketing campaign, including Taste NY branded retail sites that would sell New York products (where appropriate) duty free.
- A new “Market NY” program, focusing on the Upstate economy, to coordinate regional marketing efforts; it includes a $5 million advertising competition for the best regional marketing plans.
- A state-sponsored national rafting and paddling competition call the Adirondack Challenge.
- As the constitutional amendment on casino gaming moves forward for a second required vote by the State Legislature, The Governor will propose to an implementation plan to: site up to three casinos in Upstate, but none New York City; authorize The Gaming Commission to pick the best locations with local government and community support; and direct 90 percent of resultant state revenue to education and 10 percent towards local property tax relief.
The Governor proposes reforming the unemployment insurance system to increase benefits while providing employers with more predictability by:
- Paying off the state’s $3.5 billion UI fund debt (through increased UI taxes) by 2016, saving $180 million in interest assessments, and re-building solvency in the trust fund and creating future reserves.
- Decreasing costs to employers by approximately $400 million through reforms addressing work searches and reducing fraud, and protecting employers from inappropriate UI account charges.
The Governor will introduce legislation to reduce the cost and improve the administration of the workers’ compensation system by:
- Eliminating unnecessary friction in the system.
- Resolving insolvent Group Self-Insurance Trust (“GSIT”) issues through a bonding program to help defaulted and inactive trusts purchase assumption of liability policies and settle employer liability.
- Combining current five WCB assessments into a single assessment.
- Promoting system-wide transparency, efficiency, equity, and consistency.
The Governor projects that the proposals to reform the Workers’ Compensation and Unemployment Insurance programs will result in $1.3 billion in savings to businesses.