Cuomo proposes small-business tax break in address
In a combined State of the State and budget address that drew on his late father”™s stirring oratorical legacy, Gov. Andrew Cuomo outlined a 2015 “opportunity agenda” for the state that includes lower income tax rates for some small businesses and another raise in the state”™s hourly minimum wage that is opposed by one of the state”™s largest business groups.
Cuomo, whose State of the State speech was postponed earlier this month due to the death on Jan. 1 of his father, former Gov. Mario Cuomo, also proposed to award three funds of $500 million each in an upstate New York economic revitalization competition that would pit the seven-county mid-Hudson region against the Albany capital district and five other regions.
Cuomo proposed to phase in over three years a 4 percent cut in the state”™s corporate franchise tax on small businesses. The tax, currently at 6.5 percent of net income, would drop to 2.5 percent in the 2018 tax year, providing an estimated $32 million in tax relief when fully implemented. The tax rate would be set at 3.25 percent for the 2016 tax year and 2.9 percent in 2017.
In a weeklong rollout of the re-elected governor”™s 2015 agenda leading up to his Jan. 21 speech in Albany, the governor”™s office said businesses qualifying for the lower corporate franchise tax must have fewer than 100 employees and a net annual income less than $290,000. The rate would be phased up to the standard 6.5 percent rate for businesses with net income of $390,000 or more.
The governor”™s office said the franchise tax rate will fall to the lowest since 1917, when the tax was enacted.
Saying that already approved hikes in the state”™s hourly minimum wage ”“ to $8.75 this year and $9 in 2016 ”“ are not enough to cover workers”™Â food and rent costs and keep them out of poverty, Cuomo in his speech proposed to raise the statewide minimum wage to $10.50 by the end of 2016 and to $11.50 in New York City. The proposal received mild applause from his audience in Albany.
The head of The Business Council of New York State in advance of Cuomo”™s address said the additional $1.50 hourly hike proposed by the governor would be “extremely difficult for businesses to implement.”
“The end result will be fewer jobs created and potential job losses that will adversely impact both small businesses and entry level workers,” said Business Council President and CEO Heather C. Briccetti.
Cuomo earlier announced his plan to create NY Business Express, described as a one-stop shop to help small businesses get started and grow and to more easily navigate the licensing and permits process of various state agencies.
Cuomo said the state will create a single online portal for all business and occupational licensing activities. It would include a new consolidated business application, similar to the consolidated funding application implemented four years ago by the Cuomo administration to speed state agencies”™ review and awards of funds for public and private economic development projects.
The state will also provide a single phone number for all business questions and support services and a single cross-agency team to handle business starts and license processing.
The governor said he will appoint the state”™s first chief small business officer, responsible for coordinating between agencies all new and existing policies affecting the start and growth of small businesses in the state.
Como proposed to use $1.5 billion of the $5.4 billion in legal settlement funds received by New York for a regional competition to fund development projects that focus on strengthening critical infrastructure, revitalizing communities, bolstering workforce development, growing tourism and improving quality of life, according to the governor”™s office.
The competition will draw on the state”™s 4-year-old Regional Economic Development Councils to develop regional investment plans. It will incorporate elements of the Buffalo Billion investment development plan announced by Cuomo in 2012 and created the following year by the Western New York Regional Economic Development Council.
Cuomo”™s office said the Buffalo Billion initiative has spurred $11.3 billion in regional private investment in the last three years and has brought nearly 3,800 jobs and 812 new firms to western New York, resulting in a 4 percent increase in total regional wages.
The mid-Hudson council and region will compete for one of three $500 million awards with the Capital Region, Mohawk Valley, Central New York, North Country, Southern Tier and Finger Lakes. Cuomo this month named Richard Tobe, deputy Erie County executive, to direct the competition and upstate revitalization program.
Cuomo in his address said the state will capitalize a $35 million Global NY Export-Import Bank to enable more New York-based companies to export their products to established and emerging markets. The bank will provide grants and loans to small- and medium-sized businesses.
Cuomo said New York in 2015 aims to award 30 percent of state contracts, or about $2.4 billion, to minority-owned and women-owned businesses, the highest percentage awarded in the nation. New York last year awarded 25 percent of its state contracts, or $2 billion, to minority and women business enterprises, he said.
John Ravitz, executive vice president and chief operating officer of The Business Council of Westchester, was among the region’s business leaders and elected officials who traveled to Albany for the governor’s annual address. In a statement issued after Cuomo presented his “opportunity agenda,” Ravitz said the Business Council “welcomes serious efforts to relieve the burden on New York business and taxpayers, as well as significant investments in the state”™s infrastructure, particularly the $1.3 billion the governor designated for the Thruway system and for the Tappan Zee Bridge.”
“Unfortunately, I would have liked to have heard a greater emphasis on real mandate relief and reforms to important issues such as the Scaffold, Wicks and Taylor laws, which would translate into substantial savings for New Yorkers,” Ravitz added. Â “The Business Council of Westchester will continue to urge the governor and Legislature to address these important issues during this year”™s legislative session.”