FY2024 Executive Budget Proposal Brief
To: Greater Rochester Chamber of Commerce Members
From: Marc Cohen, Chief of Staff
Date: May 3, 2023
Re: FY2024 Executive Budget Proposal Brief
Summary: On May 2, 2023 the FY2024 budget totaling $229 billion was formally passed. The purpose of this brief is to offer an overview of the FY2024 Enacted Budget items most relevant to Greater Rochester Chamber members throughout the Finger Lakes Region. This is not intended to be a comprehensive review of every element of the FY2024 Enacted Budget. There are many issues outside of the Budget that we are tracking and will offer updates on as they develop.
Major items most relevant to Greater Rochester Chamber members include: (1) public safety reform; (2) tiered increases to minimum wage; (3) minor increases to Medicaid reimbursement rates for hospitals and nursing homes; (4) economic development measures and incentives; (5) workforce development initiatives and increased funding for education; (6) several environmental sustainability provisions; and (7) no increases in income taxes. Notably, several items were omitted from the Enacted Budget including: (1) Governor Hochul’s housing plan; (2) cap and invest; (3) expansion of extended producer responsibility (EPR); and (4) requiring NYS S Corp conformity with federal returns.
Public Safety: In our region and beyond, gun violence and crime plague communities which results in the halting and reversing of positive progress in economic growth. The Enacted Budget eliminates the requirement that judges employ a “least restrictive means” standard when considering bail and allows judges to prescribe other pretrial services to those accused of crimes including counseling and chemical dependence treatment. The “return to court” standard remains which states judges are required to set bail at a level to ensure they return to court. The Enacted Budget also includes funding for gun prevention and anti-crime initiatives as well as cracks down on the illicit marijuana market. The Enacted Budget also includes $20 million for services and expenses related to the creation and operation of a fiberoptic cable-based network for public safety answering point centers.
Minimum Wage: Upstate’s minimum wage, currently $14.20, will increase to $15 on January 1, 2024, $15.50 on January 1,2025, and $16 on January 1, 2026. After this point the minimum wage will be tied to inflation. The Enacted Budget does include exemptions to this rule should there be a downturn in the economy including if the non-seasonally adjusted consumer price index for the northeast region urban wage earners and clerical workers is negative, if the three-month moving average of the seasonally adjusted New York State unemployment rate rises by ½ % or more over the previous year, or if there is a recurring decrease in the seasonally adjusted, total non-farm employment for New York State.
Healthcare: Our regional hospital systems are the largest employers in Upstate New York and our nursing homes provide critical services for some of our most vulnerable populations. Greater Rochester Chamber of Commerce advocated for eliminating the 340B carveout and increasing Medicaid reimbursement rates to 20% for these facilities. Medicaid reimbursement rates for hospital inpatient services increased by 7.5%, Medicaid reimbursement rates for hospital outpatient services increased by 6.5%, and Medicaid reimbursement rates for residential health care providers, like nursing homes, increased by 6.5% with a potential to increase “up to 7.5%” upon federal approval. Additionally, the budget allocates $1.4 billion to the Vital Access Provider Assurance Program, which helps safety-net hospitals and residential health care facilities in severe financial distress maintain their operations; 890 million in capital and $120 million in annual operating funds to build and run 3,500 new residential units for people in need of mental health services; and increases hourly rates of home healthcare workers in Upstate to $17.55 starting January 1, 2024 with 55 cent increases annually until 2027 after which increases will be tied to inflation.
Economic Development: The Enacted Budget includes: $225 million in grant funding and tax credits for the Regional Economic Development Councils; $100 million each to fund an additional year of the Downtown Revitalization Initiative and NY Forward; $50 million for the RESTORE New York Communities Initiative; $400 million for the NYWORKS Economic Development Fund; expansion of the New York Film Tax Credit to $700 million, an extension of the application deadline for the COVID-19 Capital Costs Tax Credit Program from March 31, 2023 to September 30, 2023 to allow small businesses more time to apply for this tax credit (the COVID-19 Capital Costs Tax Credit Program offers tax credits to small businesses that incurred costs to comply with public health or other emergency orders or regulations related to the COVID-19 pandemic, or to generally increase safety through infectious disease mitigation); enhancing the Alcoholic Beverage Production Tax Credit amounts for cider, wine, and liquor with the intent to provide parity to the various small producers of these New York State beverages; and expanding the child tax credit to include families with children under the age of 4.
Workforce Development and Education: Access to reliable, qualified talent remains among our members’ most pressing concerns. The FY2024 Enacted Budget includes several relevant programs related to workforce development and education. The Enacted Budget provides $34.5 billion in school aid and fully funds foundation aid. It also includes $2.4 billion for SUNY and CUNY capital projects, $113 million in increased operating aid for SUNY, $103 million in increased operating aid for CUNY, and $50 million over five years to fund k-12 meals for school children. Additionally, 22 zombie charters (14 in NYC and 8 Upstate) are authorized to be revived, and there will be no tuition increases for SUNY or CUNY in-state students. $500 million was repurposed from underutilized federal funds to create a Workforce Retention Grant Program to support NY’s childcare workforce and $4.8 million was allocated for the new employer sponsored childcare pilot program.
Environmental Sustainability: The Enacted Budget includes a provision that will cause the building code to be amended to prohibit the installation of fossil-fuel equipment and building systems in any new building not more than seven stories in height, except for a new commercial or industrial building greater than one hundred thousand square feet in conditioned floor area, on or after 12/31/2025. The prohibition on the installation of fossil-fuel equipment and building systems extends to all new buildings after 12/31/2028. The prohibition does not apply to any building existing prior to the effective date. The prohibition in new buildings allows exemptions for the generation of emergency back-up power and standby power systems, in a manufactured home, or in a building or part of a building that is used as a manufacturing facility, commercial food establishment, laboratory, car wash, laundromat, hospital, other medical facility, critical infrastructure, including but not limited to emergency management facilities, wastewater treatment facilities, and water treatment and pumping facilities, agricultural building, fuel cell system, or crematorium. New buildings that fall under the exemption, except for agricultural buildings, need to limit the use of fossil fuel systems to the area of the building that is difficult or infeasible to electrify and need to be constructed in a manner that is electrification ready. The code also allows for exemption of a new building construction project that requires an application for new or expanded electric service when electric service cannot be reasonably provided by the grid as operated by the local electric corporation or municipality provided, however, that the PSC shall determine reasonableness for purposes of this exemption.
For more information or to inquire about specific aspects of the FY2024 budget, please reach out to Marc.Cohen@GreaterRochesterChamber.com.