RESTORING NEW YORK S ECONOMIC ENGINE. NFIB/NY s 2014 Legislative Agenda

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1 RESTORING NEW YORK S ECONOMIC ENGINE NFIB/NY s 2014 Legislative Agenda

2 2 What is NFIB? The National Federation of Independent Business (NFIB) is New York and the Nation s leading small business advocacy organization. Headquartered in Nashville, Tennessee and with a significant presence in Washington D.C. and in every state capitol across the country, NFIB truly is the voice of small business. As a member driven organization, the public policy platform we promote is directly tied to the interests and voice of our members. NFIB is not an organization driven by big business. 60% of NFIB members have 5 or fewer employees. 55% of NFIB members report gross sales of $350,000 or less. NFIB is proud to represent Main Street and work with lawmakers on both sides of the aisle to provide an economic environment conducive to small business.

3 3 Dear Lawmaker The National Federation of Independent Business is New York s leading small business advocacy organization. Representing nearly 11,000 small and independent businesses across New York, NFIB s mission is to promote and protect small business owner s right to own, operate and grow their business. As the largest organization representing small business in the state, NFIB/NY supports fair tax policies and sensible regulations as a means to restore and revitalize New York s small businesses. The importance of small business to New York s economy cannot be understated. At most recent count, there were more than 1.5 million small businesses in New York, employing more than sixty percent of the state s private sector workforce. In addition to creating employment opportunities, small businesses strengthen our communities through their vital role in local economies. Whether employing our neighbors or providing readily accessible goods and services, small businesses are an integral facet of our daily lives. An unprecedented level of uncertainty however threatens small business as the economic engine of our state and local economies. Key policy decisions in both Washington, D.C. and Albany during this legislative session will impact the sustainability of many small businesses in our state. NFIB/NY s legislative agenda both represents our principles and sets forth the foremost issues of importance to our members. We encourage you to consider the profound impact legislation has on small business. We look forward to working with you to promote policies that will benefit small businesses and taxpayers, propelling New York to a better economic future. Very truly yours, Michael Durant NFIB s mission is to promote and protect your right to own, operate and grow your business.

4 4 Tax Reform NFIB/NY s broad tax relief plan aims to reduce the substantial tax burden on New York s small businesses. Sensible tax reform will provide both tax relief and clarity for Main Street. Corporate Taxes (Article 9A) With a default tax rate of 7.1%, NFIB/NY recommends a phased down tax approach for small businesses with Entire Net Incomes of $500,000 or less. - $375,000 - $500,000 = 6.85% - $225,000 - $374,999 = 6.25% - Less than $224,999 = 5.85% PIT Reductions NFIB/NY strongly urges any tax reform to be broad in impact. Many small business owners pay their business taxes through their personal income tax returns. It is essential that any tax reform plan incorporates both personal and corporate tax reductions. Anything short will put more of New York s stifling tax burden on the shoulders of the small business community. Sales Tax Assessments NFIB/NY supports S.2710 (Young)/A.5936 (Schimminger) a bill that reforms the sales tax assessment process by utilizing regional/local economic factors in computing sales tax when a filing has not been made or when it was calculated incorrectly by a business. Current practice uses external indices without recognition of the variation in costs of goods and services based on the local economy, resulting in inflated taxes beyond reasonable measure. In 2013, the Tax Foundation ranked New York 50th in Business Tax Climate. New York consistently ranks as having the nation s worst state and local tax burden. New York has no future as the tax capital of the nation... - Governor Andrew Cuomo, State of the State address on January 5, 2011

5 5 NFIB/NY Opposes a Property Tax Circuit Breaker As staunch supporters of the previously enacted property tax cap, NFIB/NY has consistently been a voice for significant mandate relief to further reduce the large property tax burden in New York. While we urge a continued focus on reducing property taxes, we strongly reject a circuit breaker proposal. Implementing a circuit breaker will not broadly reduce the sizable property tax levy New Yorker s face. A circuit breaker is merely a politically simplistic tax shift. Given most small businesses are pass through entities, a circuit breaker may force small business owners to shoulder a disproportionate share of the tax load. Albany should focus on reducing property taxes by implementing sensible and meaningful mandate relief. Additional Tax Reform Measures Repeal the MTA Payroll Tax NFIB/NY recommends a full repeal of the MTA payroll tax. The tax code overhaul agreement in December 2011 repealed a part of the onerous MTA payroll tax by exempting small businesses with less than $312,000 in payroll per quarter. This repeal however fails to provide relief for a significant portion of small businesses that need tax relief. Repeal the 18a Energy Assessment NFIB/NY recommends enacting S.2435 (Ranzenhofer) /A.382a (Hawley) to immediately repeal the 18a assessment. While the enacted State Budget is phasing the 18a assessment out over the next three years, energy costs remain a top concern for small businesses and the immediate repeal of this assessment should be part of any tax reform proposal. Cut Taxes for Manufacturers The Enacted State Budget significantly cut corporate franchise taxes for qualified New York manufacturers over a five year period ( ). Unfortunately, this reform did not include a similar tax reduction for sub-s corporations. A similar five year phase down of taxes would reduce costs for small manufacturers and create equity in New York s tax system. Fiscal Note Requirement NFIB/NY supports legislation that would require fiscal notes on bills that would financially impact any political subdivision. Fiscal notes help lawmakers make informed decisions on legislation that would increase costs on taxpayers, small businesses and localities. Require Two-Thirds Majority for any Tax Increase NFIB/NY recommends any tax increase must pass the legislature with a two-thirds majority. A number of other states (approximately 16) require a super-majority to approve any tax hike. In 2010, NFIB/NY balloted this question to our members, with 85% stating that they would support a constitutional amendment implementing this reform. Reform the Estate Tax NFIB/NY supports S.3035 (DeFrancisco) / A.5293 (Thiele), a bill that would raise the threshold for taxing estates to match the federal level. Increasing the threshold would incentivize individuals with family businesses to remain in New York rather than changing residence to states with no estate or inheritance taxes, such as Florida, Texas or California.

6 6 Regulatory Reform Repeal the Wage Theft Prevention Act. Repeal the Diesel Emissions Reduction Act (DERA). Create a statewide agribusiness regulatory review committee to evaluate current/proposed regulations. Reform the online process/forms for vendors and contractors to complete in order to apply for and receive sales tax credits. Exempt small scale, on-farm processing sites from state building code, local zoning and permitting requirements. Repeal the $50 penalty to file a late sales tax form when no tax is due. Streamline DOL paperwork for work share programs by creating an online system that populates timesheet information that remains the same each week or allow photocopying of a timesheet that retains basic information. Analyze and reform the SEQRA process with the goal of improving and expediting the review process to create necessary jobs faster. Reforms should focus on transparency and definitive timelines. Phase out the Systems Benefit Charge as a means to lowering energy costs and creating jobs. Use alternate project delivery methodologies in infrastructure development including allowing the use of best value/low price. Allow businesses to pre-fill Certificates of Authority using information from the previous year and requiring businesses to only make changes when/if changes occur. The 2013 Workers Compensation Reform should be reinforced with the immediate adoption of the American Medical Association guidelines and the implementation of the American College of Occupational and Environmental Medicine Treatment protocols. Implement a comprehensive evaluation and training program for Administrative Law Judges involved in the Unemployment Insurance and Workers Compensation appeals process in order to promote consistency in rulings and provide needed clarity for small business. New York s anti-business reputation is cemented in place until comprehensive regulatory reform is implemented. Onerous red tape is costing NY jobs, interrupting day-to-day operations and forcing small business to alter their future business plans. Sensible regulations are necessary to restore New York s economic engine.

7 Tort Reform Reform the notorious Scaffold Law NFIB/NY strongly supports S.111 (Gallivan) / A.3104 (Morelle). New York is the only remaining state in the country that has a strict liability standard for gravity related accidents. This necessary reform will adopt a comparative negligence standard to balance worker safety while allowing businesses to have their day in court. NFIB/NY Opposes S.555a (DeFrancisco) / A.1002a (Weinstein) a bill that permits a plaintiff to recover directly against a third party defendant when the judgment against the original defendant has not been satisfied after thirty days. Under the state s existing joint and several laws, third party defendants like municipalities, are often forced into litigation. This bill would compound that problem by encouraging plaintiffs to add as many third party defendants as possible. NFIB/NY Opposes S.744 (Fuschillo) / A.1056 (Weinstein) a bill that would amend the statute of limitations for medical, dental or podiatric malpractice to include a discovery of injury rule. This legislation would have the practical effect of extending indefinitely the time period within which a lawsuit may be filed, putting physicians and hospitals at greater risk, driving up the cost of medical liability insurance and exacerbating the physician shortage in many counties across New York. Trespasser Liability Reform New York is one of a minority of states that holds a land owner responsible for injuries to any reasonably foreseeable entrants on property, including unwanted trespassers. This means that a person who enters another s property without legal right or permission, and sustains an injury, can sue the land owner for that injury. This has directly led to a significant cost increase in insurance premiums for small businesses across the state. NFIB/NY Opposes S.2769 (Parker) / A.2047 (Kavanagh) a bill that would allow private citizen suits to be brought in response to alleged violations of Environmental Conservation Law. This legislation would not significantly enhance environmental protections and would increase an already burdened court system with frivolous lawsuits. Additionally, this bill would allow citizen lawsuits even when the DEC and/or Attorney General s office have decided that an alleged violation does not warrant enforcement. Tort reform is an essential piece of the NFIB/NY agenda. New York City and Albany continue to rank among the top 5 judicial hellholes in the nation by the American Tort Reform Foundation. This litigious environment is directly related to our high business costs and is a direct contributor to New York s continued outmigration problem.

8 8 Natural Gas Development NFIB/NY opposes the continued delay and efforts to extend New York s moratorium on natural gas development. By opening the Marcellus Shale region for safe natural gas drilling, New York will produce thousands of jobs, provide essential state and local tax revenue and provide substantial induced benefits for small businesses. NFIB/NY advocates for the sensible regulation of natural gas drilling and strongly urges expediency in determining New York s course of action on this crucial issue. Further delay will only kill this once in a generation opportunity for New York to create jobs, increase revenue and reduce energy costs. Product Bans NFIB/NY believes that New York should look to sensibly regulate products, especially those used in manufacturing. More than a dozen consumer product safety laws already provide oversight of products to ensure safety for intended use. Unilaterally banning products that allegedly pose a risk to the health and environment absent any proven scientific fact, poses a threat to jobs across a myriad of industries and the sustainability of many manufacturers, particularly in Upstate New York. NFIB/NY opposes S.4614 (Boyle) / A.6328 (Sweeney) which would onerously regulate chemicals in products. NFIB/NY opposes S.4780 (Grisanti) / A.6557 (Sweeney) which prohibits the use of chemical flame retardants on upholstered furniture. NFIB/NY opposes A.1654 (Maisel) which prohibits the manufacturing, sale or distribution of business transaction paper containing Bisphenol A. NFIB/NY opposes S.3419a (Krueger) / A.4973a (Kavanagh) which would implement a statewide ban on the use of polystyrene. This directly threatens thousands of manufacturing jobs in Upstate New York.

9 9 Mandate Relief New York s school districts and municipalities need comprehensive relief from state imposed mandates. The property tax cap put in place in 2011 was the first step to reining in the property tax burden in New York. Now Albany must implement meaningful mandate relief to sustain the tax cap and provide fiscal flexibility for our schools and communities. NFIB/NY is a proud member of the historic Let NY Work coalition and is working to advance this bold and aggressive mandate relief agenda. No New Mandates Adopt S.4094 (O Brien)/ A.3106 (Morelle) the Unfunded Mandate Reform Act, allowing the Governor to submit a plan, requiring legislative approval, to repeal/revise unfunded mandates. Reform the Wicks Law Reform the Scaffold Law Freeze step increases when contracts expire Establish minimum health contribution levels for Public Employees and Retirees Pass the Public Construction Savings Act, S.3484 (Ranzenhofer) / A.6523 (Schimminger) Appoint the Health Care Quality Cost and Containment Commission New York will never truly be open for business if we continue to avoid addressing the underlying reasons for the fiscal peril our schools and communities face. The tax cap was the first step towards a necessary recalibration of fiscal practices in New York. Mandate relief needs to be the dramatic second step.

10 10 Additional Legislative Priorities Expansion of Prevailing Wage NFIB/NY opposes any bill that would broaden prevailing wage requirements. Small business owners are troubled by the seemingly endless expansion of prevailing wage mandates, with 87 percent of NFIB members opposing prevailing wage mandate expansions in our 2009 Member Ballot. New York s cost of doing business is already the second highest in the nation. Our state and local tax burden is the second worst in the country, and per capita state and local spending in New York is among the highest in the nation. It should come as little surprise that New York s economic outlook is continuously forecasted to be the worst in the United States. Mandating prevailing wage for projects would increase costs --and result in added costs for business and taxpayers. NFIB/NY strongly opposes the Farmworkers Fair Labor Practices Act S.1743a (Espaillat) / A.1792a (Nolan) which would impose factory style labor mandates onto our family farms. Supports S.1119a (Maziarz)/ A.4202a (Camara) which allows for the storage and transportation of Liquefied Natural Gas. Supports S.1671a (Grisanti)/ A.5365 (Schimminger) which provides for an asbestos remediation tax credit. Supports legislation to provide necessary broadband internet access and infrastructure throughout New York, particularly Upstate. Opposes Family Medical Leave expansion legislation. Most small business owners accommodate their employee s needs in an emergency situations. An estimated 96 percent of small business owners offer flexible working hours for their employees when necessary, and 75 percent of employers provide some form of paid sick leave. Expanding the FMLA again will drastically increase the amount of paperwork and money a small business owner must spend to comply, adversely impacting other benefits offered and/or their ability to grow their business and add new jobs. Opposes legislation that would impose new coverage mandates on health care. These well intended pieces of legislation only further drive up New York s health care costs, which are among the highest in the nation. Tax, Fee and Toll Increases NFIB opposes any tax, fee or toll increases on New York s employers and taxpayers. Small business--the engine that drives our economy--simply cannot afford any more costs, especially in this challenging economy. After three consecutive fiscally responsible budgets, New York cannot revert back to its tax and spend ways of the past.

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