On January 22, 2013, Governor Andrew Cuomo revealed his proposed 2013-2014 state budget. The proposed budget aims toward investing in education, continue the growth of the economy, new job creation, and rebuilding after Super Storm Sandy. The new budget proposes no new taxes or fees.
The new state budget for fiscal year 2014 is expected to eliminate a $1.3 billion budget gap. The highlights of the proposed budget include:
- Capital grants to encourage job creation and business expansion.
- Restructure the states Worker's Compensation System.
- Provide approximately $4 billion in aid towards Superstorm Sandy recovery and rebuilding.
- Increase education aid by $889 million or 4.4 percent.
- Increase the minimum wage rate from $7.25 to $8.75 an hour, expected to take effect July 1, 2013.
- Extend the Empire State Film Production Tax Credit for an additional five years.
- Suspend the driver's license of any individual who owes more than $10,000 in overdue taxes.
The budget plans to concentrate on growing the economy and creating jobs and training students for the workforce. Major economic development initiatives include:
- Innovation Hotspots and Tech Transfer: Will create or designate ten high-tech innovation incubators at locations affiliated with higher education institutions to encourage private-sector growth.
- Next Generation Job Linkage Program: Performance grants to incentivize community colleges to place students in high demand jobs.
- Regional Councils: Increases budgets to the Regional Economic Development Council for project investment.
- NY Works Economic Development Fund Program: Capital grants that support job creation and retention and fund investments that facilitate business expansion and the attraction of new businesses.
- Market NY: Provides funding needed to launch this program which includes the Taste-NY initiative and a new grant program for regional tourism marketing.
- Commitment to Western New York: Commits $100 million in funding and Excelsior tax credits as part of a ten-year commitment to revitalize Buffalo's regional economy, and $60 million renovation to a stadium to keep the Bills in Buffalo.
- House NY: To finance the creation and preservation of more than 14,300 affordable housing units.
- Minimum Wage Increase: The Executive Budget increases the minimum wage from $7.25 to $8.75 an hour. The change would take effect July 1, 2013 and effect over 705,000.
- Major Reform of Workers' Compensation System: The Executive Budget includes a sweeping reform of the state's complex and inefficient Worker's Comp system. The reform plan will allow the State Insurance Fund to release reserves no longer needed which will be used to fund job-creating projects.
- Unemployment Insurance Reform: The budget proposes the modernization of the Unemployment Insurance system.
- Enhance New York Film Production Tax Credit: The budget extends the Empire State film production tax credit for an additional five years. Additional reporting will be required to document the effectiveness of the credit in creating jobs.
- Extend Historic Commercial Properties Rehabilitation Credit: The Budget extends the existing tax credit for five years (2015-2019) and makes the credit refundable beginning in tax year 2015.
Support for Sandy Relief:
- The Executive Budget provides support for Superstorm Sandy recovery and rebuilding projects, programs, and other initiatives.
- Communities hit hard by the storm will be eligible for grants.
- Provides for a voluntary home buy out program.
- Investments to be made in the areas of transportation, fuel and water supply and electric distribution.
- Restore damaged beaches.
- Improvements at damaged hospitals.
- Coordinate universal protocols for Emergency Response.
- Specialized training for National Guard Members.
- Stockpiling of essential equipment.
This budget is also taking the necessary steps to provide greater government transparency and encourage citizen engagement. New Yorkers are now given the opportunity to access resources regarding the state budget through the website www.OpenBudget.NY.gov. The budget must be adopted by state law makers by April 1, 2013, the start of the state's fiscal year.
If you have any questions regarding this budget or how it may affect you or your business, please contact your Marcum Tax Advisor. Additional information on the budget can be found at this link: http://publications.budget.ny.gov/eBudget1314/ExecutiveBudget.html.