Budget Negotiations Update

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GENERAL STATE SPENDING

Senate:

• Accepts Executive Budget's proposed $1.4 billion reduction in school aid:
  • provides schools with increased budget flexibility and mandate relief.
• Restores net $20 million in funding to SUNY.
• Restores $52 million in Medicaid funding.
• Increases Department of Transportation capital funding by $1.5 billion.
• Restores $150 million in aid to New York City.
• Proposes to make permanent the Executive Budget's proposed four year prohibition on unfunded legislative mandates on local government.
• Increases STAR program for seniors by $291 million.
• Reduces state workforce costs by $80 million.
• Proposes $100 million in savings by reducing excessive overtime expenses in state agencies.

Assembly:

• Restores $600 million in state school aid.
• Restores $334 million in health care spending reductions (including $126 million in state tax-supported spending).
• Accepts the Executive Budget's proposed $109 million cut to SUNY and $48 million cut to CUNY.

TAXATION/REVENUE

(Note: a complete comparison of Executive Budget, Senate and Assembly revenue proposals is available here.)

Senate:

• Rejects many of the Executive Budget's revenue proposals, including those to:
  • allow the sale of wine in grocery stores;
  • increase the excise tax on cigarettes;
  • tax sugared sodas and drinks;
  • change the tax treatment of resident non-testamentary trusts;
  • increase the MTA mobility tax rate for employers within New York City and reduce the rate for employers in suburban counties.
• Accepts the Executive Budget's proposals to:
  • extend the Bank Tax and Gramm-Leach-Bliley transitional provisions until 1/1/2011;
  • further limit brownfield redevelopment tax credits;
  • do statistical sampling for sales tax audits;
  • require the Tax Department to make recommendations on reforming telecommunications taxes;
  • modify the definition of affiliate nexus;
  • require informational returns by credit card settlement houses;
  • modify the QETC and biofuel credits.
• Proposes restructuring of tobacco settlement bonds.
• Proposes new/increased taxes on:
  • “little cigars;"
  • hotel rooms booked on the internet.
• Proposes to mandate that cigarette wholesalers sell only tax stamped packs.
• Proposes tax credit for payors of the MTA mobility tax.

Assembly:

• Rejects many of the Executive Budget's revenue proposals, including those to:
  • allow the sale of wine in grocery stores;
  • increase the excise tax on cigarettes;
  • tax sugared sodas and drinks;
  • change the tax treatment of resident non-testamentary trusts;
  • increase the MTA mobility tax rate for employers within New York City and reduce the rate for employers in suburban counties;
  • further limit brownfield redevelopment tax credits;
  • require the Tax Department to make recommendations on reforming telecommunications taxes;
  • modify the definition of affiliate nexus;
  • modify the QETC and biofuel credits;
  • change the tax treatment of resident non-testamentary trusts.
• Accepts the Executive Budget's proposals to:
  • extend the Bank Tax and Gramm-Leach-Bliley transitional provisions until 1/1/2011;
  • increase cigarette taxes by $1 per pack;
  • do statistical sampling for sales tax audits;
  • require informational returns by credit card settlement houses.
• Proposes elimination of sales tax exemption for certain mailed promotional materials.
• Proposes elimination of the sales tax exemption for energy service companies.

ECONOMIC DEVELOPMENT

Senate:

• Rejects Executive Budget's proposals that would:
  • create a new Excelsior Jobs program;
  • merge economic development agencies and authorities;
  • create a $100 million Innovation Economy matching grants program.
• Accepts the Executive Budget's proposals that would:
  • subject already-accepted brownfield projects from last year's limitations on investment credits;
  • adopt $2.1 billion/five year extension of the Film Production Tax Credits;
  • fund the Economic Development Fund for $31.2 million;
  • adopt technical amendments relative to the Empire Zone investment tax credit.
• Modifies Executive Budget's proposals that would:
  • create $25 million Small Business Revolving Loan Fund to increase its focus on M/WBEs;
  • create a $25 million Seed fund to require regional distribution.
• Proposes the “Open for Business NY Program” which includes:
  • job tax credits between $2,500 and $10,000 for each new job;
  • a 10 percent investment tax credit;
  • new research and development tax credit equal to 10 percent of a business' federal R&D credit;
  • property tax credit for businesses locating in distressed communities.
• Proposes $50 million in new funding for RestoreNY.
• Proposes a “Main Street Initiative” to support small business, including:
  • increased funding for small business assistance centers;
  • micro-loan revolving loan fund;
  • $15 million North Country Revolving Loan Fund;
  • Bio Fuels Incentive Loan Fund.
• Proposes a new film post-production tax credit.

Assembly:

• Rejects Executive Budget's proposals that would:
  • create a new “Excelsior Jobs” Program;
  • merge economic development agencies and authorities.
• Accepts the Executive Budget's proposals to:
  • adopt a $2.1 billion/five year extension of the Film Production Tax Credits;
  • adopt technical amendments relative to the Empire Zone investment tax credit.
• Modifies the Executive Budget's $25 million Small Business Revolving Loan program and the $25 million Seed Venture Fund (provides for regional allocations).
• Proposes new “Empire Zone Innovation Program” that:
  • retains current Empire Zone “Investment zones” (mostly city-based zones); benefits available for “high tech, high growth” businesses that create at least 5 jobs;
  • retains current Empire Zones “Regionally Significant Projects” (e.g., manufacturers that create 50 jobs);
  • retains current QEZE wage credits; adopts Executive Budget's proposed restructuring of investment and research credits; limits real property tax credits to five years and reduces its value.
• Proposes that QEZE de-certifications under last year's Empire Zone reforms be effective for tax years beginning on or after January 1, 2008.
• Proposes to merge Empire State Development Corporation, NYSERDA, NYSTAR and the Jobs Development Authority into a single economic development agency.

CONSTRUCTION

Senate:

• Proposes the “New York State Construction Industry Fair Play Act” that establishes a presumption that all workers at a construction site are employees.

Assembly:

• Proposes the “New York State Construction Industry Fair Play Act” that establishes a presumption that all workers at a construction site are employees.

CONTRACT PROCUREMENT

Senate:

• Accepts the Executive Budget's repeal of the fee contractors were to collect on sales from centralized contracts administered by OGS.
• Modifies Executive Budget's proposals to:
   
  • increase procurement flexibility for local governments;
  • adopt a SUNY/CUNY Empowerment Act.

Assembly:

• Rejects the Executive Budget's proposed SUNY/CUNY Empowerment Act.
• Accepts the Executive Budget's repeal of the fee contractors were to collect on sales from centralized contracts administered by OGS.
• Modifies the Executive Budget's proposals to increase procurement flexibility for local governments.

ENERGY/TELECOMMUNICATIONS

Senate:

• Rejects Executive Budget's proposal to:
  • impose excise fee on, and additional DEC staff for, regulation of Marcellus shale drilling;
  • allow increase in city/village-imposed utility gross receipts taxes.

Assembly:

• Rejects Executive Budget's proposal to:
  • impose excise fee on, and additional DEC staff for, regulation of Marcellus shale drilling;
  • allow increase in city/village-imposed utility gross receipts taxes.
• Proposes to eliminate sales tax exemption for ESCO services.

ENVIRONMENT

Senate:

• Restores $79 million to the Environmental Protection Fund.

Assembly:

• Restores $25 million to the Environmental Protection Fund; adds back $44 million for state land purchases.
• Proposes to eliminate the $1.2 million small business pollution prevention program.
• Proposes e-waste recycling program mandate on manufacturers.
• Proposes new hazardous waste generator surcharges ranging from $1,000 to $65,000.
• Proposes to shift $20 of the $27 hazardous waste special assessment on land-filled wastes from the generator to the land fill operator.

FINANCIAL SERVICES

Senate:

• Rejects Executive Budget's proposal to restore prior approval of health insurance rates in the group market.
• Accepts the Executive Budget's proposal to collect “surplus funds” from workers' comp insurance carriers.
• Proposes to require commercial insurance carriers to cover “evidence based practices and services” for autistic children.

Assembly:

• Rejects Executive Budget's proposal to:
  • allow local governments to make deposits in credit unions, savings banks and savings and loan associations.
• Accepts the Executive Budget's proposal to:
  • restore prior approval of health insurance rates;
  • collect “surplus funds” from workers' comp insurance carriers;
  • reduce the state subsidy of costs to small business for “Timothy's Law” coverage.

HEALTH CARE

Senate:

• Rejects Executive Budget's proposed “code of conduct” for pharmaceutical marketing.

Assembly:

• Rejects Executive Budget's proposed “code of conduct” for pharmaceutical marketing.
• Accepts Executive Budget's proposed HCRA surcharges and increased hospital inpatient assessment.

TORT REFORM

Senate:

• Rejects Executive Budget's proposed legal reforms for the Metropolitan Transportation Authority.

Assembly:

• Rejects Executive Budget's proposed legal reforms for the Metropolitan Transportation Authority.