Understanding New York’s Tip Credit

Understanding New York’s Tip Credit

Several states have already done away with tip credit for food service workers, and more are exploring the option, including New York. While the debate continues about whether this is a positive or a negative for restaurants and employees, New York has moved ahead with changes to wage theft laws, along with minimum wage increases starting this year and continuing in 2025 and 2026. This makes understanding how the tip credit works in New York even more important as mistakes can be costly and even result in criminal proceedings.

Here’s a quick review…

What is a tip?

Any amount of money a customer voluntarily leaves that’s above the ticket price plus tax is considered a tip.

What is a tip credit?

It allows employers to pay food service workers a rate that’s lower than minimum wage by including tips or a portion of them in wage calculations. Foodservice workers’ combined wage plus tips must equal at least the full minimum wage; otherwise, the employer must make up the difference.

Who owns a tip?

A tip belongs to an employee – not an employer. An employer is not entitled to take any part of a tip, except for a percentage of tips for a valid tip pool.

Who is considered a tipped worker?

While this isn’t defined under NY law, the FLSA applies and defines it as “a tipped employee is an employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.”

What about service charges?

Under the FLSA, mandatory service charges are the property of the restaurant as they’re not considered tips, but New York has a more generous policy so it takes precedence. It assumes service charges are gratuities and belong to employees. Employers must clearly let customers know when administrative charges like banquet or special event fees are not tips and, if the restaurant splits the charges with staff, they must let customers know the exact split rate.

What is New York’s minimum wage for tipped food service workers?

In NYC, Long Island, and Westchester, the cash wage is $10.65 and the tip credit is $5.35. For all other NY locations, the cash wage is $10 and the tip credit is $5.

What recourse do employees have if tip regulations are not followed?

They may report or file a complaint regarding hour or wage violations and are protected by law against retaliation. As of the end of last year, wage theft became eligible for criminal prosecution.

Are there tip recordkeeping and reporting requirements?

Yes! They help ensure compliance with state and federal wage and hour laws and serve as proof that you are upholding minimum wage requirements. Under NY Labor Law Section 196-d, employers are required to have daily records of the tips employees receive and those records are subject to DOL inspections. Also, employee wage statements must show how much of the pay is in tips and wages.

To help with recordkeeping and compliance, there are restaurant management systems to track and retain tip documentation. There are also applications allowing employees to self-report.

While the future of tip credits in New York is up in the air, right now they still exist. If you have any questions, we strongly encourage you to seek legal counsel.

Please remember RBT CPAs is available to meet all of your accounting, tax, audit, and advisory needs. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 50 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

 

Note: RBT CPAs is not a law firm and the information provided herein should not be taken as legal counsel or advice. Any questions should be directed to your legal counsel.

Does My Small Business Need to File Beneficial Ownership Information?

Does My Small Business Need to File Beneficial Ownership Information?

Under the Corporate Transparency Act (CTA), certain businesses formed or operating in the U.S. must report information about their beneficial owners – the people who own or control them – to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). This applies to most companies, including small businesses.

While it sounds like the stuff spy movies are made of, FinCEN Beneficial Ownership Information (BOI) reporting is real and is something businesses need to take seriously.

The U.S. adopted the law to protect against money laundering and related crimes while promoting national security. The willful failure to comply or the willful attempt to provide fraudulent information can result in fines of up to $591 each day a violation continues and criminal prosecution (imprisonment for up to 2 years and/or up to a $10,000 fine).

Earlier this year, the law was challenged in the Northern District of Alabama. The court ruled it exceeds Congress’ power and can’t be enforced against the plaintiffs (Isaac Winkles and companies for which he is the beneficial owner; the National Small Business Association, and its members. This is currently under appeal. For now, any covered entity other than those named in the suit are required to comply.

So, what is beneficial ownership information (BOI)? BOI is information about individuals who directly or indirectly own or control a company.

What companies are required to report BOI? According to the U.S. Chamber of Commerce, a reporting company is any privately held company – domestic or foreign – registered to conduct business in the U.S.

There is a list of 23 entity types that are exempt from reporting, including nonprofits, government authorities, publicly traded companies, banks/credit unions, and such. If your business is not considered exempt and it is a domestic or foreign reporting company, filing requirements and deadlines apply.

A business created or registered before January 1, 2024, has until January 1, 2025, to file. Otherwise, the business must file within 90 calendar days of receipt of the company’s creation or registration if it’s before January 1, 2025. Thereafter, the filing must occur within 30 days of creation/registration.

Full details and resources are available on the FinCEN website.  Go there to file BOI information, see Frequently Asked Questions, and access resources for small businesses including a Compliance Guide.

As you take care of the many aspects of running a business – including BOI filings (if required), please remember RBT CPAs is available to meet all of your accounting, tax, audit, and advisory needs. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 50 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

 

Note: RBT CPAs is not a law firm and the information provided herein should not be taken as advice. Any questions should be directed to your legal counsel.

Funding Opportunity & Comments on Proposed Rule with June Deadlines

Funding Opportunity & Comments on Proposed Rule with June Deadlines

We are always on the lookout for funding and advocacy opportunities to benefit our HUD clients and prospects. Following is information about a funding opportunity for community revitalization efforts and a proposed rule to reduce barriers to HUD-Assisted Housing. Here are the highlights…

FY24 Choice Neighborhoods Planning Grant

On April 9, the FY24 Choice Neighborhoods Planning Grant opened for applications. This funding opportunity is designed to support the development and implementation of a neighborhood revitalization strategy (a.k.a. Transformation Plan) with a focus on housing, people, and neighborhoods. The strategy/plan can then be used to guide the revitalization of assisted and/or public housing and the surrounding neighborhood to have a positive impact on families.

What’s more, grant recipients earn additional points and are given priority for future Choice Neighborhood Implementation Grants, which provide up to $50 million to implement a Transformation Plan.

The application is open to communities of all sizes. $10 million in funding is available, with a maximum grant of $500,000. About 20 communities will be selected for funding. The deadline for applications is June 10 at 11:59 p.m. Eastern Time. For additional information, here is the notice of funding opportunity.

Proposed Rule to Reduce Barriers to HUD-Assisted Housing

On April 9, HUD posted a proposed rule – “Reducing Barriers to HUD-Assisted Housing” – and is seeking public comment by June 10.

The rule proposes that people with a criminal record cannot be automatically terminated from or denied access to HUD-assisted housing, including Housing Choice Vouchers, public housing, and multifamily housing. Instead, owners of HUD-assisted multifamily housing and public housing agencies (PHAs) would be required to use an individualized assessment that considers criminal records relevant to endangering the health and safety of residents and staff, while also giving full consideration to mitigating factors and circumstances.

As a result, PHAs and assisted housing owners would have more discretion and provide direction for fair, effective, and comprehensive admission and termination policies. Ultimately, the proposed rule would help minimize unnecessary exclusions while maintaining a healthy and safe environment.

HUD invites all members of the public and interested parties to submit views, comments, and suggestions by June 10. As per the notice of proposed rulemaking on the federal register, comments can be submitted electronically through the Federal eRulemaking Portal at http://www.regulations.gov or via mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500.

While you consider grants and proposed rules, please remember RBT CPAs is here to help with all of your accounting, tax, audit, and advisory needs. Give us a call today.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

What’s the latest on AI regulations in New York?

What’s the latest on AI regulations in New York?

In the absence of Federal legislation governing AI, states are taking it upon themselves to try to get ahead of, or at least keep up with, its development and use. New York is among the forerunners, with legislation already adopted for state agencies and more being explored in relation to labor laws, penal law, the regulation of specific industries, and more.

Overall, legislation seems to be trying to balance unlocking AI potential for the public good while protecting the public from its downsides. Municipalities and their employees should stay abreast of what’s here and what’s coming to ensure compliance and make informed decisions about local AI applications and use.

AI Policy for NYS Agencies

In January, New York State’s Information Technology AI Policy took effect. While encouraging state agencies to adopt AI tools, it also sets guidance for doing so responsibly. While the policy does not cover authorities, boards, and other NYS Government organizations (i.e., the MTA and NYSERDA), these groups are encouraged to follow the policy or use it as guidance.

The policy is broad and should be reviewed in full to understand its full scope. In general, agencies are allowed to adopt their own policies if they are not less restrictive than the state’s policy. State agencies must appoint supervisors to oversee AI systems, which are not allowed to make decisions impacting the public without final approval by a human. State agencies should also have policies for processing personally identifiable, confidential, or sensitive information. They are also advised to consult counsel to ensure intellectual property protections aren’t undermined when inputting data.

The policy also includes best practices for addressing unacceptable uses of generative tools to deceive people, creating content without confirming data, and using AI chatbots without identifying them as such.

Proposed Updates to NY Penal Code

On the criminal law front, Governor Hochul proposed legislation in February as part of the FY 2025 budget to set “important guardrails” to protect against untrustworthy and fraudulent uses of AI. This would classify using AI for the unauthorized use of a person’s voice as a misdemeanor; allow for private action to combat digitally manipulated, false images; disclosure on digitized political communications published within 60 days of an election; and clarify current law regarding unlawful distribution of intimate or sexually explicit images.

Proposed NY Labor Law

NY Bill S07623 was proposed on February 28. If enacted, it would be unlawful to use an automated employment decision tool (AEDT) to screen applicants for jobs in NY, unless the AEDT underwent a disparate impact analysis in the past year, and the employer published a summary of the analysis on its website and provided the NY DOL with an annual summary. If enacted, it will take effect immediately. (This aligns with NYC’s Local Law 144 which took effect last July, setting rules for employer use of AEDTs for screening, hiring, and assessing employees for advancement.)

Private Sector Impacts

As for legislation covering the private sector, while a proposed state task force focusing on this was vetoed in 2023, proposed legislation and guidelines for different industries have been issued and/or are in the pipeline.

For example, the NYS Department of Financial Services issued a proposed circular letter on January 17 regarding the use of external consumer data and information sources(ECDIS), as well as AI systems (AIS), for insurance underwriting and pricing. It includes rules and principles to address “risks of inaccurate, arbitrary, capricious, or unfairly discriminatory outcomes that may disproportionately affect vulnerable communities and individuals or otherwise undermine the insurance marketplace in New York.” Comments on the letter were accepted until mid-March, so there may be more to come.

The insurance industry isn’t alone. For example, bills SB 7922 and AB 8098 target book publishers, requiring disclosure when books are produced with AI. When it comes to newspapers, magazines, and other publications printed or electronically published, SB 7847 would require identification of any parts made with AI.

For all businesses, there’s AB 8179, which would impose a “Robot Tax” on businesses that displace workers with AI.  There’s also the Advanced Artificial Intelligence Licensing Act which would require the registration and licensing of advanced AI systems considered high-risk

No doubt, more is coming – a lot more. As you work with counsel to understand the impact of new laws and those in the pipeline, while making sure your employees are also up-to-speed, if your organization needs any accounting, audit, tax, or advisory services, you can continue to count on RBT CPAs to do the job professionally, ethically, on-time and within budget. Give us a call to learn more.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

 

Please note: RBT CPAs is not a law firm and the information herein should not be construed as legal advice. As always, to ensure your policies comply with global, national, state, and local laws, it is in your best interest to seek legal counsel.

How to Protect Your Assets from Future Long-term Care Needs

How to Protect Your Assets from Future Long-term Care Needs

In truth, none of us know what type of medical care we’re going to need in the future. Some may need none and some may need care for years. We just don’t know. What we do know is that future healthcare costs can wipe out lifetime savings, assets, and financial legacies, unless you plan in advance.

According to the NYS Partnership for Long-Term Care, the average cost of a nursing home in the Northern Metropolitan area (covering Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester counties) is $466 daily, $14,165 monthly, or $169,980 annually! People with significant assets (over $6 million) may be in a position to cover those costs, even for a long period of time. People with low to no assets will likely be eligible for Medicaid. What about those in between?

For those 65 and up, Medicare does not cover long-term care (LTC); it does cover short-term nursing home expenses for rehab for eligible individuals. Medicaid does cover LTC, if you’re eligible. Eligibility is based on income and total assets, with limits varying by state. For example, in New York, for Medicaid LTC coverage to kick in, the following limits apply:

  • Single: a maximum of $1,732/monthly income and $31,175/total assets.
  • Married with both spouses requiring LTC: a maximum of $2,351/monthly income and $42,312/total assets.

(The American Council on Aging provides a free test to determine Medicaid eligibility for the elderly. To learn more, click here.)

There is a way to protect your assets and still benefit from Medicaid – a Medicaid Asset Protect Trust or MAPT.  A MAPT is an irrevocable trust. You’ll basically shift assets to a trustee. This allows you to protect a portion of your assets for loved ones while still allowing you to qualify for Medicaid. There are a couple of caveats that are important to know.

First, states have a lookback period for Medicaid eligibility. In most states, including New York, the current lookback period is 5 years  If money or assets are transferred to a trust inside of the lookback period or simply given away, gifted, or sold for below market value, it will delay Medicaid benefits. The delay or penalty period equals the value of the funds transferred/gifted/given away/sold by Medicaid’s regional rate for nursing home care. (The regional rate varies by county and is updated annually.  Click here to see the 2024 New York regional rates.)

In basic terms, if you transfer $100,000 to an irrevocable trust two years before needing a nursing home and assume the regional rate is $10,000/month (just for simplicity’s sake), you would not be eligible for Medicaid assistance for 10 months ($100,000/$10,000) and you’d end up spending the full $100,000 you put in the trust.

On the other hand, if you establish the trust early enough and the lookback period has passed by the time you need LTC, the assets in your MAPT will not count toward your Medicaid eligibility. So, you can get LTC and protect your assets.

Second, there is a trade-off. When you establish an irrevocable trust, you designate someone else as trustee, giving them full control of your assets. You cannot change or cancel the trust in any manner. While the trustee can distribute income to you if authorized by the trust agreement, he/she will not distribute principal to you. That means you are putting 100% trust in that person.

Those are the biggest considerations. There are others. For example, when you die, Medicaid can recover funds paid on your behalf by going after assets like a house. On the other hand, assets placed in an irrevocable trust will not be included in your estate for the calculation of estate taxes or probate.

Interested in learning more about how to protect your assets and ensure you can get the medical care you may need in the future?  RBT CPAs professionals in our Estate, Trust, and Gift Practice can help.

While RBT is not a law firm, RBT CPA professionals in our Estate, Trust and Gift Practice can help you plan for future healthcare needs as part of an overall estate plan. We can help you understand your options and define a course of action; refer you to an attorney who can create related legal documents (or work with your attorney if you already have one); review legal documents to ensure they accurately reflect your wishes; and review and update your plan annually so they continue to reflect your wishes and are adapted due to any tax law changes.

Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Revolutionizing Construction: Using Drones for Site Surveys, Inspections, and 3D Modeling

Revolutionizing Construction: Using Drones for Site Surveys, Inspections, and 3D Modeling

Among the many technologies driving advancements in our world, drones are highly transformative, especially when it comes to the construction industry and their ability to increase accuracy, promote safety, and improve efficiency. Drones or Unmanned Aerial Vehicles (UAVs) are remote-controlled, high-tech devices that have become invaluable when it comes to site surveys and mapping, inspections, 3D modeling, and more. Adding drone capabilities to your business offerings is easier than ever thanks to an ever-growing list of options and resources.

What drones can do for your business

Drones complete critical tasks in less time and at a fraction of the cost of traditional methods. This includes but isn’t limited to, site surveying and mapping, inspections, and 3D modeling.

Site surveys and mapping are time-consuming, labor-intensive activities that pose safety risks. Drones significantly mitigate these challenges. They provide a bird’s eye view of a construction site, capturing high-resolution images and videos. This aerial perspective enables companies to identify potential issues, measure distances, and assess the landscape while reducing the need for manual labor.

When it comes to inspections, a drone’s ability to reach inaccessible or dangerous areas is proving invaluable. Previously, inspectors had to physically climb structures, risking their safety to check the integrity of buildings. Now, drones equipped with advanced cameras, sensors, and GPS technology can inspect structures with improved accuracy and detail.

As for 3D modeling, by capturing multiple aerial images from different angles, drones allow businesses to create highly accurate models and maps and enable construction teams to assess terrain, plan layouts, and identify obstacles. As a result, issues are addressed, plans are adjusted, and resources are optimized before construction begins.

In addition, 3D models can be used for progress monitoring. By comparing a project’s current state with a model, construction companies can track progress, maintain schedules, and manage resources more effectively.

Undoubtedly, the use of drones in construction will continue to grow thanks to enhanced capabilities from integration with the Internet of Things (IoT) and Artificial Intelligence (AI). AI-powered drones can already perform tasks autonomously, analyze data, and predict potential issues. Meanwhile, the IoT enables real-time data sharing and analysis, facilitating better decision-making and project management.

Construction companies using drones attest to the fact that they save time and money while promoting safety. The majority of large construction companies already use them. While uptake among smaller construction businesses has been slower, it is growing and presents an opportunity to be more profitable and distinguish your business from its competitors.

Getting drone capabilities off the ground

How do you get a drone program off the ground? Start by learning more. There’s an abundance of information online. Plus, drone manufacturers post valuable information on their websites, discussing everything from drone features and capabilities to use cases and important considerations.

Going a step further, you may want to explore online classes or certificate programs available at a growing number of community colleges to help you (or someone on your team) prepare to earn certification to operate a drone (as required by the Federal Aviation Administration).

Consider defining how you would use drones in your business. Create a budget and prioritize the drone capabilities you want, as both will prove useful when you research which drone hardware and software will best meet your needs.

You may have a few options for operating a drone. Depending on what’s available in your area, you can have someone on staff get certified to operate the drone; subcontract a licensed drone operator; or contract with a business specializing in offering drone services for construction.

Make sure whoever you use is familiar with federal, state, and local laws governing the commercial use of drones. Some municipalities don’t allow them to be used at all (largely due to privacy concerns). Others have restrictions, such as how close they can be flown to land. Requiring ongoing training is one way to stay up to speed on changing drone regulations, technology, and capabilities.

Finally, as your drone program and capabilities take off, develop a standard operating procedure covering aspects like mission planning, flight operations, data management, maintenance, and emergency procedures to ensure operations run smoothly and safely.

Investing time to launch drone capabilities as part of your construction business can have big payoffs now and in the future. Now is as good a time as any to get started.

New Generation of Workers Require New Approaches to Union Recruitment

New Generation of Workers Require New Approaches to Union Recruitment

With more Americans than ever supporting unions and more employees expressing interest in joining one, it’s a prime time to explore the best ways to attract the next generation of workers to grow union membership. After all, increasing membership leads to stronger unions, stable finances, and greater collective bargaining power.

According to the AFL-CIO, “71% of Americans support unions. The highest level in nearly 60 years. And our future is bright: 88% of people younger than 30 support unions, too.” These same statistics are being repeated by numerous sources, but there is a disconnect. Union membership growth is stagnant. A contributing factor may be how the recruitment of younger workers is approached.

In general, newer generations of workers:

  • Have different priorities and values. New generations of workers place a priority on work-life balance, respect, having a voice, valuing diversity, taking care of the planet, and making a difference. They also place a lot of value on benefits that can help them today – like higher pay, student loan reimbursements, time off, and childcare.
  • Learn differently and move fast. They never knew a world without the Internet or hand-held devices. Because they grew up as digital natives, they are quick to learn, adapt, and act.
  • Communicate and network differently. Their online identities and networks started in grammar and middle school. They meet, socialize, learn, date, work, find friends and roommates, play, and connect online.

All of this came into play during the grassroots unionization efforts at Starbucks, which apparently started with conversations among local employees who reached out to the local branch of a union to learn more. When their efforts became public, employees at other locations reached out for information. Through social media and digital meeting platforms, experiences were readily shared. While the story continues to unfold, it holds some valuable insights into how to engage the newest generation of workers and grow union memberships.

First, make sure newer generations know what a union is, why it exists and what it can do for them. Explore building membership pipelines by presenting at a high school or tech school’s career day or having a table at a local college’s career fair. Host a multi-generational event to build on the goodwill toward unions that exists today while having an opportunity to explain the role and value of a union. You never know when having that knowledge can inspire a young worker to act.

Second, have an online presence where people can easily find your organization, learn what it stands for, who it represents, and more information. Even better, use an online form to collect contact information from interested parties so a current union member can reach out to them directly.  If you don’t have a local website presence, use social media channels to post about meetings, celebrations, recognition, accomplishments, and events to provide insights that prompt potential members to take the next step.

And third, be prepared to help them get started – fast. Some unions have online training sessions that educate about the unionization process. Others have direct links to information on what unionizing entails.

Along the way, be sure to highlight the many benefits of unions, including the ability to deduct dues from New York state taxes on itemized returns; higher wages; better benefits; scheduling flexibility; paid time off; safer workplaces, and more.

As you focus on building your union’s membership, you can count on RBT CPAs to handle your accounting, tax, audit, and advisory needs. We have been serving organizations and individuals in the Hudson Valley for more than 55 years and show time after time how RBT CPAs and our clients can be Remarkably Better Together. For more information, give us a call.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

AI and ML: What’s Really Happening in the SMB Manufacturing Space?

AI and ML: What’s Really Happening in the SMB Manufacturing Space?

This is not another article on how artificial intelligence (AI) and machine learning (ML) are transforming manufacturing. Day after day, your inbox and media feed are probably full of them. As is the case with many trending stories, it’s hard to tell what’s actually happening versus what’s expected to happen. I’m hoping this article provides a little perspective so Small and Medium Businesses (SMBs) in the manufacturing space can stop feeling like they’re the only kids on the block without the latest I-phone.

Don’t get me wrong. The transformative capabilities and potential uses of AI and ML in the manufacturing space can’t be over-stated. AI/ML should absolutely be an ongoing strategic consideration for all manufacturing business leaders.

In January, the World Economic Forum’s article “6 ways to unleash the power of AI in manufacturing”  acknowledged: “The global AI in manufacturing market is valued at $3.2 billion in 2023 and is poised to grow to $20.8 billion by 2028. Yet, despite these possibilities and significant investments, manufacturers are not harnessing the full potential of AI.”

This sentiment was echoed in a recent blog article published by the American Society of Mechanical Engineers. While discussing AI as the industry’s key to future growth and profitability, the article acknowledges, “The uptick in usage has continued to be slow as well as uneven.” (Cecere, Cathy. March 6, 2024. “Manufacturing in 2024 Means Embracing AI.” ASME.org.)

After doing some research, I found this undercurrent of discussion about actual AI/ML use is starting to make its way into the media mainstream. It appears that while the biggest businesses and companies developing AI solutions are making the most progress and largest investments in AI/ML applications, SMBs in manufacturing should not just consider closing shop because they don’t have the knowledge, finances, or ability to make big leaps into the AI/ML arena right now.

It’s hard to tell what percentage of manufacturing companies – especially SMBs – are actually deploying AI/ML solutions today. Survey results from different sources run the gamut, indicating less than 4% of businesses are using AI/ML to produce goods and services to stating more than half of SMBs are playing in the AI/ML arena. One survey shows about 30% of large companies are using AI/ML and another shows less than 20% of global manufacturing companies use AI/ML on the plant floor.

Rather than trying to keep up with the Joneses, it feels like a good time to level set what manufacturing SMBs can actually do with AI/ML today and how to plan for the future. At this point, staying knowledgeable about what’s available, what’s coming, and use cases is vital.

Consider how AI/ML can address pain points in your business. Begin seeing how free AI apps can help you with a variety of everyday tasks, from marketing to scheduling, tracking receipts for expense reporting, and more. And, if you can, take advantage of AI enhancements to your current systems, equipment, and operations, explore where it makes the most sense.

The U.S. Chamber of Commerce has some information about small business use of AI. The U.S. National Institute of Standards and Technology (NIST) points out that, among other things, the Manufacturing Extension Partnership offers resources to “help you understand what technologies exist and if they are a good fit for your business,” with experts available to help you “establish an adoption strategy, scope the project, align suppliers with vetted resources and manage implementation to ensure your business goals and customer needs are met.” To learn about the NY MEP, click here.

As you’re considering how AI/ML will impact your business in the future, please remember RBT CPAs is  available to meet all of your accounting, tax, audit, and advisory needs. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 50 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Navigating the 2024-2025 Budget Season

Navigating the 2024-2025 Budget Season

As if the annual budget season for school administrators and Boards of Education (BOE) isn’t challenging enough, a lack of information about the final New York state budget’s impact on Foundation Aid and the hold harmless (also referred to as save harmless) provision, along with enrollment challenges and the pending expiration of pandemic-era relief funds, have combined to create a perfect storm.

Originally, we were hoping to write this article about where the New York State 2024 budget landed in respect to education. The deadline for a final budget was April 1, but it has been pushed back as Senate and Assembly members rejected proposed cuts and are fighting for a 3% budget increase and restoration of Foundation Aid.

According to Senator Michelle Hinchey, “The Mid-Hudson region stands out as the most affected area compared to other regions in the state, facing a $31 million reduction (4.2%) in total funding.”

Hinchey led a rally to restore funding for mid-Hudson and upstate NY school. As noted on her website, “Our rural and Mid-Hudson Valley schools face the biggest cuts in the entire state; these are districts that have historically received inadequate Foundation Aid and cannot absorb the detrimental losses proposed without cutting curriculum or laying off staff. Out of 31 school districts in my district, all but six of them would face drastic cuts in funding, forcing them to make these decisions imminently.”

This leaves districts in a precarious situation as budget season moves ahead and local budget voting periods loom.

Another focal point of most New York districts’ budget discussions relates to declining enrollment. While student enrollment has been decreasing for years nationwide, it accelerated during COVID and in the ensuing years. In fact, a report from the Associated Press indicates New York continued to lead the nation in enrollment declines in the 2022-2023 school year, with decreases in every county.

Challenges are exasperated in some areas by a teacher and staffing shortage. What’s more, some districts face additional burdens resulting from high turnover in superintendent, other key administrator, and BOE positions, contributing to disruptions in long-term strategic planning, stage-setting communication, and change management.

New York is by no means alone. In recent years, headlines across the U.S. have been highlighting  challenges brought about by falling enrollment and staffing challenges. Responses have ranged from school closures and consolidations to adoption of a four-day school week and more:

  • Energy and water audits and system updates; explore an energy purchasing consortia through BOCES operations.
  • Working with local government to share resources while reducing costs. This can include everything from library and IT services to groundskeeping, snow removal, equipment expenses, and purchasing coops.
  • Consolidating backroom operations with other districts and local government for functions like payroll and benefits administration, human resources, accounting, staff development, safety and risk management, printing, and more.
  • Vacancy cuts, early retirement incentives, hiring freezes, and rightsizing.
  • Renting or leasing space in empty facilities to generate an income stream.
  • Selling vacant property and saving on property insurance costs.
  • Using GPS routing and inventory management systems for transportation efficiencies; discontinuing courtesy bussing for students who live within a certain distance of a school.
  • Outsourcing non-educational functions like food, custodial, transportation, and IT services.

A few approaches that appear to be helping some districts navigate discussions and the budgeting process include:

  1. Having a long-term strategy, developed collaboratively with parents and the community, so priorities are defined in advance and help guide budget and spending decisions.
  2. Collaboratively working with parents and the community to define guiding principles for making budget cuts. For example, if the number one priority is to maintain all program offerings for students, it’s easier to narrow down and gain support for where costs can be reduced or reallocated.
  3. Developing and presenting budget options based on different funding scenarios – if the state budget moves forward as is; if Foundation Aid is restored; or if state aid increases.

As we wait for the final state budget and answers about education funding for the upcoming school year, bipartisan support for restoring Foundation Aid and increasing the budget along with higher than projected state revenues may help districts avoid the worst-case scenarios – at least for this budget season.

As you focus on your school’s or district’s budgets and plans for the upcoming school year, you can count on RBT CPAs to handle your accounting, tax, audit, and advisory needs. We have been serving organizations and individuals in the Hudson Valley for more than 55 years and show time after time how RBT CPAs and our clients can be Remarkably Better Together. For more information, give us a call.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.