2014 State of the State Message
Statement on Governor Andrew Cuomo’s 2014 State of the State address from Heather C. Briccetti, president and CEO of the Business Council of New York State:
The Business Council of New York State applauds the Governor’s continued commitment to improve the state’s business climate. There is much for business in New York to be encouraged about in Governor Cuomo’s State of the State address. His continued emphasis on holding growth in overall state spending to under 2 percent is for another year is welcomed news.
The Business Council applauds the Governor’s tax relief proposals that will provide more than $2 billion in savings to New York employers and residents. This is big news for the state’s economy, especially upstate, as these tax cuts will provide broad-based business tax relief, and support key business sectors across New York.
The Business Council represents a wide range of enterprises across the state, all of whom are affected by regulations and we look forward to working with the Governor and the Legislature in establishing in a joint commission to identify ways to eliminate regulatory barriers that make it difficult to do business in New York State and hinder economic growth.
We await further details in the Governor’s budget proposal and stand ready to assist the Governor in making these important real through the Legislative process.
(Note: A video version of this statement is available here; the State of the State message and related information is available here.)
Overview of Key Provisions
The Governor reiterated his call for ethics reform, including:
- a public financing system for political campaigns,
- increase disclosure of independent expenditures by broadening the definition of electioneering activity and requiring disclosure of “significant” donors,
- lower contribution limits,
- limited transfers from political party committees,
- lower contribution limits for party committees and limits on party committee “housekeeping” accounts,
- closing the LLC “loophole” (no specific proposal),
- creating an independent enforcement unit,
- increasing disclosure of a legislator’s outside business interest including disclosing a legislator’s firm clients that have business before the state, the services they provide and any direct referrals of business by lobbyists or clients thereof,
- changing the burden of proof required for bribing a public servant by bringing state law in line with federal law,
- increasing penalties defrauding the government, public corruption, and official misconduct, including lifetime bans from holding any office, serving as a registered lobbyist or doing any business with the State,
- misdemeanors for any public official or employee to fail to report bribery, and
- use immunity rather than transactional immunity for fraud and misconduct-related grand jury testimony.
The Governor provided a new level of attention to infrastructure projects in the state including:
- providing an additional $100 million for construction and preservation of 3,000 affordable housing units,
- $5 billion to harden the NYC subway system,
- State control of reconstruction and improvements at JFK and La Guardia airports,
- a DOT study on a Northern Tier Expressway to connect I-81 in Watertown and I-87 in Plattsburgh, and
- a $16 billion infrastructure construction effort, including new federal funding, encompassing 1,000 individual projects.
- a “GlobalNY” initiative coupling Start-up NY with the regional councils effort to promote increased export business and direct foreign investment,
- implementing the casino siting process to complete reviews and announce locations and operators by fall of 2014,
- a food-to-table agricultural summit to promote downstate markets for state food producers,
- a new NY Genomic Medicine Network to promote gene-based research and medicine production, focused in Buffalo,
- improved North Country transportation routes, and
- upgrades at LaGuardia and Kennedy airport, with state assuming responsibility of re-construction projects.
The following initiatives were highlighted by the Governor in his State of the State message:
- expand the NYS-PTECH program with a second round of funding for at least 10 more schools, one in each of the state’s economic development regions,
- a $2 billion bond referendum for school-based investments in tablets, computers, servers, interactive whiteboards and high-speed broadband connectivity,
- statewide, universal full-day pre-kindergarten,
- A new Teacher Excellence Fund, with teachers rated as “highly effective” would be eligible for up to $20,000 in annual bonuses,
- a tuition scholarships proposal to allow the top 10 percent of high school graduates to attend SUNY and CUNY tuition-free if they pursue a STEM career and work in-state for five years,
- an expanded NYSUNY 2020 and NYCUNY 2020 with new awards for plans that: use technology to expand access to degree programs and accelerate degree completion; utilize the START-UP NY program; and provide experiential learning opportunities,
- remove barriers to school district mergers and the sharing of services, and
- create the SUNY College of Emergency Preparedness, Homeland Security and Cybersecurity to offer bachelor’s degrees and certificate programs in fields such as emergency preparedness, intelligence, forensics, etc.
The 2014 State of State included numerous new energy initiatives and expansion of current energy initiatives, including:
- accelerate the phase-out of the 18-A utility surcharge, including immediate repeal for industrial customers, with $200 million in year-one relief.
- expedite transmission projects that rely on existing transmission corridors and state-owned rights-of-way,
- the Community Grids NYPrize, a $40 million competition to help build “community grids” for areas with approximately 40,000 residents each,
- the PSC and the State will work with utilities and private developers to reform regulatory and financial hurdles to promote development of at least ten community grids and micro-grids,
- promote and advance Low-Emission Biomass Heating Initiative through the Renewable Heat NY program, which is committed to help the high-efficiency and low-emission biomass heating industry reach scale,
- provide state support for sustainable forestry practices for small and large landowners to maintain and enhance the long-term health and productivity of New York’s forests, and
- establish the “Community Solar NY,” a comprehensive community solar package that will include “K-Solar,” a program to provide incentives, financing, and technical assistance to school administrators interested in reducing energy costs and creating healthier environments for students through on-site solar installations.
The 2014 State of State also included a special focus on hardening and improving of electrical power systems, with $1.4 billion to support the following:
- Strategically bury and harden the most vulnerable transmission and distribution circuits,
- Raise up to 36 flood prone coastal power transmission and distribution substations above ground,
- expand tree trimming and elevating lines over elevated homes, and
- Install a new outage management system to improve PSEG-Long Island’s outage restoration capabilities.
Many of these proposed projects address recommendations set forth by the Governor’s 2100 Commission, which was convened after Superstorm Sandy to identify critical infrastructure improvements that should be made to protect the state’s residents and communities.
The State of the State includes a number of environmental capital improvement initiates to assist the State’s infrastructure to better withstand major weather incidents, including the following:
- assistance to upgrade protections for waste water treatment plants and systems,
- development of a comprehensive statewide extreme weather prediction system,
- establishment of measures to protect New York’s transportation infrastructure,
- restore and expand protections against flooding using the latest innovative designs and strategies for long-term success in preventing and minimizing damage from flooding, and
- expand the Fuel NY Initiative to create an Upstate Resilient Fuel Infrastructure.
Major health-related initiatives include the following:
- the Department of Health will promulgate regulations creating a program that will allow up to 20 hospitals to provide medical marijuana to patients,
- the state will create eleven Regional Health Improvement Collaboratives (RHICs), based on the model established in the Rochester region, designed to improve health care quality, health outcomes, and population health, reduce health disparities and lower per capita costs, and
establish the NY Genomic Medicine Network as a partnership between the recently opened NY Genome Center in New York City, the University at Buffalo and Roswell Park Cancer Institute.
The Governor applauded his agencies for exceeding the 20 percent goal of using certified MWBEs for state contracts and this year will focus on:
- certifying additional MWBEs by an additional 2,000,
- directing state agencies to meet a 5 percent goal for contracting with disabled veteran owned businesses, and
- modernize classrooms and provide students with expanded technology (For more information refer to the Education section.)
The State of the State message reiterated tax reform initiatives announced earlier. They include:
- merge the bank tax into the corporate franchise tax, reduce the general CFT rate to 6.5%, and make a number of reforms to the CFT,
- adopt a refundable corporate franchise tax credit for upstate manufacturers (outside the MTA region) equal to 20 percent of a firm’s annual real property taxes,
- phase-out corporate franchise tax liability for manufacturers located outside of the MTA region,
- accelerate the phase-out of the Section 18-A assessment electric, gas, water and steam utility bills, including an immediate repeal of the assessment for industrial customers,
- increase New York’s estate tax threshold to $5.25 million and lowering the top rate to 10 percent over four years,
- adopt a two year freeze on property tax increases paid by homeowners (actually a state rebate of the increased taxes paid), within jurisdictions (outside of New York City) that stay below the 2% real property tax cap and that agree to implement a shared services or administrative consolidation plan,
- a permanent, enhanced real property tax circuit breaker that would become effective as the “freeze” phases out, applicable to households with up to $200,000 - again, applicable in jurisdictions outside of NYC that adhere to the 2% RPT cap. It would be administered as a refundable tax credit against the personal income tax, and
- a renters’ tax credit applicable statewide for households with incomes below $100,000, through a refundable personal income tax credit that increases with family size.
In addition, it proposed increasing the Youth Works tax credit program to $10 million per year, increasing the maximum per-job credit by $1,000, and providing state funding for training necessary to hire an eligible youth.
The Governor proposed:
- the creation of the SUNY College of Emergency Preparedness, Homeland Security and Cybersecurity, a degree granting college to integrate emergency preparedness, security and cybersecurity studies through interdisciplinary programs, and the creation of academic programs and research and training for students, policy leaders, emergency managers and first responders.
The Governor stated that tourism spending in the State has increased $4 billion, almost twice the national average and the industry is estimated to have added almost 25,000 jobs in 2013. The messaged continued a focus on tourism as an economic driver, particularly for Upstate NY, and included the following tourism initiatives:
- a new tourism signage campaign and mobile app,
- a Beer, Wine & Spirits Summit, a Tourism Summit and a Upstate Downstate Food-to-Table Agriculture Summit, to link the upstate agriculture industry to downstate consumers.
- a NYS Adventure License, integrating drivers, sportsman and boating licenses,
- opening of fifty State-owned properties for outdoor recreation,
- additional natural infrastructure projects in urban areas and along coastlines,
- improving online marketing of state parks and create a more user-friendly experience with mobile apps, guides and maps,
- an RFP for the four upstate casino licenses to be released in March 2014 with bids due in June and announcement of awardees this fall,
- modernize JFK and LaGuardia airports with amenities such as on-site hotels, high quality retail shopping, popular NYC restaurants and free Wi-Fi service, and
- a BassMaster Elite Series tournament in August 2014 featuring a fishing competition with the Governor, elected officials and big names in professional fishing.
- The Governor proposes a joint administration/legislative commission to identify and reduce regulatory burdens on business.
- Create the New York Small Business Mentoring Network to link volunteer business coaches/mentors with entrepreneurs in specific industry sectors.