Gov. Andrew Cuomo touted the fourth straight on-time New York State budget as a “grand slam.” The baseball reference complemented last year’s hockey reference to a “hat trick” of three on-time budgets in a row. No. 4 was no small feat, because it’s the first time legislators have accomplished this since the Rockefeller administration. However, while the budget swung for the fences and brings home plenty of positive results for the business community and local economic development, it also swung and missed on some issues.
Hit: Tax reform reduces the tax rate on corporate net income from 7.1 percent to 6.5 percent beginning in 2016, creates a new 20 percent real property tax credit for qualified manufacturers and eliminates the entire net income tax on qualified manufacturers. The plan also increases the exemption threshold for estate taxes to $5.25 million over time and accelerates the phase-out of the 18-a energy surcharge. These actions all have potential for job growth and put New York in a more competitive position to attract and retain employers.
Miss: The budget did not address the Wage Theft Prevention Act’s annual notification requirement, a costly and unnecessary mandate on employers. Rochester Business Alliance has repeatedly expressed support for legislation to repeal the annual notification provision. Under current law, private-sector employers are required to provide a written pay notice to all employees in New York every year. This is the same information already included on pay stubs. The annual notification requirement imposes substantial administrative costs on every private employer in the state with little, if any, additional benefit. The YMCA of Greater Rochester, an RBA partner member, reported that it spends nearly $27,000 a year to comply with this unnecessary burden.
Hit: Several items on the Rochester Community Coalition’s Community Agenda received support in the 2014-15 state budget. Those include $6 million in additional unrestricted aid for the city of Rochester, $872,000 for Rochester Institute of Technology’s Center of Excellence in Sustainable Manufacturing, $872,000 for the University of Rochester’s Center of Excellence in Data Science, a $34 million increase in statewide child care funding, and aid for priority projects of the Finger Lakes Regional Economic Development Council, including $33 million for the Science, Technology and Advanced Manufacturing Park in Genesee County and $450,000 for the Wyoming County Agriculture Business Center of Excellence. The budget also supports the redevelopment of Eastman Business Park, the regional council’s top priority.
Miss: The spending plan did not address reform of the antiquated Scaffold Law despite its $785 million annual cost on public projects paid for by taxpayers. The law also adds about $10,000 to the construction cost of a new home. The Scaffold Law, which dates back to 1885, holds contractors and property owners fully liable in lawsuits for gravity-related construction injuries, regardless of partial contributing fault by a worker. New York is the only state with this law still on the books. Reforming the Scaffold Law will reduce the costs for taxpayer-funded capital projects, boost job creation, stimulate the economy and generate tax revenue.
Hit: The budget did not include support for legislation mandating paid family leave. This is a big win, since the legislation could have required employers to provide six weeks of paid leave in circumstances that qualify. It also had the potential to increase disability benefits from $170 to $700 a week over a three-year period, which would significantly increase disability insurance costs for employers.
Miss: The spending plan did not include Gov. Cuomo’s original proposal to extend and reform the Brownfield Cleanup and Superfund programs, which are set to expire next year. The proposal includes a 10-year extension of the cleanup program and a change in how the state administers tax credits. State DEC Commissioner Joe Martens recently held a forum at RBA to talk about the reform plan. Martens said, “It’s good news for the average taxpayer. It targets the credits to properties that would otherwise stay vacant—hopefully, motivates developers to put those properties back into productive economic use, so that’s going to generate tax income.”
Hit and miss: Common Core. The budget rightly preserves Common Core standards designed to elevate and measure student achievement, but it delays the use of student test scores for two years. Forty-four states are advancing the use of Common Core standards, and New York should continue to push for their full implementation.
Rochester Business Alliance will continue to advocate on these and other issues of importance to the employer community through the remaining weeks of the legislative session.
Sandra Parker is president and CEO of Rochester Business Alliance Inc. Contact her at SandyP@RBAlliance.com.
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