News

Issues and events that shape Long Island's economic and legislative landscape.

Friday, October 24, 2014

Albany Update

 
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Overview
The 2014 session of the New York State Legislature ended on Friday, June 20th. Throughout the session, the Long Island Association actively met with top state elected and appointed officials while lobbying for and against programs, policies and legislation to protect the interests of Long Island and our business community.
Second Half of Session
After the budget process was completed, the Legislature convened for approximately another three months. Many of the high-profile items were primarily social issues. Only medical marijuana was acted upon (and approved). Another featured topic was the proposed public financing of political campaigns, on which the LIA has not taken a formal position.
 
While the majority of the most pressing matters was concluded with the budget, there were other issues of interest:

  • The LIA successfully advocated for passage of legislation repealing the burdensome annual notice requirement put on employers by the Wage Theft Prevention Act.
  • One of the LIA's top 2014 priorities was the improvement of the New York State Brownfields program and the session ended with its fifteen-month extension, which will facilitate the plans of developers to revision these sites.
  • A proposal to improve water quality and protection efforts on Long Island passed in the Assembly but not in the Senate. The LIA has worked to reach a compromise that achieves environmental protection goals while not unnecessarily hindering the business community or economic development and, based on discussions at the recent LIA Board meeting, did not endorse the current legislation.
  • Legislation was passed that modified the tax assessment system in place in Nassau County. This bill would create a fund to pay class four tax certiorari refunds in Nassau County through a two-step process. It also provides that any refund of real property taxes owed to a class four property owner as a result of a settlement or final decision from a court of competent jurisdiction on a Real Property Tax Law Article 7 Title 1 proceeding or reduction granted by Nassau County's Assessment Review Commission will be paid from the disputed assessment fund. Any funds that remain thereafter shall be distributed pro rata to the county and the applicable school district, town and special districts.
The Budget
The first half of the legislative session was focused on crafting and passing a state budget, which was achieved on-time for the fourth consecutive year. In the budget, the LIA fought for and secured significant tax reforms and fiscal equity for the Long Island region as compared to other parts of the state. The budget held spending growth below 2%. In addition:

  • Manufacturers who own or lease property get a 20% real property tax credit and the tax rate on income for all manufacturers was lowered from 5.9% to 0. The original proposal applied only to upstate manufacturers, however, the LIA led the effort to ensure our region was also included.
  • The 18-a assessment on energy bills will be phased out on an accelerated timeline over the next three years and will apply to both residential and commercial customers. Once again, the LIA played a crucial role for employers as some earlier proposals provided relief to residences instead of or prior to relief to businesses.
  • Over the next five years, the estate tax exemption will increase from $1 million to match the federal exemption of $5.2 million. Starting in 2019, the threshold would be indexed to the federal threshold and indexed to inflation. This was a key recommendation from our Financial Services & Tax Committee, which we had proposed to the two tax reform commissions formed by the Governor and the State Senate, respectively.
  •  The corporate franchise and bank taxes were combined to provide tax simplification and relief, and improve voluntary compliance. Further, the tax rate on net income was reduced from 7.1% to 6.5%, the lowest rate since 1968.
  • The budget included a new property tax credit. In the first year of the plan (the 2014 tax year), New Yorkers will receive property tax relief if their local governments stay within the property tax cap. The property tax cuts will be extended for a second year in jurisdictions which comply with the tax cap and have put forward a plan to save one percent of their tax levy per year, over three years.
  • The Regional Economic Development Councils were again funded for a fourth round (Long Island's REDC, led by our President & CEO Kevin Law and Hofstra President Stuart Rabinowitz, has won more than one quarter billion dollars to date to spur growth in the region).
  • Education for Long Island Schools was increased in the budget to include a $1.1 billion or a 5.63% increase in aid for the 2014-2015 school year.
 
Possible Special Session
Although the session has ended, it is possible that the Legislature will call a special session and return to Albany before the end of the year. The LIA will remain at the forefront of the debate regarding several issues that could be raised, including:

  • The proposal to again raise the minimum wage, index it to inflation and allow for localities to set their own wage floors. The LIA opposes this measure.
At the LIA, we will continue to observe and participate on behalf of Long Island's business community whenever and wherever necessary. However, there will be elections this November for Governor, Attorney General, Comptroller and every state legislative seat and thus it may be unlikely that there will be any special sessions convened until after Election Day on November 4th.