NYS Budget Highlights
Governor Cuomo and the Legislature reached an agreement on a new state budget, just prior to the April 1 budget deadline. The 2019-20 state budget totals $175.5 billion, maintains a 2% spending cap for the ninth year, and eliminates a $2.3 billion projected deficit. Overall, this budget is a mixed bag for the business community. There were some wins, and some losses. So, while there are both positives and negatives in this State budget, the legislative session is still far from over.
The enactment of a permanent property tax cap is a big win for business. The cap has saved taxpayers approximately $25 billion since it was first enacted in 2012. This is something that the Greater Binghamton Chamber of Commerce and other business community allies have championed for over a decade. Moving forward, we will have to remain vigilant to prevent efforts to pass exemptions that will weaken the integrity of the cap.
There were several policy items that were proposed to be included in the budget but were rejected during the budget process. All of these pieces of legislation as proposed in the Governor’s budget and the Senate and Assembly budgets, would have created difficulties for employers in our area.
• Prevailing Wage Expansion: would have increased many new development projects by approximately 25%.
• The Green New Deal Standards: 100% renewable energy by 2040 would have greatly increased energy costs and based on New York’s shift in energy sources, its feasibility needs to be considered.
• Marijuana Legalization: in the Governor’s budget language, the burden was on the employer to demonstrate if an employee was currently under the influence of marijuana.
• MWBE Mandate Expansion: would have made businesses ability to comply with the goals more difficult due to regional demographic realities.
• Bottle Bill Expansion: bottle deposit fees increase business costs and can create sanitation problems for beverage retailers with limited space.
While these issues did not make it into the budget, the business community must remain vigilant because they will likely be addressed in the remainder of the legislative session.
There are also several issues that were included in the budget that will have a negative effect on the business community.
• Plastic Bag Ban: this will be effective March 1, 2020. However, various types of plastic bags will be exempt; including bags used to contain uncooked meat or fish, bulk food items, carry prescription drugs and used to deliver newspapers.
• Increase Time Off to Vote: the budget increased from 2 hours to 3 hours the amount of time an employee may take off to vote. There is nothing in the law that requires the worker to justify the time off and there is not any mechanism for the employer to deny the three-hour pass.
• Public Financing of Political Campaigns: the enacted budget creates a commission to implement public campaign financing for legislative and statewide offices, authorizing up to $100 million annually.
• Repeal of the ESCO (Energy Service Company) Tax Exemption: the budget repeals the exemption for transportation, transmission and distribution charges associated with gas and electricity purchased from an ESCO. As a result, sales tax will apply to charges for transporting, transmitting, or distributing taxable gas or electricity, whether the commodity is purchased from an ESCO or a utility company. This is going to increase energy costs and cost businesses an additional $128 million annually.
• Opioid Excise Tax: there will be a new tax on the sale of opioids in New York State. It is a fee that will be passed along to patients prescribed the drugs.
While these 5 issues are some of the most important to the business community, there were other items included in the budget that will have a negative effect on the business community.
The New York State budget process should be a time when New York lawmakers realize the need to help decrease the tax burden and help struggling businesses and families make ends meet. Wallethub just announced that New York is the #1 highest taxed state and that is reflected in a state budget that is only surpassed by California. It is obvious that New York’s spending addiction and high taxes are putting our communities at a disadvantage in the global marketplace. The Greater Binghamton Chamber with other business community allies will continue to advocate for a business climate in which our community can thrive.