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Fiscal '21 State Budget Analysis from Mark Dorr, NYSH&TA

Apr 6, 2020

As you all know, the State Budget contains many tourism related issues.
Below are the areas of most interest to the tourism community, including matching grant money and occupancy tax renewals etc.
Mark Dorr, NYSH&TA

NYSHTA LOGO.jpgNYSH&TA Report – Key Provisions in NYS FY 2021 Enacted Budget:

Matching Grants Funding: $3.8 million is provided to assist local tourism promotion agencies, which is $500,000 less than what was in the enacted budget last year.

Market NY Funding: The FY 2021 enacted budget appropriates $7 million in funding for Market NY to support tourism marketing plans and projects that best demonstrate regional collaboration among counties and promote regional attractions.

I Love NY: "I ♥ NY" Program: $2.5 million is appropriated for "I ♥ NY" tourism advertising, the same level as last year.

Regional Economic Development Councils (REDC): The enacted Budget allocates $150 million to support a 10th round of funding for the Regional Economic Development Councils initiative. The Budget provides funding to support new competitive economic development projects identified by the Regional Councils to further advance each region's long-term economic development strategies. $20 million of Empire State Development grant funding will be available across ten regions for projects advancing the needs of women entrepreneurs.

Taste NY Funding: $1.1 million is reappropriated for Taste NY, which is being transferred to Empire State Development (it was previously funded as part of the NYS Department of Agriculture and Markets budget).

Extension of Hotel/Motel Occupancy Tax: The enacted budget extends the authorization for Albany, Chautauqua, Nassau and Suffolk Counties to impose a hotel/motel use tax for an additional three years, until December 31, 2023.

Extension of Sales Tax: The enacted budget extends the authorization for various counties sales tax for an additional three years, until 2023.

Paid Sick Leave: The FY 2021 Enacted Budget enacts a paid sick leave program for working New Yorkers. Businesses with five to 99 employees will provide their employees at least five days of job-protected paid sick leave per year and businesses with 100 employees or more will provide at least seven days of paid sick leave per year. Smaller businesses, with four or fewer employees, will guarantee five days of job-protected unpaid sick leave to their employees every year. Small businesses already providing paid sick leave will be able to so. The enacted legislation authorizes the Department of Labor to promulgate regulations necessary to effectuate the provisions of the state. NYSH&TA will be directly involved with the Department of Labor to protect the interests of its members on the final regulations.

Ban Single-Use and Loose-fill Polystyrene Products:
This enacted budget establishes that, beginning January 1, 2022, no covered food service provider or store would be allowed to sell, offer for sale, use, or distribute disposable food service containers used to hold prepared food or beverages that contain expanded polystyrene foam. Additionally, no covered food service provider, manufacturer, or store would be allowed to sell, offer for sale, use, or distribute polystyrene loose fill packaging (commonly known as packing peanuts).

Product Stewardship Program: This enacted budget creates a new Product Stewardship Program for the recycling of carpets and mattresses. Such programs must include a process for discarding mattresses and carpets at no cost to any person or business. All fines derived from enforcement of the provisions in this title would be deposited to the credit of the Environmental Protection Fund.

Restore Mother Earth Bond Act: The enacted budget authorizes the creation of a Bond Act to fund critical environmental restoration and climate mitigation projects in every corner of the state to ensure New York is able to adapt to the intensifying impacts of climate change, and reduce emissions, while creating jobs and local economic development. As part of the larger Restore Mother Nature Initiative, the Bond Act will be a key source of funding for projects focused on reducing flood risk, investing in resilient infrastructure, restoring freshwater and tidal wetlands, preserving open space, conserving forest areas, and reducing pollution from agricultural and storm water runoff. It will also fund up to $700 million in projects to fight climate change, including green buildings. It also aims to spend 35 percent of the funds on projects to benefit underserved areas of the state. The Budget Director will assess the state's finances and the economic outlook later this year and make a determination as to whether to move forward with the Bond Act.

Key Provisions Not Included in Enacted Budget:

Expansion of Workers Compensation Law to make COVID-19 a Presumptive Disease: This proposal would have made COVID-19 an allowable, work related condition under current NYS Workers Compensation Law. It would have established COVID-19 as a presumptive occupational disease for occupations defined as “essential" by Executive Order 202.6. This includes, but is not limited to, hotels and other accommodations, in addition to the food service industry. Any employee who contracts COVID-19 while employed in an essential occupation, would have qualified for workers compensation benefits unless their employer was successful in challenging the case before the State Workers' Compensation Board. NYSH&TA and its partners lobbied hard on this issue and it had a positive outcome for businesses.

Gig Economy: Establish the New York Digital Marketplace Worker Classification Task Force: This proposal established the New York Digital Marketplace Worker Classification Task Force. This task force would issue recommendations, and authorize the Commissioner of Labor to promulgate regulations, related to wages, classification, employment criteria, safety and health, collective bargaining, and anti-discrimination protections for on-demand workers that provide services including, but not limited to, cleaning, housekeeping, and transportation.

Reduce the Tax Burden on Small Businesses: The Governor's Budget proposed amendments intended to alleviate the tax burden on small businesses. If enacted, the legislation would have reduced the corporate franchise tax rate on business income to a flat 4% for qualifying small businesses. Secondly, it would have increased the allowable deduction provided to small businesses for net items of income, gain, loss and deduction entering into federal adjusted gross income from 5% to 15% of those items. Finally, the bill would have eliminated the estimated tax underpayment penalty for New York S corporations.