Yesterday, Governor Cuomo delivered his fourth State of the State address. It was a panacea of proposals covering the entire spectrum of public policy. NFIB/NY’s response was generally positive and receptive to the tax and regulatory reform proposals, with some caveats.
Starting with the regulatory reform…
New York’s onerous regulatory climate has long been a deterrent to economic investment and success. It is unquestionably correct that the Governor focus in this area. Coming off 2013’s success in enacting necessary reforms to workers compensation and unemployment insurance, there is some positive momentum here. The Governor announced that there will be a “task force” or commission type entity announced in the near future to focus on regulatory barriers. Perhaps the Governor has such a committee already in place that could be well suited to this effort?
Now for the tax reform piece.
NFIB/NY strongly supports the business tax cuts (no surprise). Reforming the estate tax is critical for our family farms and small businesses in general. Manufacturer’s, particularly in Upstate New York, would see a – pardon the “Albanyism” – “game-changing” tax cut and the corporate rate would be reduced. All three of these proposals are within NFIB/NY’s 2014 legislative agenda.
NFIB/NY strongly opposes a “circuit breaker” tax shift concept and we explicitly state this position in our legislative agenda. We have been championing the call for significant mandate relief since the property tax cap was enacted in 2011. A “circuit breaker” will NOT reduce the property tax levy at all, only shift payment responsibilities. Hence, where’s the mandate relief?
Would enacting a “circuit breaker” reduce the likelihood moving forward that any more mandate relief discussions would take place? How will it alleviate the crushing fiscal crisis our communities and schools are facing? Will allocating state funds to enact a circuit breaker reduce the potential for tax cuts in the near future?
Today, the Poughkeepsie Journal editorialized that the tax relief plans should be open to debate and discussion rather than passed as is. We agree. The rhetorical questions I asked above need to be answered and thought through.
Also, the majority of small businesses are set up as pass-through entities. Meaning, business owners pay their business taxes through their personal income tax filings. Absent broad tax relief that includes a PIT reduction, many small businesses will be left out of the substantial tax reform put forth by the Governor. This cannot be immediately acceptable.
If we can get lawmakers and the Governor in Albany to open up the discussion on tax reform, perhaps we can broadly ensure that our fiscal and economic present and future is both enhanced and received by all. The Governor has already put us on an ambitious path to tax reform, NFIB/NY is going to push to see that these proposals have an even greater impact.