5 Tips Towards a Smarter Financial Healthcare System

Healthcare Tips

This past spring, the healthcare industry was clobbered by the Covid-19 pandemic.

Resources were stretched to the limit and there was not nearly enough personal protective equipment (PPE) to keep medical staff or patients safe. We have seen medical professionals wear bandanas as makeshift masks, and trash bags in place of gowns — heightening the risk of infection and possibly death. As cases continue to explode, so do concerns about pushing our healthcare system beyond its capability. Healthcare administrators need innovative solutions to reduce operational expenses while simultaneously ensuring ample resource availability to cope with the next health crisis. Sound like an oxymoron? We’re here to help. Here are five tips you can implement to improve your inventory management and keep a handle on supply costs:

1. Collect Data from the Supply Chain

Failing to use supply chain data can result in billions of wasted dollars, yet many hospitals and medical centers are still using less sophisticated manual processes like Excel spreadsheets to manage inventory, supply expenses and other supply chain activities. An analysis by Navigant Consulting, estimates that hospitals could save an average of 17.7 percent or $11 million per hospital annually by standardizing their supply chain processes. Using value-based reimbursement models, organizations can more accurately link supplies needed and patient outcomes.

2. Clearly Organize Responsibilities

It’s time to Marie Kondo your inventory of supplies, because we all know that saving time and money sparks joy! Firstly, your team should aim to reduce wasted materials by getting organized – place products nearing expiration towards the front of facility closets. Additionally, get your team onboard by ensuring responsibilities are clearly outlined. Everyone who comes in direct contact with medical supplies should fully understand his or her role in healthcare inventory management. From cleaning rooms, to ordering supplies, or checking purchase orders for accuracy, so many hospital staff members contribute to successful inventory management. Establishing clear communication is the first step to avoiding confusion between departments.

3. Analyze Usage Vs. Order Frequency

Understanding precisely how much of a certain item you are ordering per week, month, or quarter compared to how much of that item you are using in the same timeframe is key to avoiding waste, saving valuable dollars, and planning for success. Another best practice tip? Don’t just assume if you ordered 10,000 units of a product last quarter, you should place that same order again. Make periodic adjustments to your ordering patterns based on the result of the last analysis.

4. Upgrade Hospital Inventory Technology

Are some of your management tools outdated? Sit down with your management team and identify the biggest issues you experienced in your inventory management, from software to computer equipment. Finding the limitations in your technology is a good way to determine if purchasing a new technology is necessary, or if new procedures need to be created. For example, you can create a streamlined tracking process by investing in an automated system that utilizes barcodes and RFID tags with unique identification numbers for each inventory item. Medical staff can scan the barcodes with mobile scanners and trust the data will be stored in the system; at the same time, the automatic data capture ensures accurate reporting for charting and inventory purposes. Automated inventory management systems can also identify whether products have been recalled or damaged. By adopting a more sophisticated digital platform, you can create a more balanced, prepared environment.

5. Time to Get Lean!

No, we are not talking about the “quarantine 15” though – we can relate. We’re referring to implementing a lean strategy to generate savings and create a better understanding of your costs. Lean teams generally aim to create standardized protocols, cut waste and develop cultures of continuous improvement that allow hospitals to adapt to rapid changes in the healthcare system. But despite proven results, the majority of health systems are not using the Lean method. In 2016, Caldwell Memorial Hospital in North Carolina, for instance, reported that it saved $2.62 million over two months with a lean strategy.

We understand it’s an incredibly challenging moment in history for the healthcare community and every dollar counts.

We want to help you be more equipped for the ongoing pandemic and future challenges. The dedicated staff at RBT is here to help answer any personalized questions you have regarding the way your team is running your healthcare system.

Knowing when outsourced accounting services can benefit New York local governments

Government Offical Deciding

COVID-19 and the resulting economic shutdown have been hard on local governments, and now may be a good time to weigh whether the trained eyes of outside accounting services can help put your Town, Village or City back on track.

In the best of times, officials in New York’s cities, town, villages, and counties have had to keep careful watch over spending. The pandemic, which brought budget cuts and state aid holdbacks, also brought along with cost-cutting measures to many municipalities. That included trimming staff through early retirement incentives, layoffs, and furloughs.

Did your municipality lose institutional knowledge when staff took retirement? What will it cost you to hire a new person, one with solid knowledge of the ins and outs of government accounting and bookkeeping, which is so different from commercial bookkeeping, to guide you through these tough times? Would hiring an outside consultant for accounting, one who specializes in government accounting, be more cost-effective?

The first thing for a municipality to consider when deciding whether to outsource this service to an independent accountant is the real cost of hiring a new full-time employee. In addition to salary, the municipality also bears the cost of medical benefits, as an employee and also as a future retiree, besides making payments into a pension fund.

For some municipal leaders, the initial reaction might be that they may prefer to have “a person in a seat,” someone in the building, who they can talk to directly. But if the pandemic has taught us all one thing, it’s how easily we can use Zoom or other video meeting programs for instant or near-instant virtual conversations. With one quick emailed meeting link, a mayor or supervisor can have an in-depth discussion, face to face via screen, with his or her accounting professional. That might have seemed unthinkable a year ago, but now virtual meetings are a staple of our professional, governmental, and personal lives.

And, of course, a consulting accounting firm could still have someone make on-site visits to the local government.

The outsourcing arrangement can free up the local government’s office staff to handle everyday cash transactions, receipts, and general bookkeeping, which can also improve their services to the public.

An outside accountant who specializes in governments can help the municipality identify ways to do things more efficiently and can help officials look for more ways to control or cut costs while minimizing the effects on services for the public.

Such outside accounting services can also provide an independent look at the municipal operations from an internal control perspective. They can help identify weaknesses in cash controls and review bank reconciliations. While hiring an independent accounting service will not relieve your local government of the need for periodic audits, it can prevent surprises when the audit comes.

Your government accounting specialist can advise your officials and remind them what you need to do at various points in the year, as well as review your budget.

The appropriate consultant is not just an accountant; he or she can also function as your financial accounting advisor who can also help smooth over tensions on boards when disagreements occur because the accounting advisor is independent.

Local governments in New York looking for ways to weather the financial fallout of the COVID-19 pandemic have had to come up with a myriad of new strategies to cut costs without decimating services to residents. Outsourcing accounting services to an independent specialist can be another outside-the-box strategy that saves taxpayer money while providing expertise and credibility to municipal operations.

Bumpy Road Ahead for NY’s Public Works

Signs of Construction Jobs Slowing Down

If you’re a part of this industry, you know it’s a late cycle business. You work on a backlog, so you never feel an immediate slowdown, and there’s (usually) always a project in the pipelines. But this past spring threw a curveball no one could have anticipated or predicted. Now, we’ve experienced our fair share of economic slowdowns in New York. As an industry, construction crews came together and supported one another in the aftermath of 9/11. You braced yourselves and recovered after the 2008 economic recession. But COVID-19 has created one of the fastest economic slowdowns in history, it feels a lot like we were collectively driving 65 miles per hour down Route 84 and slammed on the breaks without warning. Hopefully, you had your seat belt on because ever since February we’ve all been in for a bumpy ride. Forward procurement hasn’t stopped altogether but it has greatly softened, so while the construction industry is still fairly busy right now, contractor’s backlogs are trending downward.

Sales tax revenue for local governments in New York State dropped 27.1 percent in the second quarter compared to the same period last year, according to State Comptroller Thomas DiNapoli. Sales tax collections from April through June totaled $3.3 billion, which was $1.2 billion less than last year. Regionally, New York City was clearly hit early and hardest by the pandemic and the effects have lingered longest, with more businesses still unable to reopen due to health concerns, and construction projects delayed or halted. New York City’s second quarter decline of 34.9 percent was the result of deepening declines in April (-23 percent), May (-32 percent) and June (-46 percent). Because the federal government postponed the income tax payment due date from April 15 to July 15, that the big bump of tax payments expected in April, which generally represent about 13 to 15 percent of state income taxes, won’t count toward this fiscal year but the following one.

So, with tax revenue down, we can anticipate state and capital spending cuts. Unfortunately, 2021 will likely be a slower year than 2020 for construction projects, and contractors will probably see some softening of activity as early as the fourth quarter, regardless of what part of the state your business is concentrated in. As one of the most dense urban areas in the world and as a revenue powerhouse, the economic health of New York City is often the largest indicator of what the rest of the state can anticipate. Our current concern is that a lack of a larger federal government intervention would lead to New York lagging behind other states in its recovery effort. The MTA needs a $12 billion cash infusion to offset losses due to the coronavirus. If the federal government doesn’t approve aid, massive cuts to staffing and service could be implemented as soon as November. On a local level, we are already feeling project cut backs, with local municipalities being forced to cut back spending because they need to shore up their budgets. As much as we wish we could, our state doesn’t have the ability to print more money: cue the federal government.

What now? We could take a page out of the history books and recreate a domestic program to stimulate the economy on a national scale. You might recall in the 1930’s President Franklin D. Roosevelt enacted The New Deal, a series of programs, public work projects, financial reforms, and regulations to respond to needs for relief, reform, and recovery from the Great Depression. While it’s unlikely that New York would get specific public works project money handed over, a national initiative isn’t out of the question. The New York City region generates 8% of total U.S. GDP. According to an analysis by SUNY’s Rockefeller Institute of Government, New York’s massive economy means the state sends $116 billion more in tax revenues to the federal government than residents receive in benefits and services. Consider also that this is an election year, and whichever candidate becomes president, passing a big infrastructure bill to improve crumbling roadways and bridges across the country would likely gain bipartisan support. While we are optimistic that a big infrastructure deal could get passed, regardless of how the federal government will choose to step in we have to think of this pandemic in terms of a massive natural disaster. The construction industry will feel the aftershock the virus leaves behind even after it recedes. Contractors need to adapt to this reality if they are to survive the storm.

A recent study ranking the worst state infrastructures in the country leaves New York on a rocky road. The study places New York seventh for worst infrastructure in the United States and assigns the state a D grade after putting up a score of 158 out of a possible 400 points. While the number of deficient bridges and roads in poor condition and the cost to update the water system are grim statistics to pour over, this could actually be a saving grace for public works projects over the next three years. Infrastructure issues don’t magically disappear and deterioration does not stop because of an economic slowdown. If the federal government wants to stimulate the economy, it can choose to invest in infrastructure and generate job growth. With interest rates where they are, the New York construction industry represents a prime candidate for a “new deal-esque” stimulus.

We are hopeful that the road we are traveling represents a shorter than historic dip ahead. A massive public works project boost could allow us to reimagine New York’s infrastructure, launch sustainable green technology and position our state for continued future success. We feel optimistic that while 2021 will present its fair share of financial obstacles for New York’s private and public construction projects, 2022 opportunities and growth will rise from the rubble.

Restructuring Your Workflow to Save Money

Women Discussing Manufacturing Plans

We all know that “making it” in manufacturing is tough under the best of circumstances.

When things are booming, it’s hard to keep up. So your team works more. Then, when things are slow, it’s hard to survive. So your team works more. Throw statewide shut downs and a global pandemic in the mix? Well, let’s just say it’s critical for you to be taking a serious look into your current workflow and making proactive plans to save money. The financial decisions you make now can mean the difference between thriving, surviving, or shutting down. Let’s explore some pros and cons of two of your biggest costs: overtime and new hires.

Overtime Pros

Increased Productivity – Overtime can assure your orders stay on time, especially as production ramps up after being shut down for months. Projects sometime require more work than can be squeezed into a 40-hour week, so putting in the extra hours can keep you from falling behind and creating additional shipment delays with your client base.

Greater Employee Incentives – If you can afford the costs, overtime can help your employees earn more money, especially at an extremely challenging economic moment in our state’s history.

Overtime Cons

Employee Burnout – Working too many hours may cause employees to tire of their jobs too quickly, resulting in decreased productivity. A work and home life balance is essential to a happy, healthy employee. In a study about the impact of burnout, 95% of human resource experts acknowledged that burnout and stress sabotage workplace retention.

Unsustainable Long Term –While overtime provides a way to satisfy unexpected spikes in demand, it’s often not financially sustainable for meeting demand that persists. Since employers have to pay workers time and a half or double time for overtime hours, it can be costly to use overtime as a long-term solution to high demand, so assess on a case by case basis.

Now, how about new hires? Ask yourself the following questions. If you answer yes to more than one question, it may be time to consider expanding your workforce and adding new hires instead of relying on stretching overtime policies.

  • Is the company achieving steady growth that can support additional staff?
  • Are current employees working efficiently or are they overworked?
  • Should we restructure roles within the company?
  • Have we had to turn away new business?
  • Are we providing excellent customer service?

According to a recent study, the average cost-per-hire in the manufacturing industry is $5,159.

But still, the initial cost of hiring a new employee is nothing compared to what you can expect to pay later. Consider the additional costs of hospitalizations, workers compensation insurance, retirement plans and paid time off. The latest data from the U.S. Bureau of Labor Statistics finds employer costs for employee compensation averaged $38.20 per hour worked in June 2020. Wages and salaries cost employers $26.17 while benefit costs were $12.04. The average cost for health insurance benefits was $3.18 per hour worked. A benefits package that includes paid vacation and other perks increases your expenses, but it may also reduce turnover.

So what’s the right move for you?

Sitting down and crunching the numbers is the first step to determine what’s right for your business during these extraordinary times. You may be growing exponentially or you may be struggling to keep longtime staff onboard. Each situation in unique and you have to decide what will result in the highest rate of profitability for your business. As always, our dedicated team is standing by ready to help you troubleshoot these challenges and help you make the tough decisions that will help you succeed.

Telehealth: The Transformative Tipping Point

Telemedicine - Doctor on Laptop

If someone told you ten years ago that you’d be having your annual checkup with your family doctor while wearing your favorite sweatpants on the comfort of your living room couch – no audible waiting room music, cold stethoscope or examination table in sight – you probably would have laughed. Now, several months into the COVID-19 pandemic, telehealth is transforming the way we treat patients and the way we receive healthcare. Like many facets of life, something that once felt foreign and perhaps even impossible is being integrated into daily life, spanning all ages and socioeconomic backgrounds. In order to provide the best care to your clients and be prepared for what’s next in health technology, it’s important for you to stay in the know about all things telehealth in New York.

A recent report by The Community Health Care Association of New York State finds 88% of the state’s federally qualified health centers now deliver care remotely, up from just 35% in 2018. Additionally, The New York State Council for Community Behavioral Healthcare data recently found that telehealth comprised 90% of visits and 86% of revenue for behavioral health providers. But what happens when we finally have the pandemic under control and have a widely available vaccine? The reality is, telehealth makes healthcare more accessible and many feel it’s a welcome modern update. Advocacy groups like CHCANYS and The Council are calling on policymakers to make permanent telehealth measures and say doing so will help to address health disparities and barriers to care, aid in preventing avoidable conditions as well as higher costs, and ensure the financial stability of safety-net providers. This past June, Governor Andrew Cuomo signed a bill to expand the types of telemedicine services covered under Medicaid and the Children’s Health Insurance. Telehealth advocacy experts recommend that, post-pandemic, the state should continue to support a full range of telehealth modalities, including reimbursement for telephone visits and expanded Wi-Fi and cellular service in urban areas. They also urge keeping telehealth’s use at the discretion of clinicians in collaboration with clients, based on individual patient needs and capacity.

Financially? It more than makes sense. Telehealth visits have been a financial lifeline for providers that reported staggering declines in in-person care as a result of the pandemic and tens of millions of dollars in losses a week in some cases. Many are pushing for elected officials to maximize regulatory flexibility by expanding the list of licensed practitioners allowed to provide such care, not requiring in-person visits before remote visits and investing in workforce training and research to establish where telehealth is most impactful. In response to the unprecedented interest in, and need for, telemedicine access, the U.S. Department of Health and Human Services (HHS) temporarily eased or suspended a number of regulations related to telehealth. It’s no secret that the pandemic has exacerbated the ongoing mental health and substance use crises facing New Yorkers. Thoughtful, innovative combinations of technology and healthcare can serve as a crucial long-term tool.

We still have a long way to go, as a lot of fear and misinformation surrounds this emerging digital practice. An estimated 41% of U.S. adults had delayed or avoided medical care including urgent or emergency care (12%) and routine care (32%), because of concerns about COVID-19 according to the CDC’s most recent data. As we look towards the future of our nation’s health with uncertainty, many maintain the mindset that we must continue to strive to be better and do better. As a country, we have collectively come together in the darkest of days of the pandemic to advocate for patient care and cohesively meld health policy and government – a philosophy many hopes remains for generations to come.

When Shared Services Make Sense for New York Municipal Governments, and How to Build Foundations for Success

Shaking Hands

Local municipalities in New York searching for ways to save money in the face of the ongoing COVID-19 pandemic should take a hard look at whether sharing services with other local governments is feasible.

In 2017 New York launched its Shared Services Initiative, asking counties to convene shared services panels made up of city and village mayors and town supervisors, with school and special district officials if they wish.

The idea was to identify where sharing and coordination will create benefits to the parties involved and save money for taxpayers. The program also offers state matching funds for shared-services projects.

When does sharing make sense for a government?

The first step is getting a solid handle on costs and determining who might be a logical partner in sharing. There are political considerations, and employees may worry about losing jobs or responsibility, and residents may worry about the quality of service. If the county is a potential partner, some might worry about a county takeover.

Municipalities that try to consolidate police forces for example, often run into concerns of a loss of the local “cop-on-the-beat” touch of a small village department. However, sometimes those mergers do go through, as they did years ago in Warwick and Saugerties.

There are smaller ways to work together, too: The Town of Wappinger built an emergency services building which houses the local ambulance corps, and New York State Police rents space there for its zone headquarters. The troopers get a barracks; the Town gets police presence.

Successful sharing starts with drawing up a plan that creates a benefit for all partners. Good research takes the current services and costs, and projects the future needs for the service and costs to provide it. This is a process that involves looking forward to the long-term, not just to the past.

Once the government partners have a solid plan with research showing the benefits, they’ll need buy-in from officials who would have to approve the deals, and from residents who pay the taxes. To get that requires good communication of the process and the plan, and a clear explanation of how sharing services will benefit the communities involved.

Some counties jumped into shared services with gusto. In 2019, for example, Dutchess County worked up four projects projected for $2.3 million in savings for 2020 and going forward. The lion’s share of that, $1.4 million, comes from a joint drug task force combining the resources of the county’s sheriff’s office and district attorney, and police departments from the cities of Poughkeepsie and Beacon and the towns of Poughkeepsie, Hyde Park and East Fishkill.

Shared police dispatching by Hyde Park, the City of Poughkeepsie and the county account for another $769,000 in savings.

In Ulster County, a joint fire protection project between the Village and Town will save a projected $1.325 million, contracting the New Paltz Fire District to cover the Town, with the Town contributing toward a new firehouse to replace the old, obsolete sub-station building.

Other shared ventures in Ulster include multiple towns in a joint stormwater management education and outreach program, a distributed generation plan to reduce greenhouse gas emissions, and a countywide plan sharing highway and transportation equipment, personnel, and services.

Shared services proposals don’t have to be million-dollar deals. Smaller measures taken by neighboring towns, or a village and town, can reap smaller but still-appreciated savings for taxpayers.

With COVID-19 vaccines still in development and the pandemic still raging, local governments need cost-cutting measures. Sharing services with one or more partners can help municipalities save some money without resorting to more draconian cost-cutting measures.

Back to the Future: What Construction Backlogging Looks Like Into 2021

Buildings Through Magnifying Glass

It’s been a tough year. Every industry has had challenges, some unique and some universal. The pandemic isn’t over, so without a crystal ball, no one knows exactly how this will play out long-term. But what we can do is take a look at where the construction industry is at, and forecast projections for where we are heading so your business is better prepared to rise to the occasion.

While New York construction was deemed an essential service early on which helped many preserve employment, the field has yet to experience the aftershock of the pandemic – and that’s what is keeping industry experts up at night. Maybe one (or many) of your own projects is being pushed back, delayed, or canceled. If that’s the case, know you are not alone. The Associated Builders and Contractors recently reported that its Construction Backlog Indicator fell to 7.5 months in September, a decline of 0.5 months from August’s reading. Comparatively, backlog is 1.5 months lower than it was in September 2019. Contractors expect shrinking profit margins for the seventh consecutive month. This data is reflective across all markets and regions, but has been notably most pronounced in the West, likely due to the various economic and environmental factors facing the state of California. The commercial and institutional spaces, as well as infrastructure are being hit hardest by rapid backlog decline. Backlog is higher in the heavy industrial category, a segment that’s bouncing back thanks to a combination of inventory rebuilding, surging e-commerce demand and production reshoring stateside.

There are a lot of factors at play, contributing to high competition and decreased overall profit. The industry is experiencing fewer bidding opportunities, rising materials costs, tighter lending standards, weakened commercial real estate fundamentals, diminished state and local government financial health, and persistent difficulty in identifying and hiring sufficiently skilled and motivated workers. More than 75% of contractors say they expect profit margins to flat line or decline over the next six months. Now more than ever before, it’s important to reassess your overhead costs, and make timely, tough decisions regarding personnel and expenses. In less extreme financial times, you may have been able to put off making big cuts or drastic financial planning decisions, but today these choices can mean the difference between staying open and shuttering your doors indefinitely. It’s also important to be open to pivoting to where the work is, if your team has experience and can transfer your skillset to applicable areas of construction.

There is some positive news to report. Despite ongoing economic uncertainty as the pandemic lingers, staffing levels are expected to grow over the next six months as contractors strive to hold onto their workforce. Following the COVID-19 outbreak, many contractors have adopted new technology, a welcome update that is sure to advance companies for years. A majority of contractors surveyed (about 70%) do not expect the construction industry to stabilize until at least 2021 and nearly every construction market has a weaker spending outlook in 2021 than in 2020, because approximately 50% of spending in 2021 is generated from 2020 starts and 2020 starts are down. While instability is never fun for a business to navigate, now is the time to lean on the strong relationships you have built with your bank. Yes, hard times ahead may mean a credit line deduction, but banks have a history of working with clients who have established relationships. This will enable you to ride this wave and emerge successful. We will continue to monitor the industry and keep you updated with relevant and timely insights. As always, to discuss your financial future, please do not hesitate to contact one of our dedicated RBT professionals.

This Quick Read Could Save You Over $200,000

Business Woman with Money

You’re in an industry that’s moving a mile a minute. There are only so many hours in the day and there’s always more to get checked off the list, we get it.

In the midst of the COVID-19 crisis, utilizing resources to fund on-going operations and keep employees on the payroll is key. We know your time is valuable and you only have so many spare minutes to read newsletters. But before you jump back into your day: there’s free money your business may be eligible for and missing out on. Do we have your attention? We’re talking R&D credits. While this permanent tax credit remains the most powerful incentive available to American businesses, less than 5% of eligible businesses claim the benefits. Are you a part of the 95% missing out? To understand if you are missing out on a huge savings opportunity, consider these nine manufacturing activities that can qualify for the R&D Tax Credit:

  1. Sales Time (determining requirements, quoting, etc.)
  2. Design Meetings (collaboration among staff, etc.)
  3. Flat Blank Layouts (design modifications, etc.)
  4. Tool Making (design, build, tryout, etc.)
  5. Engineering Process (new equipment, shop redesign, etc.)
  6. Proof of Concept (process documentation, etc.)
  7. Trial Production Run (first run of a product, etc.)
  8. Quality Approval (PPAP, ISIR, etc.)
  9. Shipping (package design, etc.)

Let’s dive into a fifteen second history lesson to learn the backstory here: the R&D credit was established back in the 1980’s because Congress wanted to encourage domestic companies to create innovations to keep the U.S. competitive industry leaders. Due to a 2015 provision, more companies than ever are able to benefit from the R&D tax credit for research activities they’re already doing.

Why is the R&D Tax Credit so underutilized?

Many companies self-censor, or have applied for the R&D tax credit prior to the change in eligibility requirements and don’t realize they qualify. Every year thousands of small and mid-sized businesses nationwide miss out on these huge savings, leaving billions in federal funding untouched. Manufacturing companies often miss out on claiming R&D credits simply because they don’t recognize their work as being innovative. R&D credits are available for manufacturers who are taking steps to improve the manufacturing process by making it more advanced, environmentally friendly, and efficient.

There is an actual four-part test to see if your activities qualify for this credit. The IRS explains this in great detail but let’s break it down:

  • Permitted Purpose: is this going to be used in the business?
  • Technological in Nature: there has to be some “hard science” in this activity
  • Process Experimentation: testing, trial and error of the process
  • Elimination of Uncertainty: activities must attempt to eliminate uncertainty

The savings can be significant.

Startups and small businesses may qualify for up to $1.25 million (or $250,000 each year for up to five years) of the federal R&D Tax Credit to offset the Federal Insurance Contributions Act (FICA) portion of their annual payroll taxes. On average studies find $20,000 to $40,000 of savings per every million dollars in total company payroll. Plus, this credit is recurring. For as long as a company continues to produce products, this credit can be taken every tax year. There is absolutely nothing to lose by exploring the R&D credit for your company. Numerous manufacturers have been able to grow their business, maintain their competitive edge in the industry, add new jobs and prevent lay-offs because they looked into the R&D tax credit and discovered they qualified for a substantial return. Call an RBT team member today to learn more about whether or not you qualify.

How Municipalities Can Issue Debt to Raise Cash Under Current New York Law, and Why it Could Make Sense for You

Government Officials Meeting

COVID-19 has left many New York municipalities short on cash as they grapple with a triple threat: falling sales tax revenues, holds on state aid, and unexpected expenses due to the pandemic. Short-term borrowing strategies can provide local governments with the funds to stay afloat until property tax payments or other revenues arrive to replenish the coffers.

There are two main reasons a municipal government might issue short-term debt: because of revenue shortfalls, or because there has been an unforeseen expense. During the pandemic, many municipalities have seen both. Despite taking other budget-reduction steps, such as curbing spending, offering retirement or separation incentives, or cutting staff, some governments are still facing shortfalls of tax or fee revenues.

“After exhausting other available options, governing boards may need to consider issuing some form of short-term debt in order to generate sufficient cash flow to meet the operational needs for the remainder of the year,” reads a section in The Office of the State Comptroller’s Financial Toolkit for Local Officials in 2020 and Beyond, which recommends consulting with financial and legal professionals for guidance.

The main avenues for short-term debt issuance to address those issues are tax anticipation notes, revenue anticipation notes and budget notes. In dire cases, a municipality may also use deficit financing, also known as a deficiency note.

Tax anticipation notes, known as TANs, are borrowed in anticipation of the collection of the next year’s property taxes, which are generally due in January for counties, cities and towns; or against assessments. Generally, the OSC says, the funds from TANs may only be used for the purposes for which the tax or assessment funds they’re borrowed against would be used.

Revenue anticipation notes, or RANs, are borrowed to generate cash flow in expectation of receiving certain specific revenue types, such as sales tax payments or a particular grant. RAN proceeds may be used to meet expenses payable from the revenues they are borrowed against, according to the OSC.

Budget notes are generally used to finance an unanticipated expenditure, particularly if the municipality was already experiencing a bad year. Budget notes may be used for “any object or purpose for which a local government is authorized to expend money” according to the OSC, and they provide cash that can be used to finance increased appropriations. Budget notes must be used for the purpose specified by the municipality.

The timing on a budget note affects when it must be paid: Adopt and issue the note before adopting the next year’s budget, and the municipality must pay it next year; issuing a budget note after the budget is adopted buys an additional year.

To pursue a TAN, RAN or budget note, a municipality would solicit rates from banks, much as it would when issuing a bond anticipation note for a capital project. The governing body must authorize issuance of the debt, and the bond or debt resolution must include the interest rate, due date, and other details.

The fourth option, deficit financing, is a last resort when there is a deficiency of funds due to lower-than-anticipated revenues for that year’s budget. Local Finance Law imposes strict requirements on the form of the resolution that a local municipality or school district must adopt to issue a deficiency note. If a renewal is required or if the unit of government must issue another deficiency note the next year, state law triggers monitoring by the Office of the State Comptroller and requirements to file regular reports.

Many municipal governments in New York have found themselves in tight budgetary times due to the strains of the COVID-19 pandemic and shutdown, but careful and creative issuance of short-term debt can help them weather the crisis in a fiscally responsible manner.

Slow Speed Ahead: What Supply Chain Delays Mean for Construction Recovery

Construction Delays

From inclement weather, to strict building code regulations, a shortage of skilled workers, material cost increases, and supply chain disruption – a lot of variables threaten to slow down the completion of construction jobs in the Northeast.

Not to mention, these roadblocks exist before factoring in the COVID-19 pandemic that has rocked the world economy. So, what happens to construction job completion timelines in New York when the global supply chain experiences shortages, delays and total operational shutdowns? Let’s dive into the lasting effects the construction industry is dealing with, and contemplate what lies ahead.

Many have drawn parallels between The Great Recession of 2007 and the pandemic we are currently experiencing.

The main difference: COVID-19 didn’t just disrupt the U.S. economy, it threw a wrench into the global supply chain process. There is also an acute uncertainty surrounding the possibility or inevitability of a second wave of COVID-19 later this year and into 2021. Contractors are left to navigate constantly changing safety protocols mandated by local and state government. In some instances, this means contractors must prepare for automatic project delays caused by social distancing measures and decreased worker capacity on job sites.

Contractor expectations of recovery vary by region.

The most recent survey conducted by The Associated General Contractors of America found because of the pandemic, 60% of responding firms have at least one future project postponed or canceled, while 33% reportedly have projects halted altogether. The share of firms reporting canceled projects has nearly doubled since the survey AGC conducted in June. Specifically in the Northeast, 45% of AGC survey respondents expect it will take more than six months for their firm’s volume of business to return to normal, while those in the West, South and Midwest expect they will bounce back faster.

Work is resuming.

New York updated its “essential businesses” considerations back in April to include not just healthcare facilities and emergency repairs but roads, bridges, some public school projects, municipal facilities, and energy projects as well. As of June, 33,556 previously closed non-essential sites were allowed to resume construction activity as part of the Phase 1 reopening, according to the New York City Department of Buildings. But global manufacturing plant shut downs meant tacking on additional weeks or months long delays on the local level. In the roofing industry for example, production in mainland China – where nearly 70% of the world’s solar roofing panels are manufactured – was completely shut down in the spring. Production of aluminum, plastic, slate, timber and rubber all declined worldwide since the early weeks of the outbreak.

So is there light at the end of the tunnel? The problem is that we are currently in the middle of the tunnel.

As the world waits on a reliable, widely available COVID-19 vaccine, only time will tell. But according to the most recent JP Morgan survey released this September, August saw manufacturing output increase for the second month running, following a five-month sequence of decline. Production rose and growth accelerated to a 16-month high at consumer goods producers and to 30- and 23-month peaks in the intermediate and investment goods categories respectively. China, the US, Germany, the UK, India and Brazil were some of the larger industrial nations to register expansions of output during August.

The long-term effects of the current crisis have yet to play out.

Contractors that double down on innovation efforts like a heightened focus on lean construction, workforce training or remote collaboration technology, will emerge more resilient. The best defense for contractors of any size operation is to actively evaluate their own supply chains to pinpoint vulnerabilities, identify potential alternative supply sources, prepare for steady cost bumps, and make sure they have adequate provisions in their contracts to protect themselves from the interruptions the ongoing coronavirus crisis creates.