518-436-6673 brescia@nyall.com

The extent to which Governor Andrew Cuomo can fault Washington for NY’s fiscal problems depends on the assistance of the media and the gullibility of the citizens of the state, but at the same time he has proposed a solution to keep employee incomes whole in the form of “payroll tax” to restore the revenue shortfall from loss of SALT deductions though the concept might be easier to grasp then to implement.
The tax law would be modified to make employers pay the state income tax normally deducted from employees’ gross pay and expense it against federal and state (?) obligations leaving the taxpayer with the same take home pay. Given the complexity of state tax law and the reaction of the IRS the outcome is questionable
If successful (the legislature must agree) he must also fill a budget gap some attributable to the SALT deal but more the product of obligations the state incurs to meet expected costs. In New York budget gaps always exist because of projected expenditures to which the state is contractually committed are inevitably greater than revenue from stable sources inviting questionable reliance on “one-shots”. These are usually legal settlements of litigation brought by the state or others seeking a share of ill gotten gains by the usually suspects – tobacco, banks, insurance companies, drug companies – or other artifice of fiscal chicanery well practiced in public budgeting.
The governor has successfully walked a fiscal tight rope keeping expenditures and taxes under control – provided you don’t look too closely. So he deserves some credit.
Now he is threatening either more taxes and fees or cuts in school spending – that means library and afterschool activities to place pressure on parents who rely on the nanny state – and other cuts in public services to motivate public unions to speak to legislators. The usual list includes cuts in public safety, health care, transportation or other critical areas that inconvenience people most and soften resistance.
On Monday, February 26, the Supreme Court will hear arguments in Janus v. AFSME to determine if public employees may refuse to pay union dues – the closed shop vs. right-to-work battle – an outcome likely to change state budgets and politics for as many years as the closed shop has pressed many states to raise taxes to levels sufficient to cover rising personnel costs and drive populations to lower tax jurisdictions. While impossible to know the outcome in June, oral arguments in Fredrick’s v the California School two years ago, indicate open shops would have been law but for the death of Justice Scalia. The cases are legal indistinguishable.
Politicians are acutely aware of the implications on revenue and political power to degrees leading some cynics to regard a ruling for Janus might relieve even democrat governors of the budget anxiety of facing public sector union demands. It would not be the first time politicians blame the court for the consequences of a ruling.

LEGISLATION
Senate 7395 – Tedisco – is expected to undergo changes to make it more palatable to the propane industry, under attack by Assemblyman Santabarbara’s bill and PR effort to essentially smear our industry. The first version of his bill was incoherent, the second good enough to pass the Assembly with little penetrating scrutiny by usually competent attorneys. Our newest version, currently being reviewed by Senator Tedisco, removes the option of customers out of gas and at risk of life, health and property, to have the a tank they do not own filled by someone else. We have narrowed the “emergency“ window to specific conditions: declarations of emergency at the federal, state and local level if such declaration applies to propane and that companies succeeding to such a delivery notify the existing supplier and tank owner within forty-eight hours of the amount of fuel and the results of the required integrity test.

Lobbyist

Legislative and Regulatory Counseling

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Brescia@nyall.com
518-463-6673

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