Tom DiNapoli

New York State collected $2.9 billion more in tax income in 2022 than forecasted, but still made less than in 2021.

State Comptroller Tom DiNapoli released a report Monday that had tax collections for the last fiscal year totaling $111.7 billion. This is higher than what the Division of Budget forecasted but $9.5 billion lower than the 2021-22 budget year.

DiNapoli said the decline was primarily due to a decline in Personal Income Tax (PIT) receipts resulting from a variety of factors including: a decline in year-end bonuses in the financial services industry, claiming of credits related to the Pass-Through Entity Tax (PTET), the acceleration of the final phase-in of the middle-class tax rate cuts, and financial market volatility over the course of 2022.

Sales tax collections totaled $20.6 billion, exceeding the prior year total by $964 million or 4.9%. Business tax collections totaled $28.6 billion which was $891.8 million higher than the previous year, reflecting a 24.6% increase.

He said that state policy makers should ensure that the state budget committs additional resources to the state’s reserve funds to improve long-term financial stability.

DiNapoli said, “While tax collections have exceeded projections, they were considerably lower than last year. Although easing, inflation continues to present challenges to economic growth. State policy makers should ensure that the enacted budget for State Fiscal Year 2023-24 commits additional resources to the state’s reserve funds to improve long-term financial stability.”

The report is being released as a state budget for the current fiscal year remains unresolved.

Minimum wage

New York State Department of Labor Commissioner Roberta Reardon issued the order calling for the increase for counties outside of New York City, Long Island, and Westchester to rise by $1 per hour. The current rate is $13.20.

The decision comes following a required economic analysis by the State Division of Budget which found evidence of pressure for wages to rise in the midst of a continued pandemic-driven labor shortage.

Key findings from the DOB’s report include that regional unemployment rates outside of New York City are at historic lows. The 3.1 percent rate for this area for the four months from April through July 2022 is the lowest in the history of the data going back to 1976 and is lower than the national 3.5 percent rate for the same month.

Also, low-wage industries are over-represented among the State’s remaining job losses due to the early impact of the pandemic. Although the minimum wage workers’ share is likely to rise as the low-wage sector recovery proceeds, the size of the minimum wage workforce is likely to continue to be constrained by a rise in entry-level wages as firms compete for workers.

The report also found that New York is experiencing a job gap of 351,000 relative to its pre-pandemic peak. Anecdotal evidence combined with alternative data sources argue that labor shortages could account for much of New York’s remaining job gap, particularly Upstate.

Like the rest of the nation, the New York labor market is expected to continue to slow in the coming months, with employment growth projected to slow from 4.3 percent in 2022 to 0.8 percent in 2023. State employment is not expected to reach its pre-pandemic level until 2026

A wage increase would affect about 200,000 workers, 44% of whom are full-time employees. About 25% support children under the age of 18.

A public comment period is now open on the order. Feedback may be e-mailed to regulations@labor.ny.gov by December 11, 2022.

If accepted, the wage increase would take effect on December 31, 2022.

The decision was swiftly criticized by the agricultural industry and the Republican Party.

The Albany Times-Union reports, the decision, 2-to-1 vote of the panel, would lower the current 60-hour overtime threshold for farm laborers over a 10-year period, which would reach 40 hours by 2032. The board agreed to lower the threshold by four hours per week every two years beginning in 2024.
The board’s decision will be sent to state Department of Labor Commissioner Roberta Reardon, who has the final say and could modify the recommendations.

A proposed overtime tax credit for farm owners by Governor Kathy Hochul in her budget did not play into the deliberations of the board. Advocates on both sides of the issue could not explain the complicated tax credit proposed; the state Division of Budget declined to explain the credit.

The vote came quickly and appeared to surprise board member and Farm Bureau President David Fisher. It followed nearly 12 hours of meetings this month, most of that public comment.

A majority of the comments were in favor of not lowering the threshold and came primarily from farm owners, who said that the change could cause the collapse of not only their family-run business but the industry at large.

The comments from farm owners, buoyed by the state Farm Bureau and a coalition supporting the bureau, were dramatically different from what civil and labor rights experts, advocates and activists proposed. The labor advocates argued that farm workers should be entitled to a 40-hour work week like the rest of the workforce.

State Senator George Borrello released a statement saying, “The Farm Laborers Wage Board and the Democrat One-Party-Rule which empowered them have dealt a potentially fatal blow to the livelihoods of New York State’s hard working farm families with the devastating decision to recommend lowering the farm worker overtime threshold to 40 hours per week. This move will spell the beginning of the end for many farms in this once-vibrant industry and force others to scale down production, increase automation or relocate.”

“It is tragic that New York’s farmers and agricultural industry have been sacrificed for political expediency. This fall, data from an independent report by Cornell and presented to the Department of Agriculture and Markets made it clear that lowering the threshold will benefit no one and will force both farmers and farm workers to seek their livelihoods in other states or occupations. Yet, as we’ve seen countless times in the past three years, facts and common-sense carry little weight under Democrat One-Party Rule.

The New York Farm Bureau is scheduled to hold a press conference this morning to discuss Friday’s Farm Labor Wage Board overtime threshold decision.

According to the Division of Budget’s Summary, “The scope and depth of the reductions to local aid programs needed to balance the FY 2021 Budget have no precedent in modern times. In the absence of Federal aid, nearly every activity funded by state government in the aid to localities budget … will face steep cuts.”

These cuts are expected as the COVID-19 pandemic is spiking demand for social services such as TANF, HEAP, child support, child welfare services and adult protective services.

“Local governments are teetering on the edge of a fiscal cliff as demands for services rise and economic activity is at a standstill. Counties are the foot soldiers in the war against COVID-19, and without direct federal support, they’ll be running out of the resources necessary to continue the fight,” said NYSAC President John F. Marren.

Early estimates project revenues from local sales, which are the lifeblood of local government, are falling off a cliff. Initial projections from the most recent data available show severe declines in retail activity, including:

• Motor Vehicle & Parts Dealers – loss of 23.7%
• Gasoline stations – loss of 18%
• Department stores – loss of 23.9%
• Clothing & Accessories – loss of 50%

These categories of economic retail activity represent some of the largest segments of the economy contributing to sales tax, a major source of revenue for county governments.

“Local taxpayers cannot absorb the loss of this revenue and state aid cuts. As Congress negotiates the next COVID-19 response package, we are asking them to ensure that there is direct and flexible funding for the county governments who are on the front lines of this critical public health and economic crisis” said Albany County Executive Dan McCoy, president of the New York State County Executives’ Association.

“County governments are facing an unprecedented perfect fiscal storm as severe revenue loss and high demand for social service program are threatening to overwhelm county governments interfering with our efforts to combat COVID-19,” said NYSAC Executive Director Stephen Acquario. “Without help from the federal government in the form of direct aid to local governments, counties simply won’t be able to provide the essential services that are crucial to stopping the virus and reopening our communities.”

Chautauqua County Executive Vince Horrigan.

MAYVILLE – County executive Vince Horrigan has submitted the county’s multi-government efficiency plan to Albany as part of the state’s Property Tax Freeze Credit program.

According to Horrigan’s office, the plan included the participation of 30 of the 45 government entities in the county and demonstrates a projected local savings of nearly $13 million during the years of 2017 through 2019.

Some of the efficiencies identified in the plan started as early as 2012.

Some of the efficiencies outlined in the plan included:

• The privatization of the Chautauqua County Home with an approximate $2.6 million per year savings in IGT Funding;
• The Towns of Dunkirk, Pomfret, Portland, Sheridan and Village of Brocton participating in the North County Water District, saving $365,000 per year during the plan year of 2017 through 2019;
•  The merger of the Chautauqua County’s Department of Social Services and Department of Health into the Department of Health and Human Services with an ongoing savings of $235,000 per year;
•  The City of Jamestown’s reduction and realignment of staff duties while maintaining the same level of services resulted in $190,961 of ongoing savings;
• The reduction of the size of the Chautauqua County Legislature with a savings of $67,000 each year.

The Property Tax Freeze Credit Program encourages local governments to generate long-term relief for taxpayers by sharing services, consolidating or merging, and demonstrating and implementing operational efficiencies.

Each county is required to send an efficiency plan had to the State Division of Budget. Additionally, the local government must comply with the 2% Property Tax Cap in order to ensure that homeowners, who have a total household income of $500,000 or less, are eligible to receive the rebate on their primary residencies in 2015 and 2016.

For more information about the tax rebate visit the New York State Division of Budget website at www.budget.ny.gov/govEfficiencyPlans/govEfficiencyPlans.html .