This Week in Government Affairs
March 13, 2013
- Budget Update
- Unemployment Insurance Reform
- Workers' Compensation
- 18-A Energy Assessment
- Minimum Wage
- IDA Sales Tax Abatement
- Economic Development Capital
- New Issues
Both the state Senate and Assembly have introduced amended budget legislation and yesterday passed their respective one house budget resolutions. We have updated our online Executive Budget summary to indicated the legislative counter-proposals. We have also posted the full Senate budget resolution and Assembly summary of amendments on our web site here.
A summary of legislative acceptance of, and or changes to, priority Business Council issue areas is provided below.
Please feel free to Ken Pokalsky with any questions, comments or additional concerns.
The Senate accepted the Governor’s proposal in its entirety. The Assembly adopted proposed taxable wage base increases; proposed UI tax table changes, but with a January 1, 2017 sunset; and proposed schedule of benefit increases. The Assembly rejected proposed cost-savings reforms including mandatory job search contacts, increased base period earning requirements, and use of two high quarter averaging for determining UI benefits. The Assembly also modified the proposed criteria for determining fund solvency.
Both houses accepted the Governor’s proposals for DASNY bonding for refinancing of insolvent trusts and increased minimum weekly benefit to $150. The Senate accepted, with slight modification, the proposal to close the “reopened case fund” and elimination of mandatory deposits into the ATF, while the Assembly rejected both proposals. The Senate rejected the proposed sweep of State Insurance Fund assessment reserves for support of the state’s capital budget, while the Assembly approved the sweep, but used the funds to support general state spending, including proposed increases in municipal and school aid. The Senate accepted the proposed restructuring of WCB assessments, while the Assembly generally accepted these changes, except as it related to the ATF and reopened case fund.
The Senate rejected the Governor’s proposed 5 year extender, and restored the permanent assessment to no more than 0.3%, its pre-2009 level; the Assembly accepted it.
The Senate resolution said they would consider modifications to the Governor’s proposal; the Assembly package contained no minimum wage provisions, having previously passed a bill to increase the minimum wage to $9.00 per hour on January 1, 2014 with automatic COLA adjustment annually thereafter.
Both houses rejected the Governor’s proposal to limit applicability of state sales tax abatement for IDA assisted projects.
Both houses rejected the Governor’s proposed $165 million for economic development grants and $150 million in capital for the Regional Economic Development Council (REDC) (the Senate doing so “without prejudice.”) The Assembly offered a reconfigured economic development capital program.
With Business Council support, the Senate proposed Excelsior job tax credit reforms, including: reduction in job creation threshold for program eligibility (including reduction from 25 to 10 new jobs for manufacturers); increase in the refundable Excelsior investment tax credit from 2 to 5 percent; real property tax credit made available in economically distressed areas (rather than old Empire Zone “investment zones); pro-rating of tax credits in any tax year that applicant achieves 75% or more of job projections. They also increased the annual tax credit cap for tax years 2013 through 2024, but did not allow for the carry-over of unused credit capacity to future fiscal years.
The one-house budget proposals include a number of new initiatives of broad interest to Business Council members. They include:
- The Senate included a number of new economic development and tax reform proposals, including (in their resolution, not budget bill) phase-out of corporate franchise tax liability for small businesses and manufacturers; a new asbestos remediation credit; reforms to the state’s brownfield program; and others.
- The Senate re-proposes legislation to mandate insurers pay out-of-network providers "usual and customary cost," meaning 80th percentile of FAIR Health, a proposal we see as increasing health insurance premiums.
- The Senate proposes a new assessment on out of state electric generators selling power into New York, intended to provide parity with in-state generators whom are required to participate in RGGI, but imposing new costs on business and residential customers.