JANUARY 23, 2021 (9:00 AM)

New bills introduced this week.

S – 2721 – Requires the governor’s tax expenditure reporting to include an enumeration of all fossil fuel related tax expenditures; imposes a 5 year expiration upon any fossil fuel related tax expenditures enacted.

Yet another sleight of hand maneuver sounding fanciful but simply meaning deductions for the use of fossil fuels, that is money NOT collected as a result of a charge against income, should be stated as “tax expenditures” and eliminated after 5 years. Loss of the deductibility of an expense increases the cost of such fuels and increases profits that are taxed. Think of the deduction for mortgage interest on your home: a tax expenditure is expressed as the money NOT collected as a result of that deduction, or in the aggregate, how much your govt. spends on housing.

The use of the term “tax expenditures” was addressed last year in a note to the current judiciary committee chair.

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A-3229 – This exempts those over sixty-five, depending on income, from the state sales tax on heating fuels sold during Dec., Jan., and Feb.  This is curious since the rate was progressively reduced to zero some years ago to abate the impact of higher fuel prices following embargo induced shortages. Localities may opt out.

Section 1115 of the tax law is amended by adding a new subdivision (ll) to read as follows:

(ll) Receipts from the sale of heating fuels sold during the months of December, January, and February, which are sold for home use by persons sixty-five years old or older who do not qualify for the low income home energy assistance program established by section ninety-seven of the social services law, but whose income is not above five hundred dollars more than the qualifying income for such program, shall be exempt from the tax on retail sales imposed under section eleven hundred ten of this article.

Action on bills followed:

NY S00820 Provides that the Governor’s annual budget proposal to the Legislature shall include statements of any new legislation, amendment to legislation, or limitation   on the effect of any legislation contained in the budget; makes related provisions granting the legislature an equal role with the governor in the budget process.

 

The measure was sent to the NYS Attorney General for an opinion.  The “equal role” sought is an attempt to undo a court decision that gives the governor enhanced budgetary control, an essential power to control spending at which he has succeeded albeit with some fudge.  Politics is at play since any involvement of any AG is an opportunity for higher office. That is where Mr. Cuomo held elective office with great discretion to pursue high profile cases that led him to the executive chamber.

JANUARY 22, 2021 (5:27PM)

WE HAVE JOINED A COALITION OF INDUSTRY AND LABOR GROUPS TO CHALLENGE THE CARBON TAX BILL.

https://webcache.googleusercontent.com/search?utm_campaign=CMS%20Sharing%20Tools%20(Premium)&utm_source=share-by-email&utm_medium=email

January 22, 2021 (9:15)

The legislative introduction of budget bills has started soon to be followed by budget hearings.  It is unlikely the state will make any meaningful cuts in expenditures beyond cosmetic re-assignment of budget categories, and increase revenues from political factions with the least political power.

NY A01368 Relates to the right to clean air and water and a healthful environment. advanced to third reading cal.50

By amending the constitution this bill establishes a right for New Yorkers to clean air, etc., and through a cause of action to sue anyone presumed to have impaired that right.  Three other states have so amended their constitutions.  The bill is on third rdg and eligible for a note next Monday.

S 2522 – Increases the tax on low-taxed investment income of an individual’s New York taxable income attributable to long-term capital gain, dividends, or any other type of income taxed under the preferential rates of section 1(h) of the internal revenue code, or any successor provision thereto.  Readers are invited to contact their investment advisors and accountants.

 

January 21, 2021 (7:30AM)

Actions on bills followed:

State Bill Bill Name Last Action New Version Action Vote Sponsor Doc.
NY A01168 Establishes a carbon dioxide emissions price for electric generation from carbon-based fuel and creates a carbon dioxide emissions fund. REFERRED TO ENVIRONMENTAL CONSERVATION
NY A01368 Relates to the right to clean air and water and a healthful environment. reported
NY A02670 Directs the New York state department of health to conduct a study on the incidences of asthma in cities having a population of one hundred thousand or more and to prepare a report. REFERRED TO HEALTH
NY S00918 Declares a climate emergency threatening the state, nation and world; calls on the state to restore an optimal safe climate and to provide maximum protection from climate change to all people and species. REFERRED TO ENVIRONMENTAL CONSERVATION

 

January 20, 2021 (5:40PM)

*A126 - Directs the commissioner to promulgate the first list of emerging
containments within 30 days of enactment of this legislation.
 
Section 1 of the bill amends section 1112 of the public health law to
expand the list of chemicals to be included as of emerging
contaminants; and requires the commissioner to promulgate such list
within 30 days of the effective date.

This bill addresses “emerging contaminants”, a reference to an incomplete EPA  project the state wants the health department to complete and report on its progress.  You may recall in NYPGA v. the NYS Department of Public Health, the judge explicitly rejected the use of that term the health department offered in defense of amendments to the sanitary code.  A long list of chemicals is listed none bearing a relationship to propane,  A senate companion was also introduced.

 

January 20, 2021

*S 820 has been sent to the Attorney General for an opinion.  The bill grants the legislature an equal role with the governor in the budget process.  [See tracking NY Legislation]

New York’s form of government is a “strong executive” model that constitutionally affords the governor significant leeway and power to determine the amount and composition of of the budget, a prerogative strengthened in a favorable ruling for Governor George Pataki.  If the bill succeeds the power the legislature will be restored to the status prior to that decision, still leaving the governor with considerable authority over the budget process. This is important because both houses have super majorities to override gubernatorial vetoes and leaders in both houses are vulnerable from the left and feel pressure to yield to the strong factions that elected the legislature.

January 19 2021

The governor’s budget message contained references to spending cuts, revenue increases and uncertainty on the amount of the federal bailout. A repetition of ideas rolled out for months.  Revenues were higher than expected but not enough to cover the state’s budget gap and even if Congress provides $15b – as the governor wants- to cover the $6b gap and then some, the out years would still be in deficit without structural changes to the state’s pattern of spending.  He intends to “tax the rich” – by now an old and flawed idea – that he acknowledged might cause more flight and implored Congress to repeal the SALT in a rather muddled explanation that came out as a tax on mortgages and local taxes.  That is an odd formulation but the cap on state and local taxes results in higher federal and state tax payments.  The irony is the state and localities have been able to increase taxes with less controversy precisely because they offset federal tax liabilities, but citizens of other jurisdictions are disportionately burdened.  SALT was popular in those states and less so in high tax state like NY, IL, CT, and others.  [See below from the last report]

To close a budget gap of $15 billion likely sources of revenue include increases in the Person Income Tax (PIT), the Stock Transfer Tax, General Sales and Use Taxes, the Corporate Income Tax and adoption of a Carbon Tax. The stock transfer tax is collected now but “rebated” leaving the state the option of withholding part or all. Financial markets do not exist in geographic locations but wherever the computers are locate.  The money market is a thing, not a place, so the state must tread carefully.

That fiscal scenario was prior to the election of Mr. Biden and democrat control of the US Senate and suggests additional state bailouts to cover the NY deficit by an amount in excess of revenue lost to the impact of Covid-19.  Out year gaps are $8.7b in 2022, $9.7b in 2023, and $9.4 in 2021.  Mr. Cuomo has suggested he wants more including repeal of SALT.

 

[NB] To view what a bill does click on “Tracking NY Legislation”, the bill and move to the column, What this Bill Does. Not every bill has my notation.