N.Y. Senate Back to Work, Passes Sales Tax Extenders, OKs Bonds

The New York State Senate resumed business late last week after a month-long stalemate, passing a slew of legislation including sales tax extenders and borrowing authorizations.

With the Senate back in the hands of the majority Democrats following a Republican-led leadership coup on June 8 that ultimately failed, scores of uncontroversial bills that had sat in limbo for the past month were finally approved and submitted to Gov. David Paterson where they now await his signature.

The potential loss of sales tax revenue hung over many counties as routine extender bills languished. Counties need legislative permission to charge sales taxes above 3% and 36 of them did finally receive it last week, pending the governor's signature.

The additional sales tax levies, typically 1%, are routinely extended every two years. Most counties' extenders would have expired in November. Several counties also got authorization to increase hotel and motel taxes.

Nassau County can now look forward to going to market with an estimated $75 million of bonds to pay for an early retirement program - county officials expect that sale to come in September.

Yonkers can breathe a little easier now that extender revenue bills for mortgage recording taxes and a personal income tax surcharge were passed, which should put it on track to get an approval from the State Comptroller's office.

The Senate also passed increases in bonding authority for the New York State Housing Finance Agency to $14.2 billion, a $500 million increase, as well as a $300 million increase for the State of New York Mortgage Agency to $8.7 billion.

SONYMA would have lost its authorization to sell bonds tomorrow, without the passage of an extender bill. HFA officials thought they had already lost the authority to sell bonds on July 1 but an HFA spokesman said yesterday that they had learned that the authorization had been tucked into a housing bill that had been signed by the governor earlier in the legislative session.

New York City had been unable to sell personal income tax bonds through the New York City Transitional Finance credit because its debt cap had been reached. The Legislature has now passed a bill that combines the city's TFA and general obligation debt cap that will make it possible for the city to sell on either credit. The TFA PIT bonds are more highly rated than the city's GO debt.

The city had also lost its authorization to sell bonds through negotiation, as variable-rate debt, and to enter into interest rate swaps, but that is back on track, as is a plan to sell short-term notes.

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