NEW YORK CITY-As of Wednesday morning, New York State will have elected its next governor and most likely chosen quite a few new legislators to replace the incumbents. Among the challenges confronting the lawmakers when they convene in January will be a projected $9-billion budget deficit for fiscal 2012 and the dubious distinction of presiding over a state that ranks last in the latest State Business Tax Climate Index.

The state has been bouncing along the bottom of the Tax Foundation’s index for at least the past five years, so its new low came as little surprise. (Second worst for a business-friendly tax climate this year was California, while New Jersey actually improved its standing somewhat; it had been in last place for three consecutive years.) In a statement issued last month, Kenneth Adams, president and CEO of the Business Council of New York State, called the ranking “another clear message that business as usual must end in Albany.” And Steven Spinola, president of the Real Estate Board of New York, tells GlobeSt.com, “We in the State of New York tend to be number one when it comes to taxing.”

To help overcome that dead-last ranking and improve its competitive posture, REBNY is advocating attention to a number of tax areas. “The tax surcharge on high income earners runs through 2011,” says Spinola. “So one of the important messages to the business community is: will the State Legislature let that expire, or will they extend it and continue to send a negative message that New York is not very receptive to businesses and high income earners staying here?”

Resolving that tax question, he says, is tied to how the new governor and legislature resolve the budget shortfall now predicted. “What we’ve seen over the past two years is a series of tax increase and higher spending,” says Spinola. “We cannot do that. It will be a terrible message to the business community if the legislature continues to spend at a higher level than it did last year, and the only way it can keep doing that is to impose new taxes or fees. That will drive businesses out of the state.”

The polls hadn’t closed when GlobeSt.com interviewed Spinola Tuesday afternoon, but he was assuming that frontrunner Andrew Cuomo would win the governorship--an assumption that proved accurate when election results came in Tuesday evening--and Spinola is confident that Cuomo is on the same wavelength when it comes to taxation. “He has said over and over that we cannot increase taxes anymore, and we cannot increase spending,” Spinola says. “It’s the kind of message that the business community wants to hear, and I believe he is sincere in his commitment to hold the line on increased taxes and spending.”

REBNY’s legislative agenda for next year is still being formulated, but Spinola cites “a number of issues which must be addressed” to incentivize businesses in the state and city. Among them is the 421a program to encourage residential development in New York City, due to expire at the end of this year.

“There will be a need to extend that program, and we have recommended some modifications,” Spinola says. These changes to 421a, he adds, are intended to preserve affordable housing and encourage developers to pick up where they left off on stalled projects, which the city’s Department of Buildings says exceed 700 citywide.

On the commercial side, the ICAP (Industrial and Commercial Abatement Program) initiative is due to expire this coming March. It primarily applies to projects in the boroughs outside of Manhattan, and REBNY puts ICAP on its must-do list as well.

Also in need of legislative attention is the state’s current rent regulation framework, which expires at year’s end. “That will need to be extended or modified in some way,” says Spinola. “We’ve been talking to legislators about that, as well as the other two pieces that have expired or will expire.”