FY 2014 Final Budget Summary

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Allows food grown or processed in New York to be procured by a state agency without competitive bidding, up to $200,000 per contract. (S.2605-B/A.3005-B, Part P).

Adopts the executive's proposal to allow some food products to be procured by an agency without competitive bidding, up to $200,000 but only allows food, including milk and milk products that are grown, produced or harvested in New York. Also requires agencies that wish to purchase such commodities to advertise on their website any purchases that exceed $50,000 and they must make the purchase based on the lowest price meeting the form, function and utility as required by the agency. (S.2605-D/A.3005-D, Part P). 

Allows any state agency, public corporation or other public entity to enter individually or collectively into contracts with the not-for-profit corporation that operates the multi-state information sharing and analysis center for services related to cyber security through September 30, 2014 without competitive bidding, subject to OSC approval where applicable. This includes services for monitoring, detecting and responding to cyber incidents. (S.2605-B/A.3005-B, Part N).

Adopted.

Additional Provision Added

Amends the Small Business Revolving Loan Fund to allow MWBEs and other small businesses that receive loans to also be eligible to accept short-term financing loans provided under a new section eleven. This new provision allows Empire State Development Corporation to also provide at least $500,000 in program funds to lending organizations for the purpose of making short-term financing available to MWBE and other small businesses performing contracts to provide construction or professional services for state procurement purposes. These loans will be used to underwrite the cost of labor materials, and equipment directly associated with the contract being financed or a contract that has been satisfied for which the business is awaiting payment from the state. (S.2609-D/A.3009-D, Part II).

State aid increases continue to be linked to compliance with the teacher and principal evaluation process; districts will be ineligible for school aid if they have not fully implemented the teacher evaluation process for the 2013-14 year by September 1, 2013. The budget provides a 3.3 percent increase in school aid for the 2014-15 school year, based on projected growth in New York State personal income.

Accepts state aid increases linked to implementation of teacher evaluations. Includes a nearly $1 billion increase in education aid. Provides that if a district does not have a performance review plan approved by the commissioner for the applicable school year as of September 1 of that year, the most recently approved plan will remain in effect until a subsequent plan is agreed to.

Adds a new section 4403-a to the state Education Law (Waivers from certain duties). Allows school districts, BOCES and approved private special education programs to petition the SED for flexibility from certain special education mandates.

         Does not include provision on waivers from special education mandates.

The “Next Generation NY Job Linkage Program,” which will make community college funding in part dependent upon the college's partnership with local employers and the regional economic development council, and the program's alignment with the current or emerging workforce needs of the region. This includes a $5 million Next Generation NY Job Linkage Program Incentive Fund, for discretionary awards based on the number of students employed following the program, and their wage gains, as well as the number of degree and certificate completions and the number such completions by students who are at-risk or underrepresented within the field of study.

Includes Next Generation NY Job Linkage Incentive Fund, and provides that for the 2013-14 community college fiscal year, programs that confer a credit-bearing certificate, an AAS or AOS shall demonstrate that they are preparing students for current and future job opportunities by partnering with employers (note: there is no wording directly linking aid to such partnerships, as there was in the original executive budget). State university and city university trustees will be required to submit a “job linkage report” to the director of budget, chairs of senate and assembly higher education committees and the chair of the senate finance committee, and the chair of the assembly ways and means committee.

$110 million to support the SUNY and CUNY 2020 initiatives.

Adopted.

The Executive Budget proposes a total reduction in Department of Environmental Conservation (DEC) spending of 5.5%, reflecting a slower pace of capital spending, non-recurring local assistance, and a statewide consolidation of IT personnel. 

Adopted.

An additional $40 million in capital for the DEC under the New York Works statewide capital infrastructure program. The DEC funding will be used for the Environmental Restoration grant program for municipal brownfields ($10 million), recreational facilities updates and health and safety repairs, wastewater treatment infrastructure, the plugging and remediation of abandoned oil and gas wells ($500,000), and e-business initiatives to allow businesses file regulatory applications and data with the department.

Adopted.

Increases the Environmental Protection Fund by $19 million, raising the appropriation to $153 million.

Adopted.

Proposes the “Cleaner Greener New York Act of 2013,” to increase enforcement and penalties for violation of the Bottle Bill, including criminal penalties, while also providing administrative and operational relief to small retailers, and deposit originators, producing additional revenues for deposit to the EPF. (Part F).

The proposed language was amended significantly, but did not contained amendments proposed by the Assembly that would have expanded the bottle bill to include sports drinks, fruit drinks with less than 70% fruit, and new aged beverages.

Makes permanent the waste tire disposal fee ($2.50 per tire), raising an additional $9 million in 2013-14 and $24 million annual thereafter. The original waste tire fee was established to address illegal or dangerous waste tire dumps; the majority of the collected fee has been used for general fund relief. (Part G).

Extends the waste tire disposal tax until 2016.

Extends the effective date for the Diesel Emissions Reduction Act from December 2013, until December 2015 (S.2068, Part T).

Extends the effective date until December 2014.

The Executive Budget health-related proposals focus on Healthcare Exchanges/ACA compliance and Medicaid issues. While it contains no new revenue measures, it extends the duration of some existing taxes. The budget also proposes new mandates on business, such as a requirement that a pharmaceutical manufacturer provides a minimum supplemental rebate for drugs that are eligible for state public health plan reimbursement.

Healthcare Exchanges and ACA related peripheral issues

Rejected.

• Eliminates the Healthy NY program for individuals, sole proprietors and small group insurance as of December 31, 2013, eliminates the Healthy NY stop loss fund effective 1/1/15 and eliminates the Family Health Plus program, effective January 1, 2015. The bill creates a transition process for enrollees from these programs to the Exchange. (S.2606-B / A.3006-B, Part C).

  Adopted.

• Increases small group employer group size up to 100, effective January 1, 2016 and adopts the ACA's narrower definition of “employee” effective on the same day. (S.2606-B / A.3006-B, Part A).

  Adopted.

• Modifies autism annual benefit cap of $45,000 to 680 hours to circumvent ACA's dollar cap prohibition. (S.2606-B / A.3006-B, Part D).

  Adopted.

• Authorizes DFS to suspend or terminate the State's risk adjustment mechanism for individual and small group markets, Regulation 146. (S.2606-B / A.3006-B, Part D).

  Adopted.

• Immediately amends “Ian's Law's” notification requirements, when plans seek to discontinue or change benefit structures. (S.2606-B / A.3006-B, Part D).

  Adopted.

• Community Rating of Professional Employer Organizations. (S.2606-B / A.3006-B, Part D).
• Effective January 1, 2014, establishes standardized rating regions and separate community rating pools for catastrophic coverage. Authorizes DFS to establish standard premium tiers and rating relativities between tiers.
• Establishes an open enrollment period in the individual market to mirror that contained within the ACA.

  Adopted.

Mandates

• Mandates Early Intervention services on private health insurance providers. To mitigate costs, it also:
  • Allows health insurance representatives to be part of a team that develops and reviews a child's Individualized Family Services Plan (IFSP).
  • Requires EI providers to join health insurance networks, negotiate rates insurers, and fully exhaust all appeals over claims. (S.2606-B /A.3006-B, Part E).

    Rejected.

• Requires pharmaceutical manufacturers to provide a minimum supplemental rebate for drugs that are eligible for state public health plan reimbursement. (S.2606-B / A.3006-B, Part A).

  Rejected.

Medicaid

• Continues the 2% across-the-board reduction of Medicaid payments for two years through March 31, 2015.
• Repeals “prescriber prevails” for atypical anti psychotics.

  Rejected.

• Broadens the population subject and transitioned to Medicaid Managed Care and creates the process by which the disabled population will come into managed care programs.
• Eliminates the cap on the maximum number of Managed Long Term Care plans that can be authorized.

Additional Provisions Adopted

• Both houses added a provision requiring prompt payment of healthcare provider bills but failed to include any provision mandating prompt billing by healthcare providers.

Extends the MTA surcharges on the corporation, corporate franchise, bank and insurance tax, currently scheduled to sunset December 31, 2013, by five years through December 31, 2018. (S.2609-B / A.3009-B, Part A).

Adopted.

Extends the “Temporary State Energy and Utility Service Conservation Assessment,” a temporary 2 percent assessment on electric, gas, steam and water utilities, for 5 years, until March 31, 2019. Originally enacted in 2009, the assessment currently provides over $500 million in revenues annually to the General Fund. (S.2608-B / A.3008-B, Part N).

This proposal was modified to impose a 2% assessment in FY 2015, 1.75% in FY 2016, 1.5% in FY 2017 and in effect 1.5% for one half of FY 2018, for an aggregate increase in Article 18-A revenue of $1.3 billion.

Five year extension of the film production tax credit, at $420 million per year, for five additional years (through 2019), and increase the share available for post-production credit costs from $7 million per year to $25 million per year. (S.2609-B / A.3009-B, Part B).

Adopted.

Tax reduction for businesses operating in “innovation hot spots” (see Economic Development section above for details). For Article 9-A taxpayers, limits tax liability to the fixed dollar minimum for a five year period; for Article 9-A taxpayers that are “partners” in a “hot spot” entity, provides a deduction for income attributed to such entities. For Article 22 taxpayers, provides a deduction for income attributed to such entities. Provides a credit or refund for state and local sales tax liability for retail sales of tangible personal property for such entities. Any taxpayer using these benefits would be ineligible for any other state tax exemption or deduction; the election to take “hot spot” tax benefits is irrevocable. (S.2609-B / A.3009-b, Part C).

Adopted.

Expand the NYS False Claims act to include acts, including tax-related acts, that “knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the state or a local  government, or conspires to do the same.”  Mandates awarding of costs to prevailing state and local entities and qui tam plaintiff, even if they do not prevail in court. (S.2606—B/A. 3006—B, Part A)

Amendments were modified to preclude alleged tax law violations from the expanded definition of a false claims; proposed expansion of broadly applicable provisions regarding recovery of court costs were limited, and allows for awarding to costs of prevailing defendant in frivolous qui tam case.

Limits state sales tax exemptions for IDA-financed projects to instances where: the project is certified by the state as eligible for participation in the Excelsior Jobs program; ESDC determines that such benefits are consistent with regional economic development strategies. Further provides that any state sales tax benefits would be awarded as a credit or refund, not an up-front exemption, and that if any share of the value of state sales tax exemption is included in a PILOT agreement, the IDA must remit those payments to the state. (S.2609-B / A.3009-B, Part J).

Largely rejected. Instead, the final agreement: reinstates the pre-2002 prohibition on IDA's support for most retail projects (with exceptions for where projects address underserved or highly distressed communities); imposes new recordkeeping and recapture requirements on IDA-provided state sales tax abatement.

Eliminates the exclusion of royalty income received by a taxpayer if a related entity that made the payment was required to add back the payment to its income; creates new exclusions from this provisions in instances where the related member paid significant tax on the income in another jurisdiction, if the payment was for a valid business purpose, or where the related member is incorporated in foreign countries. This change is expected to produce a net $28 million increase in state revenue in Fiscal 2015. (S.2609-B / A.3009-B, Part E).

Adopted.

Extends the enhanced tax credit available for rehabilitation of historic properties through tax years beginning before January 1, 2020, and to make necessary technical corrections to the method of determining eligible census tracts. (S.2609-B / A.3009-B, Part F).

Adopted.

Creates a new, non refundable tax credit under the corporation, corporate franchise and personal income tax for the purchase of electric vehicle recharging property, equal to the lesser of $5,000 or fifty percent of the cost of such property. (S.2609-B / A.3009-B, Part G).

Adopted.

Makes permanent several tax “modernization” provisions adopted in 2011 and currently set to expire at the end of 2013, including the requirement for e-filing of tax returns by professional preparers and individuals that use pre-packaged software to prepare their taxes; and authority for the Department of Taxation and Finance to require segregated bank accounts for sales that vendors that have failed to collect, account for, or pay to the state required sales tax collections. (S.2609-B / A.3009-B, Part H).

Extends these provisions for three years, through December 31, 2016.

Provides a new state and local sales/use tax exemption for receipts from sales of tangible personal property and food and drink where the sale is made at a Taste-NY facility. (S.2609-B / A.3009-B, Part I).

Rejected.

Creates a sales and use tax exemption for natural gas that is purchased and converted into compressed natural gas (CNG) for use or consumption in the engine of a motor vehicle. (S.2609-B, Part K).

Adopted.

Extends high income charitable contribution deduction limitation for three years (to 25 percent of federal allowable deductions for taxpayers with New York adjusted gross income over $10 million). (S.2609-B / A.3009-B, Part D).

Adopted.

Makes grounds for revoking a sales tax certificate of authority consistent with the grounds denying a COA application. This bill would also allow the Department to refuse to issue a COA for any unpaid tax finally determined to be due from a responsible person, not just for that person's unpaid sales and use taxes as under current law. (S.2609-B / A.3009-B, Part M).

Rejected.

With regard to cigarette taxes, the proposal would: a) allow the Tax Department to refuse to register retail dealers if they have any unpaid state tax liabilities or have been convicted of a tax crime within one year, and b) increase the penalty for possessing or controlling unstamped or unlawfully stamped cigarettes from a maximum of $150 to $600. (S.2609-B / A.3009-B, Parts N and O, respectively).

Part N was rejected; Part O was adopted.

Makes permanent the current state authorization for counties with sales taxes above 3 percent to continue their current rates, provided that these higher rates would be subject to biennial approval by the county's legislative body. (S.2609-B /A.3009-B, Part R).

Rejected.

Additional Provisions Added

• Adopted a corporate franchise tax reduction for “qualified NY manufacturer,” (i.e., a taxpayer or combined group with >50% of income from manufacturing activity that either has at least $1 million in mnfg-related capital in NY or all of its capital in NYS.) With regard to the entire net income basis tax rate, the new rates as follows: 2014 = 5.9%; 2015 = 5.7%; 2016-18 = 5.5%; 2019 and thereafter = 4.875%. Comparable reductions were adopted for Article 9A capital base, AMT and fixed dollar minimum 9A calculations for these qualifying manufactures. (Note: there is no corresponding reduction under the personal income tax for manufacturing-related income from sub-S corps, partnerships or LLCs.) (S.2609-D/A.3009-D, Part Z).
• Extends the “temporary” personal income tax rates, adopted in December 2011, for tax years 2015 through 2017. This maintains the 8.82% rates on income over $1 million for singles, $2 million for joint filers; and lower rates (below the permanent rate of 8.65%) for incomes below $300,000. Net revenue impact is $2 billion/year. The budget also included a $350 per yeasr PIT rebate to residents with one or more dependent children under the age of 17, and AGI between $40,000 and $300,00, for tax years 2014, 2015 and 2015. (S.2609-D/A.3009-D, Part FF).
• A refundable minimum wage credit, applicable to C and S-corporations, sole proprietors, LLCs and partnerships taxed under the state's corporation, corporate franchise, personal income, bank and insurance taxes; applicable to employees 16 to 19 (inclusive) that are a “student” at the time they are being paid the minimum wage; the refundable credit applies under and is set at: 2014 = $0.75/hour; 2015 = $1.31/hour; 2016-18 = $1.35/hour. If federal minimum wage increases to at least 85% of the applicable NYS minimum wage, these credits are reduced to the difference that the state min wage exceeds the federal. If the feds go higher, these credits go to 0. (S.2609-D/A.3009-D, Part EE).
• A non-refundable tax credit for hiring qualified veterans (discharged after 9/11/01, not fully employed for previous 6 months), equal to 10 percent of wages paid in first year of employment, up to a maximum of $5,000 (or 15% and $15,000 for qualified disabled veteran); credit is in tax years 2015 and 2016, available under Corporate Franchise, Personal Income, Bank and Insurance tax. (S.2609-D/A.3009-D, Part Z).
• Extends the at risk youth employment tax credit through 2018, and modifies eligibility to persons residing in cities with populations over 55,000 (rather than 62,000). (S.2609-D/A.3009-D, Part DD).

Extends the MTA Business Tax Surcharge for 5 years through tax year 2018 generating about $950 million annually. (S.2609-B / A.3009-B, Part A).

Adopted.

Provides $300 million in new money for repair of roads, bridges and infrastructure under the transportation component of the NY Works program with $100 million of it awarded competitively through the Regional Economic Development Councils. (S.2604-B / A.3004-B).

Provisions in final agreement; provides $225 million for repair of roads, bridges and infrastructure under the NY Works program; $100 million awarded competitively through the Regional Economic Development Councils.

Provides a total Department of Transportation capital program of $4.3 billion. (S.2604-B / A.3004-B).

Provisions in final agreement; provides a total Department of Transportation capital program of $4.266 billion.

Maintains the CHIPS and Marchiselli funding at $402.3 million. (S.2608-B / A.3008-B, Part A).

Provision in final agreement; increases the CHIPS and Marchiselli funding to $477.8 million.

Provides for a state takeover the $85 million cost of running State Police patrols on the Thruway from the Thruway Authority. This was part of the recent agreement that cancelled anticipated Thruway toll increases for commercial vehicles. (S.2608-B / A.3008-B, Part E).

Adopted.

Allows for the suspension of delinquent taxpayer's driver's license for those who owe in excess of $10,000 past due taxes. (S.2609-B / A.3009-B, Part P).

Adopted.

(S.2607-B / A.3007-B, Part O).

To generate additional UI tax payments necessary to repay $3.5 billion in federal borrowing by 2016, rather than 2018, the Executive budget would:

• Increase the taxable wage base to $10,300 in 2014 and in steps to $13,000 in 2026, and to 16 percent of the average annual wage in subsequent years.
  
  Adopted.
• Eliminate the six lowest tax brackets in the state's UI tax table (raising the tax rate for the post positive experienced-rated employers from 0.9 percent to 1.5 percent).
  
  Adopted.

Eliminate charges to an employer's UI account in instances where they terminated an employee for misconduct or an employee voluntarily resigns, and that person is laid off from a subsequent job.

Adopted.

Require a minimum of two documented prospective employer contacts per week, subject to random audit.

Removed and replaced by "the commissioner shall promulgate regulations defining systematic and sustained efforts to find work and setting standards for the proof of work search efforts."

Increase the maximum and minimum weekly benefits for claimants on a graduated scale. From October, 2014 through October 2018, the maximum benefit incrementally rises from $405 to $450. From October, 2019 through October, 2026, the maximum benefit incrementally increases from 36 percent of the average weekly wage to 50 percent.

Adopted.

Provide that no increase in maximum benefits will occur in year if: if there is a decrease in private sector jobs each month of the first two quarters of any year; if the fund does not have sufficient resources to pay for scheduled benefit increases; or if the fund balance is not at least 30 percent of the fund's average high cost multiple as defined in federal law.

Modified from fund amount on December 31 of the previous year to May 1 of current year.

Provide that benefits will be based on a claimant's two highest quarters of earnings in their base period, rather than the single highest quarter as in current law.

Agreed to but modified to include that a claimant whose high calendar quarter is $4000 or less but greater than $3575 shall have a weekly benefit amount of one twenty-sixth of such high calendar quarter.

Require $2,100 in income in a claimant's high earning quarter and $3,150 in income during their base period, in order to qualify for UI benefits (these would be increased from $1,600 and $2,400, respectively, in current law).

Replaced with a qualification based on a calculation of 221 times the minimum wage.  

Additionally, the penalty and interest charges as well as the ability to file with a county clerk judgments have been modified to include a number of requirement, including, the need to include, “Conspicuous language that reads as follows: "Once entered, a judgment is good and can be used against you for twenty years, and your money, including a portion of your paycheck and/or bank account, may be taken. Also, a judgment will hurt your credit score and can affect your ability to rent a home, find a job, or take out a loan."

Additional Provision Adopted

An individual who has filed a previous valid original claim must have worked in employment and been paid remuneration for such work since the beginning of such previous claim in an amount equal to at least ten times the claimant's weekly benefit rate in order to be able to file a subsequent valid original claim. The original proposal was “five times the claimant's weekly benefit.”