FY 2016 Executive Budget Summary

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Construction / Transportation | Contract Procurement | Economic Development | Education / Workforce Development | Election and Campaign Finance Reform | Energy | Environment | Financial Services | Financial Settlement Funding | Health Care / Health Insurance | Labor / Human Resources | Taxation | Technology / Telecommunications | Tourism | Workers' Compensation

Contract Procurement

• Permits the state, in the case of a construction emergency, to let emergency contracts of up to $1 million for public work or the purchase of supplies, materials or equipment without complying with formal competitive bidding requirements ( current threshold is $300,000) (S.2005/A.3005, Part M).
• Extends through 2019 statutes that allow the MTA and the New York City Transit Authority to use procurement methods to procure systems and construction contracts and maintains the $15,000 threshold above which MTA and NYCT must solicit purchases via sealed bids (S.2008/A.3008, Part L).
• Extends for one year the date by which a MWBE disparity study must be delivered to the governor and legislature (S.2008/A.3008, Part Q).

Education / Workforce Development

• Allows for local school districts, private schools and BOCES to submit waivers from special education requirements for a specific school year and provides for 60 days for the parents of students being affected to submit comments (S.2006/A.3006, Part A).
• Directs the commissioner of education to establish regional tuition rates for special education itinerant services based on average actual costs, and provides for the phase in over a four-year period (S.2006/A.3005, Part A).
• Provides that any new curriculum or program of study offered by a four-year college or community college that does not require board of regents approval of a master plan amendment and that is approved by the board of trustees shall be deemed registered with the department. The board of trustees must notify the department within 30 days of such approval (S.2006/A.3006, Part B).
• Provides $3 million to support a third round of P-TECH school designations (S.2003/A.3003)
• Enacts the New York State Get On Your Feet Loan Forgiveness Program; eligible applicants must: graduated from a high school located in New York State or attended or received a high school equivalency diploma in New York State; earn an undergraduate degree from a college or university with its headquarters located in New York State in or after 2015; participate in a federal income-driven repayment plan; have an income of less than $50,000; reside in New York; and, if employed, work in New York State. Awards will be equal to 100 percent of the participant’s monthly federal income-driven repayment plan payments for the first two years of repayment under the federal program (S.2006/A.3006, Part C).
• Requires the SUNY and CUNY board of trustees to pass resolutions (by the end of 2015) providing that students be required to participate in an approved experiential or applied learning activity as a degree requirement (S.2006/A.3006, Part Q).
• Institutes the Dream Act, extending eligibility for financial awards to applicants without lawful immigration status if the student attended a New York State high school for two or more years (and graduated) or received a high school equivalency diploma. (S.2006/A.3006, Part D).
• Renames the Youth Works Tax Credit to the Urban Youth Jobs Program tax credit, allocates an additional $10 million in tax credits in 2015-2017 and targets localities with high unemployment and high youth poverty (S.2009/A.3009, Part M)
• Creates the Employee Training Incentive Program (ETIP) tax credit. See Taxation section below for details. (S.2009/A.3009, Part O).
• Amends the tenure process for teachers and principals hired after July 1, 2015, stipulating that new teachers will remain on probation until they receive five consecutive ratings of “effective” or “highly effective” on the APPR (S.2010/A.3010, Part A).
• Authorizes the Commissioner of Education to a categorize a school district as failing (one that has scored in the lowest 2.5 percent of school districts statewide, when compared to other districts based on student achievement and performance on state assessments, graduation rates and drop-out rates) and appoint a receiver to create and enact a plan to improve student achievement (S.2010/A.3010, Part A).
• Increases the cap on charter schools by 100 to 560 (S.2010/A.3010, Part A).
• Requires institutions with graduate-level teacher education programs to adopt rigorous selection criteria including, including achievement of 3.0 or higher GPA in a candidate’s undergraduate program and a minimum GRE score (or comparable admission examination) as determined by the institution, and provides for the suspension of the institution’s operations if fewer than 50 percent of its students pass examinations required for certification. Also requires teachers to register withstate ed. every five years and imposes a $10/month late fee, and requires teachers to complete at least 100 hours of continuing teacher education during each registration period (S.2010/A.3010, Part A)
• Creates the New York State Masters-in-Education Teacher Incentive for students in approved masters’ education programs who meet the following criteria: earned an undergraduate degree from a New York college and resided in New York while earning the degree; achieved academic excellence as defined by the corporation in regulation; and agree to teach on a full-time basis in New York for five years. Program (S.2010/A.3010, Part A)
• Amends the components of the teacher evaluation system to remove the local test portion and changes the weightings of the score components to 50 percent state tests and other comparable measures and 50 percent classroom observations.
• While not included in the Executive Budget language, the Governor will create regional planning councils to work with community colleges to assure their programs address workforce needs.

Energy

Staff Contact: Darren Suarez

• Directs a payment of up to $913,000 from the New York State Energy Research and Development Authority (NYSERDA) to the General Fund. This transfer has been authorized for a number of years to cover the costs of West Valley. (S.2008/A.3008 Part O).
• Authorizes $19.7 million in assessments on utilities to fund NYSERDA’s research, development and demonstration, and policy and planning programs, and DEC's climate change program. (S.2008/A.3008, Part P)
• Transfers $36 million of RGGI proceeds to the State, including $13 million to Environmental Protection Fund (EPF) to cover revenue shortfalls and to increase the EPF. (S.2005/A.3005, Part P.)
• Authorizes the Long Island Power Authority (LIPA) to issue special securitized restructuring bonds that would reduce the interest rates paid on LIPA’s debt. (S.2008/A.3008, Part W. )
• Clarifies that solar power purchase agreements are exempt from State and local sales tax. (S.2009/A.3009, Part Z.)

• Note that the State of the State message included numerous other proposals that are off budget, including a $20M Southern Tier clean energy prize. Funding will come from the New York Power Authority.

Financial Services

• Allows public accounting firms to incorporate in New York State with minority ownership by individuals who are not Certified Public Accountants. (S.2006/A.3006, Part G)
• Restructures New York City general corporate tax structure, which would apply to all corporations including financial corporations effective 1/1/15. See details under Taxation. (S.2009/A.3009, Part QQ.)

Health Care / Health Insurance

Staff Contact: Lev Ginsburg

• Adds a new Financial Services Law (FSL) § 208 creating a new assessment(tax) on all health insurers in the individual, small group and large group insurance markets on qualified health plans, to pay for the $69 million costs of the NY State of Health, the State health insurance exchange, operation, for each fiscal year commencing on or after 4/1/15. It also creates record retention requirements, audits and a noncompliance penalty regime. S.2007/A.3007, Part G, Section 1.
• Amends Social Services Law (SSL) §367-a(7) to allow the State to negotiate supplemental rebates directly with pharmaceutical manufacturers both inside and outside of Managed Care on covered out-patient drugs with a pre-existing rebate agreement with the federal government. S.2007/A.3007, Part B, Section 1.
• Adds Public Health Law (PHL) §274(15) requiring prior authorization for fee-for-service drugs meeting the Clinical Drug Review Program criteria prior to obtaining the Drug Utilization Review Board’s evaluation and recommendation. S.2007/A.3007, Part B, Section 4.
• Adds PHL §272(a-1) authorizing the Commissioner to require supplemental rebates from manufacturers of brand name drugs utilized in the Medicaid fee-for-service, subjecting these pharmaceuticals to prior authorization if supplemental rebate is not provided. S.2007/A.3007, Part B, Section 5.
• Amends PHL §273 eliminating prescriber prevails provisions for fee-for-service Medicaid drugs not on the preferred drug list. S.2007/A.3007, Part B, Section 6.
• Grants authority to the commissioner to reduce or redistribute Medicaid payments in a manner determined in his or her discretion. S.2007/A.3007, Part E, Section 2.
• Authorizes the commissioner to establish a reinsurance pool, and to make changes to value based payments or methodologies of reimbursement that are value based as necessary to conform to the terms and conditions of the DSRIP waiver. S.2007/A.3007, Part F, Section 1.
• Adds a new section PHL §2801-a(17) authorizes limited services clinics to provide health care services within retail space or a space used by an employer for providing health care services to its employees. The Commissioner of Health shall promulgate regulations for the operation of limited services clinics. S.2007/A.3007, Part H, Section 1.
• Amends SSL §367-a increasing the current average wholesale price (AWP) for brand name drugs from AWP minus 17% to AWP minus 24%; and increases DOH brand name drug dispensing fees from $3.50 to $8.00 per prescription. S.2007/A.3007, Part B, Sections 2 and 3.
• Adds SSL §364-j(24-a) requiring federally participating section 340B drug providers bill managed care plans at the actual acquisition cost for 340B drugs. S.2007/A.3007, Part B, Section 7.
• Adds SSL §368-g codifying the Medicaid State Funds Medical Assistance Cap, limiting the year-to-year growth of DOH’s State Funds Medicaid Assistance spending to no more than the ten year rolling average of the medical component of the Consumer Price Index. S.2007/A.3007, Part B, Section 8.
• Repeals PHL§280 to eliminate the New York Prescription Saver Program. S.2007/A.3007, Part B, Section 9.
• Amends Chapter 59 of the laws of 2011 to provide increased supplemental Medicaid payments to managed care organizations for professional services provided through State University of New York clinical practice management plans. S.2007/A.3007, Part B, Sections 29 and 30.
• Amend SSL §367-a to prevent Medicaid from paying any portion of costs associated with Medicare Part B and Medicare Part C claims when the total payment to the provider would be greater than the Medicaid rate. S.2007/A.3007, Part B, Section 31 and 32.
• Permanently extend authorization for bad debt and charity care allowances for certified home health agencies, extend authorization for nursing home reimbursable cash assessment program and extend authorization for "Project Eldercare.” S.2007/A.3007, Part E, Sections 1-5.
• Adds a new section 4415 to the public health law authorizing the commissioner to promulgate regulations, directing levels of value based payments. The commissioner is authorized to place conditions on any level of value based payment; requiring or adjusting reserves, as applicable, for managed care organizations licensed under this article and entities participating in value based payment arrangements S.2007/A.3007, Part F, Section 1.
• Amends Education Law §6908 to provide an exemption from the Nurse Practice Act for Advanced Home Health Aides (AHHAs), and would specifically identify advanced tasks that could be performed by such individuals in home care and hospice settings with appropriate training and supervision. S.2007/A.3007, Part J.
• Amends Public Health Law §2802 to modify the Certificate of Need (CON) approval process for hospitals and D&TCs that provide primary care services by allowing them to construct a facility without a public needs assessment; or in the case of a hospital, the application does not involve a change related to: (i) capacity; (ii) the types of services provided; (iii) major medical equipment; (iv) facility replacement; (v) the geographic location of services. The section also removes the requirement that the Commissioner of Health needs to consider a CON applicant's financial resources and future revenue sources when reviewing both types of applications. S.2007/A.3007, Part K.
• Adds Public Health Law §2801 to establish a private equity pilot program, allowing up to five non-publicly traded businesses, affiliated with at least one medical institution or a teaching hospital, to make private capital investments to assist in restructuring healthcare delivery systems; and allow debt financing provided through the Dormitory Authority of the State of New York (DASNY). S.2007/A.3007, Part Q.

Taxation

Staff Contact: Ken Pokalsky

• Brings New York City business taxes into conformance with state-level corporate franchise tax reforms adopted in 2014, effective 1/1/15. In addition, adopts small business tax rate reductions and adopts a $10 million cap on capital based tax liability. S.2009/A.3009, Part QQ
• Expands the Section 184 utility gross receipts tax and MTA surcharge to wireless communications providers S.2009/A.3009, Part P.
• Extends the brownfield cleanup program’s remediation and redevelopment investment tax credits through 12/31/25; repeals the programs’ environmental insurance and real property tax credits, applicable to projects entering the program on or after 4/1/15; limits the category of sites eligible for the tangible property credit (e.g., projected investigation and cleanup cost must the appraised value of property “absent contamination”); reduces the eligibility period for the tangible property credit from 10 to 5 years. S.2009/A.3009, Part R.
• Reduces the corporate franchise tax rate on “small business taxpayers” (e.g., less than 100 employees, less than $1 million in capital) with a business income base under $290,000 to 3.25% in 2016, 2.9% in 2017, and 2.5% in 2018 and thereafter; business with an income base under $390,000 receive these rates for that portion of their income under $290,000. S.2009/A.3009, Part N.
• Makes “technical” amendments to 2014 state business tax reforms related to: definition of investment capital; residential loan portfolios; criteria for economic nexus threshold; basis for manufacturers’ rate differential; PNOLCs and NOLs; apportionment rules for mark to market gains; financial service ITC; START-UP NY credits; and mandatory S corporation election. S.2009/A.3009, Part T.
• Adopts a job training program tax credit equal to 50% of training costs, up to $10,000 in costs per eligible employee; employer must have 10 net new jobs or a $1 million capital investment; statewide cap of $5 million of such credits to be authorized annually; credits count against the annual Excelsior jobs credit cap. S.2009/A.3009, Part O.
• Requires IDA to obtain ESDC approval before providing new or increased state tax abatements; establishes timetable and criteria for approval; authorizes the Department of Taxation and Finance to audit IDA projects; allows state credit claw-backs if project goals are not achieved; disallows IDS benefits to project operators with past due tax liabilities. S.2009/A.3009, Part W.
• Modifies the youth works tax credit program; makes $10 million in credits available annually for 2015, 2016 and 2017; limits program to the state’s six highest unemployment areas. S.2009/A.3009, Part M.
• Adopts provisions to limit sales tax avoidance; applies sales tax when property brought into NYS by an entity that had not been in business outside NYS for six months; treats a single member LLC and its member as one person for sales tax transactions; requires up-front payment of all sales tax due pursuant to a lease; prevents sales-tax-free transfers of any tangible property between affiliated entities in exchange for stock or partnership interest. S.2009/A.3009, Part Y.
• Defines “marketplace providers” (i.e., collects purchase prices and performs other sales function) and requires them to collect sales tax on taxable sales they facilitate. S.2009/A.3009, Part X.
• Requires Article 9 taxpayers who pass tax costs onto customers to refund tax payments to customers before seeking a tax refund or credit of such taxes paid to the state. S.2009/A.3009, Part Q.
• Expands the Excelsior jobs credit program to include “entertainment companies,” defined as entities engaged in the production or post-production of movies, television shows and commercials, animated films and similar products. S.2009/A.3009, Part K.
• While language is not included in the Executive Budget, the Governor will direct $70 million in Excelsior Job Creation credits to be distributed through the Regional Economic Development Council process.
• Adopts a number of tax enforcement provisions: makes provisions for warrantless wage garnishments permanent (Part DD); reduces from $10,000 to $5,000 the threshold of past due tax liability that provides the basis for suspension of drivers’ license (Part EE); requires state tax compliance as a condition of excess malpractice coverage (Part FF), receiving state or local grants (Part GG), obtaining a professional or business license (Part JJ), or enter the state workforce (Part KK). All provisions are in S.2009/A.3009.
• Authorizes the Tax Commissioner to enter into reciprocal agreements with other states for the collection of fixed and final state tax liabilities. S.2009/A.3009, Part HH.
• Make technical amendments to the 2014 Estate Tax reforms. S.2009/A.3009, Part BB.
• Makes permanent the limitations on charitable deductions under the PIT for taxpayers with AGI above $1 million. S.2009/A.3009, Part H.
• Makes “technical” amendments to the personal income tax; clarifies payment of the MTA mobility tax by non-resident self-employed taxpayers; clarifies the basis for the manufacturer’s real property tax credit under Article 22; modifies the Start Up NY telecomm excise tax credit. S.2009/A.3009, Part I.
• Adopts a new non-refundable education tax credit under both the corporate franchise tax and personal income tax; equal to 75% of qualifying contribution, up to $1 million per taxpayers; contributions are to public or non-public schools, school improvement associations, local education funds, and scholarship-granting entities; up to $100 million in credits are allowable each year. S.2010/A.3010, Part E.
• Extends the wine tasting sales and use tax exemption to other alcoholic beverages. S.2009/A.3009, Part U.
• Adopts a new residential real property tax circuit breaker for households with incomes below $250,000, and a renters’ credit for households with income below $150,000, with a cost of $1.7 billion annually once fully implemented (S.2009/A.3009, Part G); makes numerous changes to the STAR program (S.2009/A.3009, Parts A thru F)

Tourism

Staff Contact: Ken Pokalsky

• Provides $45 million from various sources for world-wide tourism promotion campaign.
• Provides $5 million for competitive local tourism marketing grants through the MarketNY program. (S.2003/A.3003).
• Provides $1.1 million to support the “Taste of NY” program. (S.2003/A.3003)