In a town where superlatives flow unabated, perhaps at no greater intensity than the days that follow a state budget deal, its time for a reality check.
Albany has a small business problem.
This is not a new problem that appeared overnight. Frankly this is a long standing issue that has slowly simmered for decades and every now and then reaches a breaking point.
We are now close to that point.
When you look at the facts and examine the issues outside the proverbial vacuum, it becomes clear that for every legislative “achievement” aimed at reforming New York’s business climate or tax code, small businesses are receiving minimal benefits while being forced to deal with the maximum struggles.
This most recent escalation of Albany’s small business problem starts with the minimum wage increase last year. While some of the bigger box stores and major manufacturer’s could absorb an increase, small businesses are dealing with the blunt impact of the hike. Yes, it is going to be phased in and was not indexed to inflation, but minimum wage (labor costs) are a crucial cost driver that is hampering small business.
After the minimum wage debacle and perhaps as a counter to some constant criticism that Albany had yet to push a comprehensive business-centric initiative, Tax-Free or now Start UP NY appeared in the closing days of session last June.
No taxes?! Albany is finally listening and cutting taxes?! Hold the phones!!
Well, not really. Albany must have found dealing with the current tax structure would be too complicated, so the push was to offer massive tax breaks for businesses not yet here in the comfy business confines of New York. So while main street got handed a minimum wage hike, Albany is offering a major handout to entice entrepreneurs to move to New York. Political simplicity at its finest.
Imagine how that sits with small businesses.
Albany then turned its attention to cutting taxes for businesses actually in New York in 2014. Through public hearings, tax commissions, a budget process and no shortage of positive soundbites, what did we end up with? A very muddy mixed bag.
We have a property tax freeze (really a rebate check scheme) that may help some communities, will minimally help others and by the way, do absolutely nothing to help reduce property tax costs for small business.
Then we have a corporate tax cut which will reduce taxes for big business and some small businesses, but not the majority. While this is positive, it holds scattered positive impact for mom and pop businesses.
A much needed estate tax reform. Ok, I’ll give that one it’s proper due. This is very helpful to family owned businesses and farms and perhaps the one small business specific reform in the entire package.
And finally, substantial tax reform/reductions for New York’s manufacturers. Definitely a part of New York’s economy, particularly in upstate New York, that could use a infusion of cost reductions.
Now NFIB/NY supported three of those initiatives while strongly opposing the property tax scheme. We also continuously called the plan incomplete and pushed to broaden the impact. Perhaps it was deaf ears or maybe hubris, but the plan unfortunately remained largely as proposed. And while it is positive that Albany focused on cutting taxes and helping restore some fiscal flexibility for businesses, once again small business is left searching for the maximum impact of this reform.
This is where Albany’s small business problem is coming to a head. Too often, particularly in an election year, small business is a popular soundbite. What has Albany done specifically for small business? Little.
Our members do not have time for soundbites. They have heard them for far too long and seen far too little actual positive action. Small business cannot continue to be the altar where progressive new mandates are laid upon while big business gets all the tax breaks.
Albany needs to understand that one out of five New Yorkers work for a business that employs twenty or fewer. Albany needs to come to grips that for all the talk of righting the course for business in New York, there has not been much done for main street. So for all the TV commercials and commentary that this is a “new NY” or that the trajectory is changed for business, the fact remains that while maybe true for some, it is false for small business. This isn’t being negative for the sake of being negative. This is being nuance free and offering a reality check.
To be fair, some lawmakers understand this and have pushed to reduce the tax and regulatory burdens on main street. We know who they are and appreciate their efforts.
But the fact remains.
Albany has a small business problem and it is up to lawmakers to decide if it continues to boil these last two months of session.