News

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

Thursday, July 31, 2014

Albany Update: 2014-2015 Budget Agreement

lowreslialogo.jpg

 Albany Update: 2014-2015 Budget Agreement

 A budget agreement was reached over the weekend and signed by Governor Andrew Cuomo into law today. The LIA traveled to Albany to meet with key officials, testified in front of various Gubernatorial and Senate committees and wrote several letters as part of our advocacy efforts to ensure that Long Island businesses were treated equitably to improve the business climate in the state.

The budget holds spending growth below two percent for the fourth consecutive year, continuing a record of fiscal discipline that has reversed decades where state spending increased at a higher rate than inflation and personal income growth. 
  1.  Manufacturers will get a 20% real property tax credit who own or lease property and lowers the tax rate on income for all manufacturers from the current 5.9% to 0 - and apply statewide (the original proposal applied only to upstate manufacturers).
  2.  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 (some proposals provided relief to residences instead of or prior to relief to businesses).
  3.  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.
  4.  The Executive Budget combines the corporate franchise and 
bank taxes to provide tax simplification and relief, and improve voluntary compliance. Further, the tax rate on net income is reduced from 7.1 percent to 6.5 percent, the lowest rate since 1968.
  5. The budget includes a new property tax credit. In the first year of the plan, 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. 
  6.  The Regional Economic Development Councils will again be funded for a fourth round (Long Island''s REDC, led by co-chairs Kevin Law and Hofstra President Stuart Rabinowitz, has won more than one quarter billion dollars to date to spur growth in the region).
  7. Education for Long Island Schools was increased in the budget to include a $1.1 billion or 5.63 percent increase in aid for the 2014-2015 school year.
 
Unfortunately, the mandated out-of-network health insurance benefits were included in the budget which may ultimately increase costs and drive up premiums.

Although the 2014-15 budget is resolved, three months remain in the legislative session. The LIA will continue advocating for our priorities and to ensure the second half of the session positively impacts Long Island and our business community.