Month: November 2021

Window Closing for NY Scholarship Raffle

If financial planning teaches you anything, it’s that it is never too early to start saving up.

The next generation is bound to face steep higher education costs – just how high? Let’s break down the price projections for kids (currently age 5) who will enroll in college in 13 years. If college costs rise at 5% a year, the annual cost to attend a four-year public state college or university will be $44,136 (up from $23,406 over 13 years). The total cost for 4 years (s) will then be $190,230. That’s a hefty price tag. One new statewide program is offering 50 lucky kids a chance at free full-ride scholarships, but the eligibility rules will disqualify a lot of families from even entering the race.

Educate, Graduate Vaccine Incentive Scholarship is a five-week public outreach campaign, running through December 19, 2021, consisting of a series of statewide drawings to increase awareness of the availability of COVID-19 vaccines and provide incentives for young New Yorkers to get vaccinated.

The scholarship announcement program came as Hochul noted New York was receiving more than 700,000 pediatric doses of the Pfizer-BioNTech COVID-19 vaccine, with plans to soon obtain more doses for the entire 1.5 million New Yorkers in the age group. Hochul also announced that 65% of the more than 700 school districts statewide are planning to host vaccination clinics at or near school buildings for the 5-to-11 age group in the coming weeks. As of November 3, 2021, New York children ages 5 – 11 are eligible for the COVID-19 vaccine. The state launched a new website to help parents and families navigate their frequently asked questions surrounding the vaccine.

So, how does the raffle work?

Parents or legal guardians of any 5 to 11-year-old New Yorker who has received at least their first dose of the COVID-19 vaccine, may enter their child for a chance to win a four-year, full-ride scholarship (including tuition, fees, room-and-board, and expenses) to any two-year or four-year New York State public college or university. All non-winners will be automatically included in subsequent weeks’ lotteries. No entrant may win more than one prize under this program and while it isn’t a requirement for children to have obtained the vaccination within New York State to be eligible, the state does have a validation process in place.

Entries must be received by December 19, 2021, 2021 at 11:59:59 p.m. EDT to be eligible for at least one drawing. The drawings will be conducted weekly, for five (5) weeks. The first drawing will take place in less than a week, on November 22, 2021. Ten winners will be announced weekly beginning Wednesday, November 24, 2021, for five consecutive weeks. A total of 50 prize winners will be selected. Interested applicants must complete entries at governor.ny.gov/nysvaccineincentive.

At RBT, we understand vaccination decisions are extremely personal and that family members and educators in our communities are having important conversations in and outside of the classroom. Our goal is to provide our clients with relevant, timely information regarding financial savings opportunities, and strategic financial planning that impacts the education industry’s technical needs, so you can serve your respective communities to the best of your ability. We are constantly monitoring industry changes and governmental decisions that impact your institutions. Our team of professionals is dedicated to serving you and your colleagues. Questions? Contact us today here. Additionally, if you would like to submit topic ideas for future articles our team produces, please feel free to contact us at TLideas@rbtcpas.com.

Source: Governor.ny.gov

The Latest on NY’s Education Spending

While it’s easy to get wrapped up in daily expenses, it’s a good idea to check in on the Office of the State Comptroller’s monthly contract approval list to understand where funding is headed.

In September, the Office of the State Comptroller approved 1,515 contracts for state agencies and public authorities valued at $2.4 billion and approved nearly 5.4 million payments worth almost $15.4 billion. What is the NY Comptroller’s office approving in terms of education spending?

Included in September’s state payments:

$2.7 billion in general aid to 678 school districts
$360,000 in excess cost aid for school-aged special education students to six school districts

Within the State University Construction Fund, over $65 million was approved for various university renovations that are underway. Specifically:

$28.8 million with FAHS Construction Group Inc. to renovate the Bartle Library 3rd floor and penthouse at Binghamton University
$20.1 million with Manning Squires Hennig Co., Inc. to renovate Crosby Hall at University at Buffalo
$16.3 million with Upstate Companies 1, LLC to renovate Silverman Hall at Upstate Medical University

The State University of New York which spans 64 campuses across the state had a lot to gain with the latest OSC contract list.

As the largest comprehensive system of universities, colleges, and community colleges in the United States, with a total enrollment of over 400,000 students, plus more than 2 million adult education students, a few University projects stood out. In particular, OSC is spending:

$18.4 million with Boilermatic Welding Industries Inc. for boiler maintenance and repair services at Stony Brook University
$5.6 million with Apogee Telecom Inc. for internet access service at the University at Albany
$5.5 million with D2L LTD for an online digital learning environment
$3.9 million with Sunquest Information Systems Inc. for maintenance and support services of Sunquest Laboratory Information Systems at Upstate Medical University
$3 million with Cerner Health Services Inc. for maintenance and support services of Eagle 2000 software at Downstate Health Sciences University
$2.3 million with Southeast Mechanical Corp. for condensate water piping replacement at SUNY New Paltz
$1.7 million with All-Con Contracting Corp. for Campus Center upgrades at SUNY Old Westbury

Additional spending is going towards the Student Conservation Association Inc. for conservation and educational recruitment services ($4 million), and to the NYS Federation of Growers’ & Processors’ Associations Inc. to provide early childhood education and social services under the Agri-Business Child Development Program ($1.7 million). Three of New York’s eight ABCD Centers are actually located within Hudson Valley to serve our Florida, Middletown, and New Paltz, community members.

When your team is planning future budgets and considering future projects, consider checking in on the OSC’s official website to determine what projects are receiving funding.

More information on the latest approved contracts and payments is available at www.openbooknewyork.com but if you have immediate questions about strategic financial planning, our dedicated RBT professionals are here to help. Contact us today, here. Additionally, if you would like to submit feedback or topic ideas for future articles our team produces, please feel free to contact us at TLideas@rbtcpas.com.

Source: OSC, ABCD

New NY Law Cracks Down on Code Enforcement

Local governments that are lax on code enforcement are being put on high alert by New York lawmakers after a stricter building code violation law was approved earlier this month by Gov. Kathy Hochul. What prompted the change, when does it take effect, and what does your municipality need to know? Read on.

Higher fines are on the way for property owners who repeatedly violate building codes and have left them unaddressed. The law sponsored by Assemblyman Ken Zebrowski (D-Rockland) and Senator Rachel May (D-Onondaga, Madison, Oneida) imposes a minimum fine of $25 a day after 180 days of a property being in violation. A minimum violation of a property not being addressed of $50 a day would be imposed after 360 days. The maximum violation remains $1,000 a day as levied by a court.

Currently, any citation issued to a property owner for a violation of the uniform code has a 30 day “cure” period for the property owner to correct the issue before being subject to any fines. After the cure period, the court may levy fines of up to $1,000 per day that the violation continues uncured, however, these fines can technically be as low as a single cent. Lawmakers who backed the bill said the new tougher fine structure is meant to push municipal governments to act faster on properties that are not up to code and have languished for months with token fines put in place.

“Across New York our municipalities are facing a crisis with the housing stock. Our communities are suffering under absentee landlords and fear that landlords will retaliate if they report code violations in their homes. This legislation has the teeth to hold repeat offenders accountable for their bad management practices by denying them access to more properties and implementing increasing fines for failure to fix existing issues in their current properties. Everyone deserves a safe and healthy place to call home,” said Senator May.

On August 5, 2019, the Committees on Investigations and Government Operations and Housing, Construction, and Community Development released a report on code enforcement in New York State and the findings were less than impressive. The investigation concluded the lack of prioritization of code enforcement in municipalities across the State is significantly contributing to the culture of poor compliance that ultimately endangers the lives of residents and first responders. The report found that all municipalities investigated failed to impose meaningful penalties to deter code violations and that owners view the fines imposed as the cost of doing business.

“It is well past time for the culture of ‘build now, ask for forgiveness later’ to end. Whether it’s in Rockland or across New York State, this attitude is putting the lives of residents and first responders at risk. Continually violating the building code is reckless and property owners must be held accountable. Ensuring there are repercussions to these unscrupulous property owners does just that,” said Assemblyman Zebrowski.

The law takes effect March 3, 2022, so don’t delay to ensure your team is up to speed and has a plan in place to better serve your community. If you have questions regarding this new law or about creating a safety plan to ensure your team is doing everything in its power to monitor code enforcement swiftly and efficiently, we can help. Contact our dedicated Government group at RBT to schedule a consultation today. Additionally, if you would like to submit feedback or topic ideas for future articles our team produces, please feel free to contact us at TLideas@rbtcpas.com.

Sources: Kenneth Zebrowski, Spectrum

New Joint Employer Rules You Need to Know

No one ever said being a contractor would be easy. Rewarding? Yes. A breeze? Far from it. Consider all of the parties involved in any given project: developers, investors, lenders, insurance carriers, architects, engineers, consultants, subcontractors, suppliers, and manufacturers. There is a lot that can go wrong, and there is a lot to worry about. Unfortunately, to add to your list of concerns, New York’s state legislature recently passed a bill that will make general contractors jointly responsible for wage theft violations committed by subcontractors. The good news? Being aware and being prepared can save you a major (and expensive) headache, down the road.

New York Senate Bill S2766C was signed into law this September by Governor Hochul and will become effective January 4, 2022. Before this law, a general contractor would not be responsible for its subcontractor’s wage practices or liability to their employees unless it was found to be a “joint” employer, which, under applicable case law, is a difficult burden to meet. Now, contractors face strict liability for claims associated with the subcontractor’s payroll practices, and it applies to all levels of subcontractors. The limitation period for claims against the general contractor will be three years, while the general limitation for wage claims is six years, which means an individual or representative could file a lawsuit against the general contractor as well as the employer-subcontractor.

This new wage law also adds a section to the New York General Business Law which authorizes construction contractors to withhold payments owed to subcontractors who fail to pay their construction workers or who fail to comply with the law or requests by contractors for payroll information and records required by the law (i.e., certified payroll records and other records regarding names of employees, payments of wages and benefits and dates of work). This provision will allow general contractors to impose significant contract, audit, payment, and indemnity provisions on subcontractors in an attempt to manage and limit their liability for subcontractor wage claims.

The National Labor Relations Board (NLRB) issued its own final rule on the standard for determining joint-employer status under the National Labor Relations Act (NLRA), which you need to be cognizant of, too. To read the full fact sheet and gain a better understanding of your employment circumstances, click here.

Also on a national scale, the U.S. Department of Labor recently rescinded the joint employer rule which was significantly narrowed during the Trump Administration – all the more reason for New York construction companies to be on high alert and identify whether or not they are considered joint employers. The DOL announced on September 20 that its rescission of the prior administration’s joint employer rule would take effect on October 5. Now that the DOL has decided to rescind the four-part test that determined whether a business is equally liable for obligations under the Fair Labor Standards Act (FLSA), it will go back to the original pre-2020 rules.

The importance of the “joint employer” doctrine impacts:

independent contractor relationships
regulation of the contractor’s access to the property and hours of work
control of manner and methods of performance of contractors
monitoring of quality and quantity of work performed
“costs plus” pricing arrangements
use of temporary staffing or referral companies
franchise relationships
insurance companies that require employers to take certain actions with their employees to comply with policy requirements for safety, security, and health
banks or other lenders whose financing terms may require certain performance measurements

Ultimately to run a successful business and to mitigate liability, you need to have certainty in the way you structure your business relationships. The key to the updated DOL rule for contractors is that they reserve the right to control— directly or indirectly — one or more of these factors to be considered a joint employer, not necessarily exercise the control. The bottom line? Work with HR personnel or employment counsel to closely monitor whether or not you have joint-employer relationships by examining the multifactor test to minimize overall liability under the fair labor standards act as well as the national labor relations act. In terms of what you can anticipate from the new DOL in the near future, you can look back to a January 2016 interpretation – “Joint employment under the Fair Labor Standards Act and Migrant and Seasonal Agricultural Worker Protection Act” – for an idea of what the future may hold.

How to Fix the Healthcare Trust Problem

With December just one calendar page turn away, it’s a good time to consider ways your organization excelled this year, as well as areas your team fell short of. Reflecting on the past year, healthcare workers across the state were tested beyond limits and proved that this industry is more resilient than any of us could have imagined. Just like at RBT, the people you hire to be a part of your team are truly the lifeblood of your organization – they are what make your operation remarkable. But while the threat of the COVID-19 pandemic may finally be waning, other threats are lurking. With escalating cyberattacks on hospitals and health systems and the continued spread of health misinformation online, the healthcare industry is headed for an exit from the “trusted category” next year, according to a recent Forrester report. Why is distrust eroding the healthcare industry and what can your team do to protect your brand as we enter 2022?

Forrester examined the state of healthcare in the U.S. and how threats like misinformation and increasing cyberattacks will affect public trust for its Predictions 2022: Healthcare report. Misinformation has permeated social media and even platforms built for clinicians, and the true industry cost just might be immeasurable. The spread of false health information, shortcomings in data integrity, and the politicization of science will unseat healthcare from its standing as a trusted industry according to Forrester’s 2022 projections. Continued erosion of trust in healthcare institutions will force more clinics to close and threaten population health as patients avoid treatment for their conditions.

As far as cybersecurity is concerned, the report indicates that healthcare is the most attacked industry and has the highest average cost of a data breach as well as the slowest incident response time. Cybersecurity investment initiatives are expected to hit $125 billion between 2021-25 in response to the increasing number of threat actors and weak digital systems.

What can your team do today, to stay protected? The financial risk and the health of your patients are at stake if you don’t have full control over the information being shared with the public. Righting the ship in 2022 will require an all-hands-on-deck approach, including coordination between those working in public health research and practice, public policy, and cybersecurity. Ensuring you have a reliable communications department is key to getting your patients access to accurate, reliable information about your organization. Think about your social media strategy. When was the last time you updated the way you connect with clients? On the cybersecurity front, make sure you reassess your 2021 defense plan and determine whether or not your team is doing enough to protect your data. Ensure that everyone on your staff is up to speed on the plan. Simple team-wide reminders, like creating complex, unique passwords with frequent updates, encrypting patient data and medical files to avoid data leaks in ransomware, and using a VPN for a safe internet connection can help to avoid outside risks. Like misinformation, cybersecurity awareness and education will help your team recognize problems before they evolve into crises. As always, we are rooting for your success. Our trusted team of healthcare specializing RBT professionals are here for you, to navigate the diverse and complex world of healthcare. If you would like to submit feedback or topic ideas for future articles our team produces, please feel free to TLideas@rbtcpas.com.

Source: Forrester

Follow these Tracking Tips to Cut Costs Today

If you’re like most manufacturers, you don’t track order processing. Yet focusing on this performance metric can identify operational inefficiencies that are cost-cutting opportunities. Another major advantage? Continued monitoring lets you keep those costs in check and predict future outlays. If you haven’t already, your company needs to develop a blueprint that delineates the tasks to be measured.

Tracking begins with a specialized enterprise resource planning (ERP) system or online workflow management program that can capture the workflow transactions involved in order processing. This is done in much the same way as you’d measure non-linear workflow in the production setting. As orders move from one person or terminal to another, they are automatically time-stamped and the number of times an order “changes hands” is recorded. Consider using a system that manages data about customer buying behaviors along with tracking order processing to create customer profiles and order histories. This will enable you to develop sales strategies based on demand and forecast opportunities to cross-sell and up-sell.

While computer programs are essential for gathering data, analyzing complex processes, and providing routine monitoring, don’t overlook the human element. Make order-processing improvements a priority, and charge a team of stakeholders with streamlining the process. The visibility that tracking brings to order processing reveals costly patterns that provide a basis for planning and scheduling. Furthermore, in discussions of order processing, tracking offers objective data that puts everyone on the same page. An analysis of the workflow metrics is handled by a business intelligence program that gives a non-IT person, such as a COO, the ability to “slice and dice” the data into a meaningful report. As the system gathers data over time, you’ll have a performance and cost record that can be used to analyze and fix inefficiencies. This ongoing analysis becomes an important tool for continuous improvement and forecasting.

You can learn a great deal about your operation when you know the steps involved in entering a new order. How many departments and individuals handle the order? How many pieces of paper change hands? What happens when an order changes? This lets you determine where bottlenecks exist and what transactions need to be changed, eliminated, or added.

Customer order management means different things to different people. It may be limited to account processing and the activities involved in the entry, maintenance, and fulfillment of orders. Some of the tasks include pricing, managing customer credit, checking parts availability, inquiring about order status, invoicing, and processing accounts receivable. In other words, customer order management includes every process from order to payment receipt. Our Manufacturing Services Group works with businesses in diverse industries from building materials, to food processing, specialty sporting goods, commercial lighting, health, beauty, pharmaceuticals, and more. Whatever the size of your venture, we can help you meet your goals, now and in the future. Contact our RBT team of professionals for more details about how a cost segregation study could improve your situation. Additionally, if you would like to submit feedback or topic ideas for future articles our team produces, please feel free to contact us at TLideas@rbtcpas.com.

The Not-So-Secret Tax Savings Tool You Need to Know About

Normally, it takes almost four decades to fully recover the cost of commercial property through depreciation deductions – and as you know, time is money.

As a manufacturing company owner, you may own the building, or several buildings, where your goods are produced. Luckily, there’s a worthwhile alternative that can help you claim much faster write-offs. Let’s dive into the incredible savings that your future can hold if you opt to commission a cost segregation study.

How Does Cost Segregation Work, Anyway?

A cost segregation study allows a business to recoup its investment in qualified property faster than usual by identifying various building components that may be classified as personal property or land improvements, which are subject to shorter write-off periods. For instance, some property may be classified as five-year, seven-year, or 15-year property eligible for accelerated depreciation methods. Land improvements are depreciated over 15 years using the 150% declining balance method.

Manufacturers that acquire a building may benefit from three depreciation-related tax breaks for building components identified in a cost segregation study including a Section 179 deduction, a first-year bonus depreciation deduction, and a MACRS deduction.

As a general rule, “personal property” is defined in IRS regulations as tangible depreciable property (other than buildings and their structural components) used in certain industries, such as manufacturing, as well as several other specialized types of property.

Notably, manufacturers often benefit from identifying equipment foundations, exhaust and ventilation systems, and security systems as tangible personal property. Costs of landscaping, underground utilities, and site lighting may be written off as land improvements.

How Much Savings Are We Talking?

Depending on your circumstances, about 20% to 40% of the eligible costs of a light manufacturing facility may constitute tangible property and land improvements. The benefits may be even greater for a heavy manufacturing company. It’s common for 30% to 60% of the eligible costs of a heavy manufacturer to be reclassified to tangible property and land improvements.

Let’s review a potential scenario. For example, if you buy a building for $5 million in 2021, the annual straight-line depreciation deduction would be about $128,205 ($5 million divided by 39 years). However, let’s say your CPA performs a cost segregation study and determines that you can reclassify $1 million of the cost (20% of $5 million) as property that can be depreciated over seven years. You decide to take advantage of the deduction and bonus depreciation rules that allow you to immediately deduct the cost of those components in the tax year it was placed in service. So, you can deduct $1 million plus $102,564 on the remaining $4 million of cost ($4 million divided by 39 years).

What’s Right for Your Business?

The best time to perform a cost segregation study is the tax year that your company buys the building, but a cost segregation study can be commissioned any time after the acquisition, renovation, or construction of the facility. How much could your business save by performing a cost segregation study? And which tax breaks will save you the most over the long run? Our Manufacturing Services Group works with businesses in diverse industries including building materials, food processing, specialty sporting goods, commercial lighting, health, beauty, pharmaceuticals, and more. Whatever the size of your venture, we can help you meet your goals, now and in the future. Contact our RBT team of professionals for more details about how a cost segregation study could improve your situation.

How to Save Big with Construction Management Software

Running a successful construction company requires a lot of hard work, organization, and coordination. Your team is relying on you to communicate plans, your client is relying on you to communicate issues that may arise, and you are juggling multiple schedules, budgets, timelines, (personalities…), and maintaining a safe work environment. Before we head into the new year, it’s important to reevaluate your current workflow and determine how effectively your team is working. Remember, inefficient project management equals lost revenue.

What’s the real value of construction project management software?

A new market study published by market research company Global Industry Analysts Inc. (GIA), released its report to summarize the global market outlook for the next few years. The report presents fresh perspectives on opportunities and challenges in a significantly transformed post COVID-19 marketplace. The global market for Construction Management Software estimated at $1.4 Billion in the year 2020, is projected to reach a revised size of $2.9 Billion by 2026. The U.S. market is estimated at $426 million in 2021, while China is forecast to reach $625.2 million by 2026.

What can construction project management software accomplish for your company?

Construction project management software is collaborative technology that allows the parties involved in a construction project to find, share, and update information related to the project. Common functions of these tools handle various aspects of the project such as scheduling, contract and permit management, quality assurance, and safety. While selecting a specific program is extremely personal and preferential depending on your business strengths and weaknesses, we want to mention ten of the key features that most construction project management software will include, as outlined by the research team at Construction Coverage where you can also find a list of their top 2021 software picks.

Document Storage & Management
Submittals
RFIs
Change Orders
Instant & Remote Syncing:
Daily Logs
Digital Plan Markup
Punch Lists
Reporting
Integrations

What are examples of how you can save big with construction project management software?

Save on employee wages by getting teammates up to speed faster than traditional methods
Stop wasting money searching for project files or documents with software that keeps everything organized and easy to find quickly
Cut traditional training costs by allowing new employees to understand your workflow through the software, instead of lengthy one-on-one employee training sessions
Fewer mistakes equal more savings! Integrating management software will eliminate costly human errors that waste time and money for your company

Many construction management tools take care of documents exchange between the contractor and the owner, their subcontractors, suppliers, or other involved parties with storage and collaboration capabilities for project plans, subcontractor contracts, receipts, and other important documents. Taking advantage of this technology can streamline your daily operation, allowing your team to have access to organized reports that summarize things like project progress, budget, and spending information. Additionally in the increasingly remote-heavy working world, working offsite won’t be a problem with cloud-based products. At a time when you and your team need to access information instantly, this software is a game-changer. Do you want to make sure you are operating at peak financial efficiency? Our professional RBT team that specializes in construction clients is here to help, contact us today.

Sources: Yahoo Finance, Construction Coverage

Need to Know: DOL Cybersecurity Guidance

Cyber-attacks are on the rise.

As you’re aware, plan sponsors, administrators, and service providers maintain electronic information that can be extremely vulnerable to cyber-attacks, including personally identifiable information (PII), participant enrollment data, and of course, electronically protected health information (EPHI). Responsible plan fiduciaries must safeguard against cybersecurity risks, but not everyone is prepared. This year, The Department of Labor (DOL) issued a new cybersecurity guidance package and has already begun including this in its enforcement efforts. Ask yourself this important question: does your team have internal cybersecurity policies that already meet updated standards? If not, it’s time to draft new policies or risk falling behind and falling victim to an attack.

What prompted this action?

Earlier this year, the Government Accountability Office (GAO) released cybersecurity issues and risk findings. The GAO issued an urgent recommendation that the DOL affirmatively state whether cybersecurity is a fiduciary obligation and provide guidance for plan sponsors and service providers regarding mitigation of this cybersecurity risk. In response, the DOL issued a three-part cybersecurity guidance package containing:

Best Practices.

The first document, Cybersecurity Program Best Practices supports information technology security protocols for Employee Retirement Income Security Act (ERISA)-covered benefit plans. The memo outlines 12 points for cybersecurity risk mitigation, including conducting cybersecurity risk assessments on at least an annual basis and conducting third-party audits of system security controls. In regards to conducting a third-party audit, EBSA indicated that if it were to review an audit program it would expect to see evidence of audit reports, penetration test reports, and documented corrections of any identified weaknesses. The document also calls for a plan sponsor’s cybersecurity program to be managed at the executive level, and annual cybersecurity awareness training. EBSA further instructs plan sponsors and fiduciaries to utilize a secure system development life cycle program (SDLC) to ensure that new systems are designed to prioritize cybersecurity considerations. For example, EBSA suggests certain events (like when a participant wants to change their account information) should automatically trigger two-factor authentication or other additional protocols.

Tips for Hiring Service Providers.

The second document, Tips for Hiring a Service Provider With Strong Cybersecurity Practices, is aimed at helping plan sponsors and fiduciaries protect their cybersecurity interests when working with a third party. In this guidance, EBSA lists six core points that plan sponsors and fiduciaries should follow in order to meet their responsibilities under ERISA. EBSA suggests asking potential service providers whether they have cybersecurity insurance coverage and reviewing public information regarding the provider’s cybersecurity track record and potential liabilities. Entering into a new contract? Time to read the fine print. Plan sponsors should carefully review the contract, ensuring it includes protections addressing access control policies, encryption policies, and a cyber threat notification procedure. Finally, EBSA recommends that service provider contracts include a clause requiring ongoing compliance with evolving cybersecurity information and standards.

A Model Notice offering Cybersecurity for Participants.

The third piece of guidance, Online Security Tips, is directed at participants and provides a list of best practices to reduce the risk of fraud and cybersecurity threats to retirement accounts. This guidance provides best practices for maintaining a secure online presence, such as using multi-factor authentication where possible, changing passwords regularly, and avoiding public Wi-Fi.

Since releasing this guidance, the DOL began ramping up its cybersecurity audit protocols by contacting plan sponsors and fiduciaries and inquiring as to their cybersecurity practices.

This means it’s a good idea to be prepared to produce cybersecurity and data privacy policies, information, and documentation related to past incidents, and risk assessment reports. Whether or not it’s been a priority in the past, cybersecurity considerations should become part of your regular administrative process. Please note that this DOL guidance likely applies to all plans governed by ERISA, not just retirement plans. To stay protected and prepared, a cybersecurity review should also be performed for ERISA-covered health and welfare plans. If you have any questions about the new guidance, please reach out to our team of dedicated professionals.

Source: DOL, GAO, Benefits Pro, Security Magazine

Local Sales Tax Collections Up 20% in Third Quarter

The height of the COVID-19 pandemic spelled financial disaster for communities across the country. I’m sure you remember feeling the panic that set in, as local leaders grappled with prioritizing public safety amidst an unprecedented health crisis while simultaneously dealing with an economic nosedive. Just how bad did it get, and what stage of recovery is our state in today? Read on to get a recap of where we’ve been, how the rebound looks, and what’s ahead for our communities.

Local governments depend heavily on sales taxes as a major source of revenue, but as New Yorkers stayed home and bought less during the pandemic it created significant shortfalls within communities and collectively statewide. New York sales tax collections dropped by $1.8 billion or 10% in 2020 compared to 2019, State Comptroller Tom DiNapoli said in a report released in February 2021. For perspective, that’s a steeper drop than in the 2009 recession, when collections dropped 6%. Sales tax revenue dropped most sharply in the second quarter as former Gov. Andrew Cuomo closed nonessential businesses statewide. Collections plummeted 27.1% from April to June compared to the previous year. Drops in sales tax collection in New York City, which represents over 40% of sales tax collections statewide, fueled much of the state’s losses. The city saw a 35% drop from April to June, then a roughly 20% dip for the rest of the year.

While the pandemic isn’t over, things are finally starting to look up. Now, nearly two years later, local sales tax collections continue to show year-over-year growth after significant drops. Local sales tax collections totaled $5.2 billion in the third quarter (July-September of 2021), up $861 million (20%) from the same period last year and continuing the trend of exceeding pre-pandemic levels, according to a State Comptroller report released on October 28, 2021. Statewide, every region saw solid growth in sales tax collections during the third quarter compared to the same period last year. Outside of New York City, the July-September period marked the fifth quarter in a row that county and city sales tax receipts met or exceeded 2019 pre-pandemic levels for the same period. Some of the regions with the strongest third-quarter growth include Mid-Hudson (16.5%), Long Island (16.3%), and the Capital District (15.4%).

State property tax is telling a different story, and according to the latest data from the State Comptroller’s office, the New York City office market will take years to recover from the pandemic, with over $850 million in property taxes lost in the 2022 fiscal year. The traditional commercial property value is shifting dramatically, and I’m sure you’ve felt this crunch in your own community. The pandemic meant innovating and embracing remote working models, and the reality is while companies may have anticipated these alternative setups as temporary fixes, the majority of Americans have no interest in going back to the “old model” of work in an office building. According to a recent survey by FlexJobs, 65% of remote workers do not want to return to their offices, and many employers are continuing to use a remote work arrangement. Additionally, an employee working from home in a state where the employer is not headquartered creates several issues that we will likely be working out for years to come.

Overall, strength in statewide local collections likely reflects national changes. The U.S. Census Bureau’s advance monthly retail trade report shows strong year-over-year growth for the third quarter, especially in sectors such as gas stations (38%), clothing stores (35%), and restaurants and bars (34%). Increased costs for goods also increase sales tax collections, and the price of consumer goods and services during this third quarter grew by 5.3% over the same period last year, as measured by the Consumer Price Index. Looking ahead, local governments need to continue closely monitoring the overall employment and real estate markets, including differences in submarkets. By tracking what’s going on in your community, you can deliberate carefully over strategic choices to influence office employment and space and ensure that policy decisions will alleviate negative impacts on tax revenue and the economy. It’s also important for local governments to closely monitor changes as supply chain shortages and workforce disruptions continue to be huge factors in economic recovery. Want to consult one of our RBT government team professionals? Contact us today.

Sources: OSC, AP News