New York Senate Launches Campaign for $1 Billion Tax Cut
The Republican majority in the New York State Senate has launched a campaign for a package of tax cuts and tax credits it says would be valued at $1 billion when fully effective. The campaign will continue into the 2005 fiscal year because of legislative delays.
"Some critics might say it's late in the session to be talking about tax cuts, but there is never a bad time to cut taxes," Senate Majority Leader Joseph Bruno (R-Brunswick) said at a June 15 news conference touting the plan.
"With our package we're helping small high-tech and biotech firms stay and grow in New York and create new jobs," Bruno said. "We're helping small businesses afford the cost of providing health insurance to their employees. We're helping families that have to take care of elderly loved ones in their home. As we move forward on a new budget, we will work to see that it includes these tax cut provisions."
No Budget in Place
The 2004 legislative session ended on June 23 with no agreement on a state budget, which under provisions of the state constitution should have been in place by April 1, and no major action on any of the top priorities of New York's business community. The Senate concluded business a day early, a day legislative leaders had set many months ago for the close of the session.
The Senate's tax cut package would provide a small business health insurance tax credit, a new research and development tax credit for companies in high technology or the life sciences, and new tax credits for the film and television industry in New York City.
The Senate majority has estimated there are about 400 firms in New York eligible for the credit. The tax cut package would save them some $56 million in fiscal year 2004-05, and about $1 billion when fully phased in, a news release issued by the Senate majority said.
"We're pleased the Senate is considering ways to help New York businesses, and the effort to make health insurance more affordable for our smallest businesses is especially welcome," said Daniel B. Walsh, president of the Business Council of New York State.
"As the Senate pursues this worthy agenda," Walsh continued, "we hope they and their colleagues in the Assembly will also focus attention on additional measures that are absolutely necessary to cut New York's already high costs of job creation. Lawmakers absolutely must reduce our state and local tax burden, and the costs of workers' compensation, energy, and health insurance for all employers and all New Yorkers."
Help for Venture Capital, Small Business
The Senate proposal also includes an investor program designed to encourage venture capital companies to invest in enterprises through Excell-NY, a proposed economic development program that would focus on large-scale manufacturers with a research and development focus. According to the Senate release, the program would allocate $200 million in investment funds and provide companies with tax savings of $20 million a year beginning in 2005.
The health insurance tax credit is designed to encourage more small businesses to provide health insurance for their employees. The Senate plan would provide a tax credit of 50 percent of the cost of insurance premiums to companies with 50 or fewer employees and earned net income of $290,000 or less, which is how state tax law defines a small business.
The Senate tax plan also includes the following:
- A 10 percent tax credit for production costs of new film and television series produced in New York state.
- A 20 cents-per-gallon tax incentive for New York's biofuel production facilities. The tax incentive will save biofuel customers $20 million a year by fiscal year 2007-08.
- A plan to eliminate taxes on aviation fuel used after planes take off. The Senate plan also proposes the elimination of taxes on all kero-jet fuel and aviation fuel by next year, with an estimated savings to the aviation industry of $9.5 million.
- Elimination of the alternative minimum tax for farms. The plan also would refund the investment tax credit, to provide $2 million in capital for New York farmers.
- A 15 to 25 percent tax credit to provide taxpayers and homeowners with an economic incentive to purchase and rehabilitate a historic home.
- A sales tax exemption on the value of coupons. Consumers are currently taxed for the full cost of the item purchased, despite any coupons used. This exemption is expected to save consumers $15 million.
- An investment tax credit to textile manufacturers for investing capital in New York state.
- A sales tax exemption for the service of inflating tires from coin-operated machines.
Before closing their 2004 session, New York state legislators passed a temporary spending plan to get the state through August 1, when they will take up the budget again. They also passed a measure aimed at ensuring on-time budgets in the future.
Matthew Maguire is director of communications for the Business Council of New York State. His email address is email@example.com.