The unpredictablity of New York tax rates and the demand for $300 million non-refundable payment in order to bid have led Delaware North, an international leader in hospitality and food service, to walk away from bidding on the Aqueduct racino.

James Fink reports in Buffalo Business First, “A myriad of unanswered questions has prompted Delaware North Cos. Inc. to drop its quest to secure the casino development rights for the fabled Aqueduct Racetrack in New York City.

Among the unresolved issues include New York state’s demand that the winning Aqueduct bidder supply a non-refundable $300 million up-front payment to the state. Because of its non-refundable clause, the money would not be returned if negotiations fail to produce a final contract between the winning bidder and the state Lottery Division.

Delaware North officials were also concerned about the unpredictability of the state taxation rates that could see future payments balloon along with the length of a mandated SEQR — environment impact review statement — study and New York’s ability to fund the promised $250 million capital construction grant that would help finance the construction of the massive casino on the Aqueduct property.

“While we still believe in the merits of the development of a gaming facility at Aqueduct Racetrack and the substantial benefits to New York State education, the community and to stakeholders in the racing industry, we have concluded that the VLT vendor procurement structure as proposed makes it impossible for us to submit a conforming proposal,” William Bissett, Delaware North Cos. Gaming & Entertainment president, said Tuesday in a prepared company statement.”

Read the story.

The Business Council strongly opposes provisions of this wide-ranging legislation that would require corporations formed under the laws of New York State – including the business corporation law, the limited liability corporations law, the banking law and others - to obtain approval of a majority of shareholders before making any political donations in New York.  This same proposal was previously proposed as a standalone requirement in S.7083-A. 

These restrictions are described as a response to the United State’s Supreme Court decision in Citizen’s United v. Federal Election Commission. 

Using this Supreme Court decision as a rationale for this legislation is misplaced and indicates a misunderstanding of Citizen’s United, which overturned restrictions on independent campaign expenditures by corporations, and did not create a change in New York Law that necessitates placing a new restriction on the ability of business entities to make any political expenditure. 

Corporations are affected by political regulation and should continue to have the right to participate in the political process. 

Read The Business Council memo in opposition.

The New York State Senate is expected to consideration to senate bill S.5768. The legislation would authorize private litigation to enforce New York’s securities law, the Martin Act, and would result in dramatic expansion of liability.  ATRA strongly encourages members with a presence in New York to engage their local lobbyist and/or counsel and have them reach out to Senate Majority Conference Leader Sampson to urge opposition to the legislation.  For additional information, please contact Walter Pacholczak of the Business Council of New York State at walter.pacholczak@bcnys.org.

By way of background, under current law, institutional investors have the opportunity to seek redress through litigation under both federal securities law as well as New York common law.  In contrast to the Martin Act, New York common law claims for fraud and negligent misrepresentation must meet substantial burdens of proof.  We believe that the balance struck by the common law with regard to protection of investors on the one hand versus the need to guard against excessive and unnecessary litigation is an appropriate one.  The Martin Act, with its broad definition of fraud and lower burden of proof, is better suited as a basis for regulator enforcement than it is for private litigation.

Litigation Funding: A. 7891

A. 7891 was discharged from the Assembly Codes Committee and referred to the Assembly Rules Committee.  ATRA strongly opposes the legislation as it would legitimize third party financing of litigation, and we encourage members with a presence in New York to engage their local lobbyist and/or counsel to urge Assembly members to oppose this legislation.  Please coordinate with Walter Pacholczak of the Business Council of New York State at walter.pacholczak@bcnys.org.

A Daily News editorial points out how by trying to show the Governor “Who’s Boss” in the budget process, they hurt the people they represent.

“The damage wreaked by the Legislature’s rogue budget maneuvers is emerging from the fog in Albany, and it’s not pretty.

For starters, thanks to Assembly Speaker Sheldon Silver, Senate Democratic Conference chief John Sampson and fellow Democrats, the city schools stand to wind up with less money - a lot less - than they could have received had lawmakers cooperated with Gov. Paterson.

The hit will be a whopping $173 million, with programs for the homeless facing a $146-million whack as well.

Silver and Sampson rammed an irresponsible spending plan through their houses in an attempt to show Paterson who was boss. And they wound up costing their constituents money when the governor began to veto their excesses, as he had promised to.”

To read more click here.

E.J. McMahon, the director of the Manhattan Institute’s Empire Center for New York State Policy writes in the New York Post. - “What just happened in Albany, anyway?

Did Gov. Paterson skillfully maneuver New York’s Legislature into adopting a tighter and more timely state budget than it was capable of producing on its own? Or did he help the Legislature dig the state government into an even deeper fiscal hole, hammering New York’s economy with even more new taxes as part of the bargain?

The correct answer: Yes.

Details were still scarce late yesterday on the cash impact of the appropriations adopted by the Legislature over the last few weeks. However, adjusting for what appear to be even more funky book-keeping wrinkles than usual, it seems safe to say that this year’s budget will add up to more than last year’s — which, in turn, was about 10 percent larger than the budget Paterson inherited from former Gov. Eliot Spitzer a little over two years ago, at the end of fiscal 2007-08.

To read more click here.

Divided Legislature unlikely to override Paterson’s spending vetoes

Nick Reisman reports in the Poughkeepsie Journal - “An override of Gov. David Paterson’s vetoes of 6,900 spending items appeared unlikely Tuesday as Republican lawmakers in the Senate criticized a budget that they said drives up spending and does nothing to control property taxes.

Meanwhile, Democrats in the Senate and Assembly said they planned to pass revenue bills Thursday that would complete the state budget, now three months overdue.

The bills were changed to strengthen support among some rank-and-file lawmakers who had raised concerns Monday about aspects of the bills.

The changes included striking a provision that would have allowed same-sex couples married outside the state to file income-tax returns as married couples.

The changes also eliminated a proposal to exclude homes worth more than $2 million from the STAR rebate program. Another change gave New York City the option of adopting a state plan to halve deductions for charitable contributions made by those with incomes above $10 million.

Despite the changes, Republicans were unlikely to vote for the revised bills.”

To read more click here.

The Business Council of New York State, Inc. has joined with sixteen other business organizations from across the state to oppose legislation that would significantly increase the type and amount of work that is traditionally subject to prevailing wage laws by expanding the list of job categories covered by the prevailing wage laws, and by expanding the coverage of the prevailing wage law for the first time to private businesses.

“Expanding the prevailing wage law to private businesses for the first time sets a dangerous precedent that will prevent job creation and raise prices in New York,” said Kenneth Adams, president and CEO of The Business Council of New York State, Inc.

This bill represents a huge job-killing mandate that New York cannot afford. While it appears to impact only utilities, it goes far beyond this and sets a dangerous precedent for all businesses throughout the State.

The State and its local governments are facing some of their greatest fiscal challenges ever. Therefore, it is imperative that the State Legislature do everything in its power to help local governments better manage their fiscal affairs. Instead, this legislation would impose costly new mandates on the State of New York, local governments and all New Yorkers.

To read a letter in opposition click coalition-letter-service-worker-pw-opp-june-30

In a Jamestown Post-Journal editorial, the paper take a look at how the three-men-in-a-room method of budget making continues to result in tax increases and a poor economy.

“Along with the dysfunction of state government because of the concentration of power in the hands of just three men, New Yorkers seem doomed to continue suffering the highest tax burden in the nation. We just do not see an end to it.

Remember last year when the three-men-in-a-room budget process resulted in a huge $8 billion increase in taxes levied on state residents and businesses?

What did we get for that?

A mega-billion dollar deficit - which we are going to pay for this year with yet more taxes piled on top of last year’s increases. And, by the way, lawmakers knew last year the state was going to spend a whale of a lot of money it does not have.

We are seeing exactly the same pattern this year with budget proposals and counter proposals made over the weekend.

“Albany’s politicians appear to be reverting to their old tricks as they talk about raising billions in taxes to close the state budget,” says Kenneth Adams, president and CEO of The Business Council of New York State, Inc. “It is very disappointing that rather than lowering the cost of government the negotiations have turned to even more taxes. The Senate majority’s budget resolution rejected new taxes, but they seem to be walking away from that commitment.”

He repeats what we already know but what is ignored in Albany: New Yorkers carry the highest state and local tax burden in the nation, according to The Tax Foundation. Whatever new taxes are levied this year only add to that.

Adams notes new taxes on manufacturers, tobacco products and insurance policies totaling more than $1 billion have already been pinned down in the new budget. There is more to come, he said. This includes a proposal to increase all New Yorkers’ energy bills by increasing taxes on coal-fired and nuclear power plants, Adams said.

”Another proposal to defer tax credits already earned by businesses would not only be a tax increase on employers who are struggling in this recession. It would be another broken promise to businesses that have invested in New York believing in the state’s economic development incentives. It will make it harder for the state to attract investment and jobs in the future because employers will not believe the state’s offer,” a Business Council press release states.”

To read the rest of the editorial click here.

The Governor presented this afternoon as part of a press release his “comprehensive legislation to reform the unemployment insurance system“, which more properly should be characterized as a comprehensive UI tax bill. The draft legislation contains no system reforms, but, as the memo makes clear, is aimed at providing the funding to support increased UI benefits over the next eight years.

Specifically the bill:

• eliminates the six lowest tax rates for employers with a positive employer account percentage. (Note: more than one-third of New York’s employers fall in these lowest tax brackets, so the impact for solvency and benefit increases will fall heaviest on the most stable employers.)
• increases over each of the next eight years the taxable wage base from the current level of $8,500 to $14,000; commencing in 2019 the taxable wage base will be set at 18% of the average annual wage.
• increases the maximum weekly UI benefit starting in 2011 from $405 to $475; and then sets the rate starting in 2012 to a percent of the state’s average weekly wage increasing in each year by 2 percentage points annual until 2018, when the benefit rate will be set at 50% of the average weekly wage.
• includes provisions to increase the taxable wage base if the UI Trust Fund falls below 1.25% of aggregate taxable wages on December 31 of the prior year.
• makes very minor “reforms” to UI eligibility standards and lowers the number of employees a firm must have to participate in the Shared Work program.

The bill has not yet been introduced in either house of the Legislature and with the clock running on the legislative session, it is unclear whether the Legislature will consider this or their proposal (S.2245-B/A. 4921-B).

The Business Council, along with others, have been clear with the Legislature and Governor that Trust Fund solvency is a serious issue we are interested in discussing, and ought not be tied to a benefit increase. This rationale has not been supported in either branch. Both bills will have a serious tax impact on New York’s businesses. The Legislature’s bill gives more latitude to the Department of Labor in terms of setting taxable wage bases to sufficiently fund the benefit increases and to maintain solvency. The Governor’s bill addresses solvency over time through the elimination of the lowest tax rates. Tying the UI benefit to 50% of the state’s average weekly wage also has a disproportionate impact on many busiensses across New York State. While the state’s average weekly wage is approximately $1,200, average weekly wages in 48 counties are at or near 50% of the current maximum UI benefit of $405. The state’s average weekly wage is driven by wages from Manhattan and Westchester.

We will continue to lobby for a sensible approach to Trust Fund solvency but urge all to make their views known to their legislators and to me, if there are other concerns you would like us to advance.

The Business Council has joined with a bi-partisan group of legislators, other business groups and Gov. Paterson to call on the Assembly majority to vote on an economic power program.

The coalition’s release states:  “Working in partnership, Senate Energy Committee Chair Senator George Maziarz, co-sponsor with Energy Vice Chair Senator Darrel Aubertine prime sponsor, and Governor David A. Paterson worked together with the Assembly to develop a unified solution to a longstanding problem.  The Power for Jobs and Energy Cost Savings Benefit programs have provided low-cost electricity discounts to businesses, institutions and non-profit organizations across the State in return for capital investment and job commitments.

However, for the last five years these programs have been extended one year at a time, thus failing to provide program recipients with long-term certainty on their energy costs, a key factor in recipients’ decisions to expand operations and investments in New York.  Additionally, the Power for Jobs and Energy Cost Savings Benefit programs were not backed by actual hydropower, but rather, were dependent on the availability of revenues from the New York Power Authority.

Kenneth Adams, president and CEO of The Business Council of New York State, Inc. said, “New York needs a permanent economic development power program now. Competitively priced power is crucial for employers and workers across New York, and particularly for upstate manufacturers.  We support legislation that has already passed the Senate with broad, bipartisan support, and deserves broad Assembly support as well.  A permanent power program will support hundreds of energy-intensive businesses and tens of thousands of high paying jobs.”

The Energize New York legislation (S.8065), crafted under an extensive public and bipartisan process, which included joint Senate and Assembly hearings and roundtables across the state, would create a sustainable economic development program supported by an actual power resource, and would provide businesses with certainty through seven year contracts.

Business groups across the state including the Business Council of New York State, the Manufacturers Alliance, the New York Federation of Independent Business, the Long Island Association, the Buffalo Niagara Partnership, the New York City Partnership and other regional economic development and business associations and unions have come out in broad and enthusiastic support of the S.8065’s well developed approach to a long standing and annually recurring debate on the reliability and extension of these important programs.

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