Month: June 2023

SECURE 2.0: Form 5500 Updates

Earlier this year, the Department of Labor (DOL), Internal Revenue Service (IRS) and Pension Benefit Guaranty Corporation (PBGC) issued final rules on Form 5500 and Form 5500 Short Form (SF) changes starting for 2023 retirement plan year reports. Changes are part of the final phase of Setting Every Community Up for Retirement Enforcement Act (SECURE Act). Plans that operate on a calendar year will begin using the new reports in July of 2024.

The SECURE Act was signed into law in 2019 to help more Americans save for retirement. On December 29, 2022, SECURE 2.0 was signed into law with promises of adding tens of billions of dollars to retirement savings and offering new retirement plan features over the next decade.

As noted in an RBT CPAs Thought Leadership Article, SECURE 2.0 has almost 100 different provisions phasing in between 2023 and 2033 to give employers and employees new opportunities to build retirement (and emergency) savings. “From plan rules and administration to tax credits and startup costs, SECURE 2.0 will result in a broad swath of changes for a variety of plans – including 529 plans, IRAs, 401(k)s, 401(b)s, SIMPLE plans, pension plans, employee stock ownership plans, and more. In general, small employers, non-profit organizations, and government agencies will have the opportunity to participate in plans previously available to large for-profit employers only.”

One of the changes impacts Form 5500 filings starting with the 2023 plan year. As explained on a DOL Fact Sheet related to the changes, ERISA and the IRC require covered employee benefit plans to file annual returns/reports about plans’ financial condition and operations. Form 5500 (or Form 5500 SF for small employee plans), along with required schedules and attachments, satisfies this requirement. The DOL, IRS, and PBGC use these reports for enforcement, compliance, and research. Plan participants, beneficiaries, and the public can refer to Form 5500 filings to monitor plan operations.

According to a DOL press release, key changes to annual reports will include a consolidated Form 5500 for certain defined contribution plans; an updated participant-counting methodology for plans with fewer than 100 participants; a breakout of administrative expenses paid by a plan on its financial statements; financial and funding reporting improvements by defined benefit plans covered by the PBGC; new IRC compliance questions for tax-qualified retirement plans; and technical and conforming changes as part of annual rollover forms and instructions.

Details about the Form 5500 changes, as well as changes to 403(b) multiple employer plans – including pooled employer plans, minimum required distributions, and audit requirements for certain plans – are contained in the Federal Register notices, Document #2023-02653 and Document #2023-02652.

The DOL Fact Sheet also states, “Per EFAST2’s normal annual schedule, the 2023 Form 5500 series of forms and instructions are scheduled to be released for filing as part of the EFAST2 electronic filing system on January 1, 2024. For questions about the final rule, contact EBSA’s Office of Regulations and Interpretations at 202-693-8500.”

For more information, visit the IRS’ Form 5500 Corner. For a timeline of Secure 2.0 changes through 2026, visit the American Society of Pension Professionals & Actuaries website. RBT affiliate, Spectrum Pension and Compensation, is also available to consult with you about retirement plans for yourself and/or your employees.

As always, RBT CPA professionals are also available to support all of your accounting, tax, audit, and business advisory needs, so you can focus on other aspects of your business – like your total rewards program, including opportunities to build income for retirement. To learn more about what we can do to help you succeed, give us a call today.

RBT CPAs do not outsource work to another country. All of our work is prepared in the United States. Also, RBT CPAs is an accounting firm – not a law firm. Should you need legal advice on your employee benefits, please consult the appropriate legal counsel.

Will Three-Year Bachelor’s Degrees Catch on in the U.S.?

Has the time arrived for three-year bachelor’s degrees to become the status quo in the U.S.? About 50 years ago, the idea was raised. Other than a short reprisal in the early 2000s, the three-year-degree concept never gained much momentum, until recently.

In April of this year, InsideHigherEd.com reported, “Representatives from a dozen colleges met at Georgetown University to discuss three-year bachelor’s degree pilot programs” as a potential solution to improve student outcomes while addressing costs. (Moody, Josh. “The Push for a Three-Year Bachelor’s Degree.” April 7, 2023. InsideHigherEd.com.)

Prompted by several headwinds – from a growing perception that you can earn a good standard of living without college, serious hesitancy about taking on debt to go to college, a 40% dropout rate, and a potential six-year completion timeline – the pool of applicants looking to pursue higher education in the U.S. is shrinking.

While three-year degrees are the status quo in the U.K. and much of the European Union, the U.S. has been slow to jump on the bandwagon. In truth, it didn’t need to, with enrollment steadily increasing for decades, even among students from outside the U.S. Now that the tides have turned, it seems like a growing number of educational institutions are open for discussing the three-year degree.

Originally, three-year degree programs simply accelerated the timeline for completing 120 credits. Today’s discussions are going further, by looking at whether the number of credits for a degree should be reduced to 90 or 100; whether 30 hours of electives should be eliminated; whether a three-year degree program should be offered alongside a four-year program; and more.

One school is looking at offering three 30-credit certificate programs that can be accumulated to add up to a bachelor’s degree. As revealed by HecchingerReport.com, NewU – a startup in downtown D.C. – is offering the three-year degree at a locked-in rate. Still, others are considering offering a bachelor’s plus a master’s in four years for certain programs.

Schools represented at the Georgetown University gathering referenced earlier are from different geographies, represent a mix of public and private institutions, and have different goals. Some are just beginning to look at the idea while others are ready to launch, pending accrediting body approval, which isn’t guaranteed. (For example, the New England Commission of Higher Education denied New England College’s proposal to offer a 100-credit criminal justice degree.)

Even if approval is attained, some – like those in California and Pennsylvania – face an additional hurdle: state law requires 120 credit hours for a bachelor’s degree. (That doesn’t even begin to address what happens to master’s programs that require a four-year undergraduate degree for entry.)

Still, HecchingerReport.org reports, “Already, a surprising 12 percent of full-time private and 10 percent of full-time public university and college students are finishing four-year degrees within three years, according to the National Student Clearinghouse Research Center.”

As you and your team explore opportunities to maintain/increase enrollment and income, we want you to know RBT CPAs are here to handle all of your accounting, tax, audit, and advisory needs. To learn more about what we can do to help you succeed, give us a call today.

RBT CPAs do not outsource work to another country. All of our work is prepared in the United States.

Know Your Limits: Income & HOTMA Final Rule

On May 15, 2023, new income limits – which are used to define low-income status and eligibility for many HUD housing assistance programs – took effect. Limits are based on the 2021 American Community Survey (ACS), since the 2020 collection data did not meet the Census Bureau’s Statistical Data Quality Standards largely due to the impacts of COVID. This resulted in the release of the new income limits six weeks later than usual.

To see the income limits for New York, click here. For Multifamily Tax Subsidy Projects (MTSP) Income limits, click here. For HOME Income limits (which take effect June 15, not May 15), click here.

A BETA test version of the Novogradac Rent & Income Limit Calculator© is available for “the use of housing professionals who have an understanding of income and rent limits and the program requirements for each program.”

In addition, on February 14 of this year, the final rule for the Housing Opportunity through Modernization Act of 2016 (HOTMA) provisions 102, 103 and 104 was issued. As noted by the National Low Income Housing Coalition, changes to:

Section 102 affect how assisted households’ income and assets are calculated for them to gain admission to and remain in assisted housing.
Section 103 incorporate a new rule for public housing households whose income exceeds the maximum allowed (a.k.a. over-income provisions). Additional guidance was issued in March.
Section 104 provide guidance on recertifying a household’s income.

Changes affect those assisted through Public Housing, House Choice Voucher, Section 8 Project-Based Rental Assistance, Section 102 Supporting Housing for the Elderly, Section 811 Supportive Housing for Persons with Disabilities, HOME Investment Partnerships (HOME), and Housing Trust Fund programs.

Mark your calendar with these important dates related to the final rule:

March 16, 2023 Over-income provisions in Section 103 for PHAs administering the Public Housing program took effect.
June 14, 2023 PHAs must implement over-income requirements and policies. (See the Section 103 Fact Sheet for more information.)
January 1, 2024 PHAs must implement the income and asset changes in Sections 102 and 104.

For additional resources, including recorded training webinars, visit the U.S. Department of Housing and Urban Development HOTMA Resources webpage.

While you’re getting acquainted with the new income limits and HOTMA final rule, RBT CPAs can help lighten your load by partnering with you on your accounting, tax, audit, and advisory requirements. We’re a leading CPA firm in the Hudson Valley and believe we succeed when we help our clients succeed. Plus, you can be 100% confident that your confidential data is only being handled by our local employees – we don’t outsource or offshore. To learn more, give us a call.

Important Note: RBT CPAs is not a law firm. Should you need legal guidance on income limits or the HOTMA Final Rule, it’s best to consult your legal resources.

Veterinary Practice 2.0: Creating a Happier & Healthier Workplace

While working hard to keep your animal clients healthy and their owners happy, remember, there’s one more contingent you need to take care of – you and your team.

The toll the veterinary industry is taking on providers is shocking. Suicide, mental health issues, established practitioners walking away from the field, not to mention a talent gap that’s going to keep growing over the next decade. While veterinary school enrollment increased 4.7% between 2021 and 2022, it’s still down down over 9% when compared to pre-Covid enrollments (Boatright, Kate. “The Next Generation of Veterinarians.” October 10, 2022. Todaysveterinarypractice.com.). There is one good thing to come out of all of this – a growing recognition that things have to change.

As reported on Veterinary Integration Solutions.com, “Veterinary organizations must prioritize a healthy workplace culture now more than ever. With so many industry professionals succumbing to burnout and exhaustion, clinics and hospitals that fail to focus on the wellbeing of their workforce will quickly collapse. Defining and implementing a positive workplace culture must take precedence in every veterinary group.” (Zak, Ivan. “Defining and Implementing Workplace Culture in Veterinary Groups.” July 6, 2021. Veterinary Integration Solutions.)

Here are some considerations to help get you started on defining, creating, and maintaining a workplace that promotes the health of everyone – from clients and their owners to you and your staff:

Examine your practice’s culture.

With so many competing demands each day, it can be hard to fathom taking time to define something abstract like workplace culture, but this investment can mean the difference between running a practice that goes through the motions just to keep up and creating a work environment that energizes, engages, and rewards all your constituents. Taking time to define why your practice exists (mission), what it strives to achieve (purpose), your long-term goal (vision), and how work gets done (values) helps guide day to day operations, decision-making, prioritizing, and more. Perhaps most important, these culture drivers help set boundaries and define where to put energy, giving focus and instilling calm to what can otherwise be an overwhelming and chaotic environment.

Find the right people for your team.

While the workforce shortage can easily lead to rash hiring decisions, having the right people who align with the culture you are trying to create and maintain is critical. Just one person who doesn’t fit can turn what could be a healthy, professional environment on its head. So even though it may be tempting to rush through the hiring process once the decision is made to grow your team, take the time you need to ensure a good fit for your practice, team, and future.

Be thoughtful about compensation and benefits.

With so much competition for talent, your total rewards package should show the value you place on staff, incentivize key behaviors to success, satisfy employee priorities, and align with your company’s values. While fair pay and sign-on bonuses are table stakes (that should be based on competitive practices for your geography), up and coming generations of workers give equal weighting to work life balance – one of the biggest keys to promote a healthy work environment. Practices are exploring and offering three- and four-day work weeks; flex hours; adopting no weekend work policies; offering generous time off packages; and more. If you’re concerned about how new policies may impact your practice, conduct pilot programs so you can understand implications before making something permanent. Perhaps most important: be sure to lead by example. When employees see you taking the time to unplug and recharge, they’ll know it’s okay for them to do the same.

Communicate, communicate, communicate.

While putting a lot of time and energy into marketing and customer communications, remember to do the same with your team. Weekly group meetings keep everyone moving in the same direction with a clear understanding of expectations and priorities. One-on-one discussions show each person on your team that they matter and help you understand their priorities and needs (i.e., learning, development, growth opportunities, etc.) so you can make adjustments accordingly. When done consistently, communication helps build trust, shows you care, and reinforces that your employees matter and their input makes a difference.

Evaluate and update how work gets done and who does it.

Are there opportunities to lighten workloads with new technologies? Can responsibilities be shifted to foster better teamwork and more equitably share the work? Is it time to add more staff or new roles to your practice? Should work processes be evaluated to eliminate non-value-added activities while boosting productivity? Do you need to add time and opportunities for staff to recharge throughout the day?

Seek feedback.

Taking a pulse every once and a while to make sure you’re on track to create the type of workplace you always imagined can provide you with valuable insights on what’s working and should continue, and opportunities for improvement. Embed regular temperature checks into your ongoing communication processes. This includes exit interviews, where departing employees may feel more comfortable sharing opportunities to improve.

Perhaps most importantly – ask for help when you need it.

For example, did you know RBT CPAs can be a trusted partner to help with many aspects of your business – from bookkeeping and acting as a virtual CFO to providing business advisory services, Human Resources support (via our Visions HR affiliate), and, of course, by providing accounting, tax, and audit services? We invest a lot of time in getting to know and understand the veterinary industry, so we’re in the best position to add value and promote success.

Watch for more thought leadership articles in the months ahead for deeper insights into building a happy and healthy veterinary business. If you’re ready to get started on doing more today, give us a call today – we’d love to have the opportunity to discuss what we can do to help you run a happier, healthier, and more successful practice.

All work performed at RBT CPAs is made in America by local, full-time staff and team members. We never outsource or offshore, so you always know who is handling your confidential data.

Proposed Alcoholic Beverage Control Law Changes: What’s Next?

Last week, the NYS legislative session ended with no news on updates to the state’s Alcoholic Beverage Control (ABC) Law.

A Commission to Study Reform of the ABC Law was created by Governor Hochul in 2022. Its 21 members were from the Department of Taxation and Finance, Division of the Budget, Empire State Development, NYS Police, and the alcoholic beverage market throughout the state. They were charged with reviewing and identifying opportunities to modernize the law, which was adopted in 1934 and studied for updates in 1963, 2007/2008, and 2015, but saw little change.

At the start of May, the commission released a 192-page report containing 28 proposed changes, with recommendations to move ahead with 18 of them. Starting on page 23 of the report, there’s a summary of the recommendations that the commission agreed should move ahead:

Amend Section 100-b to allow applications to be submitted simultaneous with municipal notice.
Amend Section 97-a to eliminate the requirement of licensure within 2 years for New York City/500 foot temporary permit applications.
Amend Section 99-d to allow corporate changes to take effect prior to application for approval.
Ensure the State Liquor Authority (SLA) is properly funded.
Amend Section 63 to allow additional items to be sold in liquor/wine stores.
Allow on premise retailers to purchase from off premises retailers in a limited fashion. (So, if a bar or restaurant runs out of a certain type of alcohol during business hours it can buy up to a certain number of bottles from a retailer – something that’s not currently allowed.)
Allow an individual to own more than one liquor store in NYS up to a certain limit.
Amend Section 105 to allow off-premises liquor stores to start selling at 10 a.m. on Sundays.
No changes to on-premises hours.
Allow issuance of All Night Permits on Saturdays and Sundays.
Loosen the Tied House Laws.
Eliminate the 500 Foot Law.
Eliminate the 200 Foot Law.
Change liquor license approval standard to “good cause” instead of “public convenience and advantage.”
Remove obsolete portions of the ABC Law.
Create a temporary permit for licensees that allows the service of beer, wine, cider, and liquor.
Create a temporary wholesale permit for wholesale license holders that have applied for a full license.
Review the licensing fee structure for appropriateness.

While the latest legislative session is over and supporters for ABC law changes didn’t see the progress they may have wanted, no doubt there is more to come. We’ll keep you updated as we learn what’s next. In the meantime, if you need any assistance with your accounting, tax, audit or business advisory needs, please know RBT CPAs is here to help. We believe we succeed when we help our clients succeed. Interested in learning more? Give us a call today.

RBT CPAs is proud to say 100% of its work is prepared by in America by employees from our New York offices. Our company does not outsource or offshore work, so you always know who is handling your confidential financial data.

New Funding Opportunities Announced: July 28 Deadline

Now that the debt ceiling crisis has been averted, there’s time to focus on other things – like upcoming funding opportunities through the Mid-Hudson Momentum Fund and regional economic development councils (REDCs). With July 28 at 4 p.m. as the deadline for both, here’s what to know and do…

New! Mid-Hudson Momentum Fund (MHMF)

Introduced this year, the Mid-Hudson REDC – representing Dutchess, Orange, Putnam, Rockland, Ulster, Sullivan, and Westchester – will award up to $150 million for infrastructure, transit-oriented development (TOD), and mixed-use housing project investments aligning with the council’s regional strategy.

Eligible applicants include municipalities, non-profit organizations, for-profit companies, and public benefit corporations (i.e., IDAs and LDCs). Eligible projects include facility rehabilitation, construction, and expansion; design/engineering for construction; infrastructure and site development; and equipment and machinery.

Ideal projects are those that can begin quickly, have community support, leverage non-state investment, are financially sound, and/or will result in increased affordable housing. For complete details, see the program guidelines and application.

REDC Funding Opportunities

The Consolidated Funding Application (CFA) opened on May 15, providing access to apply for funding – in the form of capital or tax credits – from up to 30 different programs (depending on eligibility). This year, there are two new micro-grant programs – each will reward up to $5 million in grants:

Craft Beverage Microgrant Program providing $25,000 to $50,000 grants for equipment purchases and facility upgrades.
Not-for-Profit Capital Grant Program providing matching grants ranging from $25,000 to $100,000 for facility improvements and upgrades.

REDCs are encouraged to support projects that advance state priorities. This includes childcare, distressed communities, green buildings, sustainable development, and innovative public-private partnerships. Also, REDCs have been instructed to update their economic and development plans to confirm growth priorities, define resource deployment, and map out how goals will be achieved. As part of this process, each REDC will pick one challenge and develop proposed creative and innovative solutions; up to three REDCs will receive up to $10 million in funding to execute their proposals.

For more information, including a guidebook, summary of grants, an application manual, informational webinars, and more, click here.

While you’re identifying and applying for potential funding, remember, RBT CPAs is here to lighten your load by providing accounting, tax, audit, and advisory services. We’ve been proudly serving the Hudson Valley (and beyond) for over 55 years and complete all work locally – we never outsource or offshore. To learn more about how RBT CPAs can support and contribute to your success, give us a call.

There’s Now Proof That 5G Can Transform Healthcare

In today’s media, it’s hard to tell the difference between news and marketing. Take 5G and healthcare as an example. Talk of the revolutionary nature of this next generation of wireless technology has been around for years, but in truth the uptake has been slow. So, I set out to see what I could learn about whether and how 5G is transforming health care. Here’s what I found…

First, what is 5G? It stands for the fifth generation of cellular wireless technology (1G allowed for voice; 2G – digital voice; 3G – data; 4G – streaming; and 4GLTE encompasses everything up to 4G, faster and better than ever). 5G will transmit data 20x faster than 4G; handle 100x more traffic so more devices can be connected and work more reliably; support wireless operations; speed up how quick data can be uploaded and transported; and dramatically increase the amount of data available for decision-making.

While Wi-Fi doesn’t have the bandwidth to support all of the leading-edge technologies – like the IoMT, edge computing, robots, augmented and virtual reality (AR/VR), and more – 5G can. It’s expected to transform how work gets done, driving productivity, competitiveness, quality, cost savings, profitability, smart decision-making, data security, and more.

As reported by ManagedHealthcareExecutive.com, the Cleveland Clinic Mentor Hospital – scheduled to open its doors to patients on July 11 – is the first U.S. hospital built with a private 5G network via a partnership with Verizon Communications, providing “an opportunity to explore how private 5G networks can help enable digital transformations in hospital settings.”

According to InsiderIntelligence.com, the Cleveland Clinic is already ranked fourth by Newsweek’s World’s Best Smart Hospitals 2023 (Mayo Clinic, Massachusetts General and John Hopkins take the top three spots). With 5G at Mentor Hospital, the clinic will be exploring potential use cases for asset tracking, digital displays, entertainment, check-in kiosks, AR/VR for education/assisted surgery/imaging, and more.

While looking forward to the learnings that will come from Mentor Hospital’s 5G capabilities, Samsung Medical Center (SMC) in Seoul, South Korea is already experiencing the benefits of integrating 5G with digital pathology.

HealthcareITNews.com reports 5G is helping to cut pathology time at SMC in half. They have three diagnostic reading rooms that received numerous “requests for frozen section tests.” It would take 15 to 20 minutes for someone to get to the rooms, until a scanner, analysis and interpretation software, a desktop computer, and 5G enabled access via mobile devices, reducing response time to 10 minutes. The result is quicker diagnosis and fewer surgical delays.

In April, The Wall Street Journal reported on how another hospital in Seoul is using AR technology to promote precision during surgery thanks to its private 5G network which can upload and transmit tremendous amounts of data without lags. The Ewha Womans University Mokdong Hospital’s 5G-enabled AR technology helps surgeons see the exact location of tissues and tumors when a tablet is placed above a patient’s chest. This replaces a surgeon making incisions based on CT scans.

The hospital also tested the system for a recent surgery where surgeons in different locations were able to join a procedure and exchange advice, setting the stage for remote surgeries and even physician training.

(FYI: The AR technology was developed by SKIA Co. which is applying for regulatory approval in South Korea for widespread use and subsequently plans to apply for approval from the U.S. Food and Drug Administration.)

No doubt, this is just the beginning. As The Wall Street Journal reported, “The 5G healthcare market—encompassing 5G-supported augmented-reality and virtual-reality technology services, virtual consultations, remote patient monitoring and more—was valued at $2.5 billion in 2021 and is expected to grow an average of more than 35% annually from 2022 to 2030, according to Global Market Insights, a market research firm.”

While you may be thinking about where and how 5G will impact your healthcare organization’s future strategy, please know that RBT CPAs can help free you up by handling all of your accounting, tax, audit, and business advisory needs. To learn more, visit us at RBTCPAs.com or give us a call today.

What If We Already Know How to Solve the Labor Crisis?

Survey after survey is showing the same thing – businesses need to get back to basics to create the type of work environment that attracts and keeps employees. With almost 50% of employees looking for a new job in the first half of 2023 (Solutions, 2022), creating a workplace that attracts and retains talent has shifted from an HR problem to a C-suite strategic imperative, and time is of the essence.

The current labor situation is different from any in our country’s history in one major way: there are simply more jobs than people to fill them. A recent article on Bloomberg.com summed up the result, stating, “The time has arrived when America’s demographics are conspiring against its economic ambitions.” (Donnan, 2023) This sentiment holds true, according to a 2022 Manufacturing Institute/Deloitte study reporting almost half of manufacturing executives had turned down business opportunities due to the lack of workers (Institute, 2022). The situation is not going to get better any time soon, with the Congressional Budget Office predicting the American workforce will grow by less than .2% a year through 2031 (Office, 2023).

Many employers have set their sights on finding new, leading-edge solutions to address the crisis. No doubt innovation has its place, but so does creating a mutually beneficial, healthy employer-employee relationship and workplace based on fundamentals.

In January, Gallup reported that employee engagement is at its lowest since 2015, with the biggest declines in clarity of expectations; connection to the mission or purpose of the company; opportunities to learn and grow; opportunities to do what employees do best; and feeling cared about at work. The path to drive improvements isn’t new (ask employees for feedback; make changes based on feedback; clarify expectations; share and celebrate positive results); but, Gallup does have decades of proof that it works (Harter, 2023).

Another survey’s results issued in January, this time by the Conference Board, reinforce the crucial role fundamentals play in creating a workplace that works for today’s employee. The 2023 C-Suite Outlook Survey identified four strategies to create a better workplace: prioritize employee wellness to promote physical, mental, and financial health, as well as stress management; embrace flexible work arrangements; invest in all employees’ professional development; and strengthen succession plans. (Board, 2023)

There’s more. Executive Networks’ “The 2023 Future of Working and Learning Report” points to upskilling as the most critical aspect of organizational success this year. 45% of knowledge workers and 30% of front-line workers said people are leaving their company due to insufficient career advancement or development opportunities. About 83% of HR leaders and 79% of business leaders agree skills-based training should be used as a retention tool. (Networks, 2023)

Together, these survey findings and reports tell a powerful story: businesses need to get back to basics and walk the talk when it comes to creating the type of work environment that attracts, retains, and grows skilled talent. Still, this appears easier said than done.

The Manufacturing Institute with support from Colonial Life issued a report in November called: “The Manufacturing Experience: Closing the Gender Gap.” It says: “As it stands, women make up more than 29% of the manufacturing workforce. By raising the percentage of women in the manufacturing sector to 35% of total employment in the sector, there could be 800,000 more female manufacturing employees. This would be enough to fill almost every open job in the manufacturing sector today.” (Life, 2022)

It sounds easy enough until you look at decades-old issues like pay equity. The Pew Research Center issued a report in March stating, “The gender pay gap in the U.S. persists, and in fact, has barely budged during the past two decades.” In 2002 women earned 80 cents on the dollar as compared to men. Twenty years later, the pay equity gap improved by just 2 cents, with women earning 82 cents for every dollar earned by men in 2022. (Kochhar, 2023)

Another disconnect relates to diversity, equity, inclusion and belonging (DEIB) initiatives. A survey commissioned by Indeed.com earlier this year found 49% of Black workers are considering or actively looking for another job due to unfair compensation, lack of career advancement, and lack of managerial support. Survey respondents indicate the actions companies take for DEIB (i.e., diverse hiring practices, diversity committees and awareness events) simply do not align with what Black employees want (i.e., pay transparency and equity; scheduling flexibility for work/life balance; and increased representation). (Team, 2023)

A presentation at the International Manufacturing Technology Show reinforced the disconnect. Cofounder of Thurgood Industries Darnell Epps said, “Black unemployment in our big cities is extraordinarily high, yet there’s very little outreach and recruitment in communities of color throughout our big cities. In Philly, LA, NYC…black unemployment in February was above 15%. In Detroit it was about 20%. More could be done with regard to the industry and with trade schools in focusing on those populations that have been underserved and have historic levels of unemployment and underemployment.” (Webster, 2022)

No doubt there is a place for innovations like artificial intelligence, employer/education/government collaborations, and more to address the labor crisis, but equal focus and effort should be given to getting back to the basics that create a great workplace, and really committing to drive long-lasting progress.

Show Me the Money! IIJA, NY Budget & Funding Updates

With less than 20% of the Infrastructure Investment and Jobs Act (IIJA) funds being allocated since the $1.2 trillion legislation was signed into law on November 15, 2021 (according to ConstructionDive.com), some of the novelty about potential construction opportunities has waned. However, a renewed effort to hasten IIJA funding, the newly approved NYS 2023 Fiscal Budget, and upcoming funding opportunities may be just what’s needed to get projects off the ground.

In a press release issued on May 19^th, the New York Building Congress launched the Infrastructure Action Council (IAC) to drive infrastructure advocacy by meeting with government leaders in Albany and Washington D.C. to get shovels in the ground.

According to Carlo A. Scissura, Esq., President and CEO of the New York Building Congress, “More than a year and a half since President Biden’s signing of the historic $1.2 trillion Infrastructure Investment and Jobs Act, we’re still sitting on billions of unspent federal dollars that we can use to improve the lives of millions of Americans.” He continues, “The Infrastructure Action Council unites leading voices in our nation’s building industry to advance our ongoing efforts to fund transformative projects across the state.”

Just a few weeks earlier, New York’s 2024 Fiscal Year budget was approved and although a proposed housing compact didn’t make it in, there is $23.2 billion allocated for key capital projects across the state, including:

$1.3 billion for road and bridge projects
$417 billion for Bronx River Parkway upgrades and bridge replacements
$43 million to replace the US Route 20 bridge over Cazenovia Creek
$51 million for rehabilitation and replacement of Hudson Valley Bridge
$2.4 billion to maintain and upgrade SUNY/CUNY campuses
$1.7 billion towards the Wadsworth health facility – a new public health lab on the Harriman State Office Campus Complex in Albany
$890 million for expanding mental health housing
$500 million to help deliver clean water to NY communities
$455 million for the Belmont Redevelopment Project
$400 million to the Environmental Protection Fund
$224 million for the South Shore Staten Island Seawall
$150 million to Regional Economic Development Councils
$135 for NYC’s Housing Authority
$105 million for State Emergency Operations Center upgrades
$100 million to buy and renovate a new State Police satellite crime lab
$50 million to fund a Homeowner Stabilization Fund for home repairs in 10 low-income communities
$30 million towards NY aquaria, botanical gardens, and zoos
$17.5 million for the Mamaroneck/Sheldrake River Flood Risk Management Project

(Source: MacLennan, Robin. FY 2024 budget includes $23.2 billion for capital projects across NY. May 5, 2023. NewYorkConstructionReport.com.)

Concurrently, NY funding opportunities have been announced for the Mid-Hudson Momentum Fund (here are the guidelines and application) and Round XIII of the Regional Economic Development Council initiative. The consolidated funding application for 30 different programs is available here; the deadline is July 28 @ 4 p.m. Be sure to visit the Mid-Hudson Regional Economic Development Council webpage for more information and resources, and to sign up for informational webinars underway.

While you’re identifying and evaluating opportunities for your construction company, remember, RBT CPAs is here to lighten your load by providing accounting, tax, audit, and advisory services. We’ve been proudly serving the Hudson Valley (and beyond) for over 55 years and complete all work locally – we never outsource or offshore. To learn more about how RBT CPAs can support and contribute to your success, give us a call.

Construction Opportunities in the NYS Budget and Federal Acts

The New York Fiscal Year 2024 budget was worth the wait for construction businesses thanks to over $23 billion for infrastructure and capital projects across the state. At the same time, the budget makes history with the most progressive legislation on building decarbonization, continuing to incentivize the move to sustainable buildings with climate-friendly, clean, and affordable energy and complimenting certain Inflation Reduction Act tax deductions and credits.

On May 2, New York’s Fiscal Year budget was approved. While a housing compact that would have resulted in 800,000 housing units being built didn’t make it across the finish line, the budget does include $23.2 billion for capital projects that touch a variety of industries and fields.

The New York Department of Transportation’s five-year plan enters its second year with more than $7 billion budgeted for road and bridge projects.

State and City University of New York (SUNY and CUNY) campuses will see $2.4 billion in transformations, preservation and upgrades including building envelope, interior, electrical, HVAC and utility projects.

Design options for a new Wadsworth Public Health Laboratory for research in Albany will be funded with $1.7 billion so lab operations currently handled in several locations can be consolidated into one.

In addition, $1 billion is budgeted for healthcare capital projects; $890 million for mental health housing; $500 million for clean water projects; $446 million for the third phase of the Hunts Point Interstate Access Improvement project; $224 million for a seawall project on the South Shore of Staten Island; $135 million for New York City Housing Authority projects; $105 million for State Emergency Operations Center upgrades; $100 million for a State Police satellite crime lab; $51 million for Hudson Valley bridge replacements and rehabilitations; $50 million for a Homeowner Stabilization Fund to finance home repairs in 10 communities; $17.5 million to design and construct the Mamaroneck and Sheldrake River Flood Risk Management project; and more.

The new budget also makes New York the first state to advance comprehensive legislation for zero-emissions for new buildings and homes seven stories and under starting December 31, 2025, and all new buildings by December 31, 2028 (there are some exceptions and exemptions).

What’s more, $200 million is allocated to the NYSERDA EmPower Plus Home Retrofits Program to help 20,000 low-income families retrofit homes with insulation, energy efficient appliances, and clean energy solutions. Another $200 million is set aside for critical infrastructure projects at New York Parks.

This comes on the heels of the Inflation Reduction Act’s January 1, 2023 effective date for 179D Commercial Buildings Energy Efficiency Tax Deduction enhancements and new 45L tax credits for homebuilders.

For 179D, when prevailing wage and apprenticeship requirements are met and a building reduces annual energy and power costs by at least 25%, there is a $2.50 square foot deduction. For each additional percentage that annual energy and power costs are reduced, the deduction increases by $.10, up to $5.00/square foot (up from $1.88/square foot in 2022). The deduction is available every three years for commercial buildings; every four for municipalities, tribal governments, and non-profits. What’s more, municipalities, tribal governments, and non-profits can allocate to the deduction to the person/people who create the energy-efficient commercial building property installation technical specifications.

For IRC Sec 45L, there are two tiers of credits – $1,000 or $5,000 – for eligible new or substantially reconstructed homes and dwelling units (that are part of a building) that meet certain ENERGY STAR and Department of Energy Zero Energy Ready Home (ZERH) program requirements. The credit is available for homes/dwellings acquired after December 31, 2022 through December 31, 2033. (For details, visit 45L Tax Credits for Zero Energy Ready Homes at Energy.gov.)

Between state and Federal efforts, one thing is clear: a lot of opportunities exist – and undoubtedly there will be more to come – for construction companies and builders that embrace clean energy and climate-friendly practices and materials.