The From the Lobby podcast features a behind-the-scenes look at politics and government from New York State to Washington, DC with Jack O’Donnell, an Albany insider and Managing Partner of O’Donnell and Associates, a top lobbying firm that helps clients all over the country cut through government red tape.
Don’t be stuck on the sidelines. Get a front-row seat to what’s happening in politics with Jack! From the issues that affect taxpayers and business owners to the history of the budget process in New York, Jack has the knowledge and depth of experience to cut through the rhetoric and tell you what’s really going on.
Summary of this Episode
Guests
- Ashley Ranslow: New York State Director of the National Federation of Independent Business
- Alec Lewis: Vice President and Director of Campaigns at O’Donnell and Associates.
- Joanne Pasceri: Director of Communications at O’Donnell and Associates
Major Topics Covered
• Ashley Ranslow, NY State Director of NFIB, discusses her role in advocating for small businesses in Albany.
• NFIB secured an expansion of small business tax deductions from 5% to 15% in NY, providing some tax relief.
• NY’s $7 billion unemployment insurance debt creates a “triple tax increase” burden on businesses.
• Ranslow urges NY to use COVID relief funds to pay down the UI debt and provide relief to small businesses.
Full Transcript of the Episode
Note: This is a generated transcript. Please excuse any typos.
Joanna Pasceri 00:06
Hi everyone, we’re back from the lobby with Jack O’Donnell. A podcast that takes a deep dive into politics and business in New York. With Jack, Managing Partner of O’Donnell and Associates, a top government relations firm that helps clients cut through red tape and reach their goals. I’m Joanna Pasceri, Director of Communications at O’Donnell and Associates. In this episode, just how healthy is the New York economy? And at the mic once again for Jack is our Alec Louis, Vice President and Director of Campaigns. Alec knows New York, having spent the past decade working with the New York Senate Democrats before coming to O’Donnell and Associates. Alec has a special guest, Ashley Ranslow, New York State Director of the National Federation of Independent Business. Alec is going to talk to Ashley about her work with New York’s small business community and the opportunities and challenges here in New York to create jobs and grow the economy. Hi, Alec and Ashley, welcome to the podcast.
Alec Lewis 01:13
Hi Joanna. It’s great to have you on and it’s even better to be joined by Ashley. Ashley, welcome to the program.
Ashley Ranslow 01:18
Thank you so much for having me.
Alec Lewis 01:20
It is absolutely great to have you on and Ashley, you are no stranger to upstate New York, having graduated from Syracuse University. And after five years with the northeastern retail lumber Association, you became the New York Assistant State Director for the NFIB in 2018. Now since 2022, you’ve been serving as the New York State Director for the NFIP. So Ashley, can you explain really what you do in your role as New York state director? And can you outline some of the differences and focus that the NFIB has with small businesses here in New York as opposed to the Business Council of New York State?
Ashley Ranslow 01:56
Thanks, Alec. That’s a great question. Let me back up a little bit and explain who NFIB is. We are an association. You know, like many other associations and trade groups in New York State, but our focus is small, independent businesses. We have about 11,000 members across New York state all the way from Buffalo to the tip of Long Island. Our members are the small businesses that everyone thinks about when you hear the word small business. So you walking down your main street, you see dry cleaners, and liquor stores, and barber shops, and then your local landscapers, or small manufacturers, farms, these are NFIB members, those really Main Street, small mom and pop shops, restaurants, florists, anything you can think of as our membership. So we have a very diverse membership. We represent every type of business, you can imagine every sector. So it really does bring an important perspective to Albany in terms of what small businesses are dealing with on a day to day basis. My job is to be their voice. So I walked the halls of Albany to talk to members of the legislature, the governor’s office, agencies, on any sort of proposed rules, regulations, laws, bills, anything being contemplated that might have an impact on the small business community, and I’m there to just share, what would work well, what doesn’t work well, what are the challenges, what are the opportunities, and that’s really my main focus is to be that advocate for small businesses. How do we different from the Business Council? We have a lot of similar priorities. We share a lot of the same perspectives on things. The main difference is the Business Council like us also has a diverse membership, but they represent businesses large and small. We are only representing small independent business. So where you’ll see us diverge on issues and policy matters, is when you get to some of these situations where larger corporations, fortune 500 companies, big box retail, is really stifling small business. And then that’s when you’ll see us diverge on problems. And I’ll give you an example, economic development policy. In New York, we have about $11 billion that we spend, whether it’s the state or localities on economic development policy, unfortunately, what we see is a lot of those economic development dollars flow to major projects, major corporations, you know, anything from Amazon to obviously the new Micron deal that’s getting touted. These are great projects. They certainly are projects that arguably will bring jobs and money to communities, but they don’t benefit small businesses. And that’s where we diverge mostly on policy matters is the state just spends billions upon billions of dollars in economic development, and these are going to major corporations that have a lot of money.
Alec Lewis 04:53
Now let’s talk a little bit more about recent actions by the state the NFIB issued a report highlighting some of the state victories here in 2023, for small businesses, along with continued challenges for New York Small Business Community. Now, one big win that was cited in that report was the expansion of small business tax deductions, from 5% to 15%. For New York states, LLCs, S Corps, partnerships and sole proprietorships. From your perspective, what’s the real practical impact of this expanded tax deduction in New York for small businesses?
Ashley Ranslow 05:25
It’s really important. New York State has one of the highest tax environments in the country, New York is not well known for its positive business environment. There are a lot of challenges on not only the regulation and law side of things, but also from the tax side of things. We were fighting for years and years and years to get a small business to expand the small business tax deduction to essentially just lessen the tax load that’s on small businesses in New York state. So this was a really great victory for us. And very important, is it going to see change in tax policy? No, but it is it does let small businesses keep a little bit more money in their pockets by increasing that tax exemption from five to 15%. And really, just to simplify it for folks, you know, let’s say you have your small LLC, you have up to $100,000 in business income, instead of paying taxes on $95,000, you’re paying taxes on $85,000. So it’s, it’s just saving you a little bit of money, putting a few 100, maybe a few $1,000. Keeping that in your pocket, and it adds up, you know, year after year, if you’re saving a few $1,000. You know, that’s money that you can use to you know, invest in in new technology or invest in new equipment, it just helps lessen the burden that really is dragging down Main Street in terms of the the high tax environment that we all live in.
Alec Lewis 06:56
So let’s transition now to talk about a challenge facing New York small business community. One major issue that the NFIB has been very vocal on is the state’s unemployment insurance debt bill. As background for our listeners, New York State like more than 30 other states borrowed federal funds to pay unemployment benefits following mandated business shutdowns during the COVID pandemic, and the state’s outstanding debt still totals nearly $7 billion. And Ashley, can you please explain the impact of this debt on New York State employers?
Ashley Ranslow 07:28
This debt has a massive impact. It’s really a a triple tax increase. And here’s why. In New York State law, when the way that UI is funded, it’s funded by taxes that employers pay, and they pay it on a per employee basis, and the way that the system is set up, and the way that you the taxes are paid in, you’re paying in based on what the solvency of the fund is, so how healthy it is how much money it has in its trust fund, but you’re also paying on your utilization of that fund. If you’re laying off people, obviously, there’s money flowing out of that fund, so your taxes might be a little bit higher. But really, the crux of it is that the states and debt, as you said, about $7 billion right now. So we, we as in the business community, all businesses, small businesses, large businesses doesn’t matter. Everyone is paying the highest possible state UI tax assessment, because the fund balance is at zero. What does that mean? That means about on average, an extra $250 per employee per year, businesses have been paying this now for three years. So this is really adding up in terms of the total cost impact on businesses. So that’s tax number one, tax number two, the there’s a federal unemployment insurance tax adjustment that’s offered by the federal government, that tax adjustment shifts when your state’s UI trust fund is in debt. It’s essentially like a carrot from the federal government to say, look, if you have a healthy and healthy UI Trust Fund, we’re going to let you keep your offset the way that it is. But if you go into the red, we’re going to start inching up your federal UI taxes to help replenish your trust fund. So in addition to the highest state possible UI taxes, businesses, small businesses are also paying increased federal UI taxes. And then on top of that, here’s the third tax that’s coming in is New York State has to repay this debt has to repay the $7 billion to the federal government, they have to repay it with interest. In New York State law, that interest is passed on to businesses. So the state is not paying that interest. It’s asking or requiring businesses to pay it. So businesses are paying what they call an interest assessment surcharge, which is an extra $21 per employee. And they pay this once a year. Add up all Three of those taxes, you have your increased state UI taxes increased federal UI taxes, plus the interest assessment, it works out to be about another $300 per employee per year. Again, this adds up when you’re doing this year after year. It is really imperative for New York State to address this problem. The longer that this goes on, the more small businesses are having to pay, and it’s really taking a toll on Main Street. And it’s very disappointing for us because back a couple of years ago, when the federal government was providing states with COVID relief funds, many, many states more than 30 used those COVID relief funds to replenish their trust funds to address this crisis that New York State is now in. They said, You know what, we’re going to take billions of dollars, you know, Texas, for example, did 7 billion, Illinois did more than 3 billion. They took that money that they received from the federal government for COVID relief, and they said we’re going to replenish our UI trust funds, we’re going to pay off our debt, and get our trust funds back up and running. So that this burden is not shouldered by small businesses and businesses across our states, New York has not done that New York has not put one single penny towards the UI. And I think that’s what is most distressing about all of this is that small businesses were closed out, you know, these were state public policy decisions. These were mandates from state government to say you cannot operate. And then even after, when we started going through reopening, there were restrictions, businesses went months without making money or making less money. And now the state is saying, Yeah, we understand you put we put you through it, but we’re not going to help you out on UI. And that’s the frustrating point from the Small Business perspectives, if they say, Hey, you know, it wasn’t my choice to shut down my business, you told me I had to. And now you’re expecting me to carry the full load of paying back this debt. So that’s really why we have been working so hard on this issue is that it really comes from a fairness perspective that, look, small businesses did what they had to do, you ask them to shut their businesses down, and keep their people employed. And many of them did that to the extent that they could. And now, it’s almost as if they’re being penalized by having to pay these, these additional three higher taxes. So we really want the state to come to the table and put some money into paying off the debt, and then also covering the interest assessment surcharges to help lessen that tax burden on businesses. And it’s also really important for the state’s economy. I mean, what happens if, if later this year or you know, next year or the year after we do end up in a recession, and you do have layoffs, and people now are going back on the unemployment rolls and collecting from the system, the system’s already in debt. And so now you’re gonna have to borrow more, which is really just going to extend the repayment period and, and the increased taxes on businesses. So it’s, it’s better off for New York to address this problem and address it sooner than later. So that we can provide the relief to small businesses, while also making sure from an economic standpoint that we get our fund back into the black back into the positive. And should a recession be coming down the pipe, ee are prepared for that.
Alec Lewis 13:23
Well, Ashley, I can’t thank you enough for laying out the complexity, but also the opportunity that New York has to address this crisis for small businesses. And really, thank you for laying out the important work you do and your role as New York State Director of the NFIB. And with that I’ll transition to Joanna to close out our program.
Joanna Pasceri 13:40
Thank you so much, Alec and Ashley for that great insight on the financial landscape here in New York for businesses, especially our small businesses, a very important sector in our economy, and we so appreciate all of your efforts supporting our vital business community here in New York. If you’d like more information on the National Federation of Independent Business, please visit their website at nfib.com, nfib.com. And are you receiving our award winning Monday morning memo, Jack’s Weekly Newsletter, on what’s really happening in politics and government? Get it sent right to your inbox? Subscribe on our website at odonnellsolutions.com That’s odonnellsolutions.com. And for daily updates. Follow us on Twitter, LinkedIn threads and Instagram at O’Donnell and Associates. Thanks for listening, everyone. We’ll be back from the lobby with Jack O’Donnell.
