Cuomo targets foreign investment in 2014
In his fourth State of the State Address in Albany, Gov. Andrew M. Cuomo outlined a broad agenda that builds on the achievements of his first three years in office and includes a legislative package that would provide more than $2 billion in tax relief to New York businesses and residents.
The governor announced the launch this year of “Global NY,” an effort to attract international investment, grow exports and create jobs upstate using his Start-Up NY program, a plan launched last year to build partnerships between business and academia by offering eligible companies tax-free space on or around state and private college campuses.
The state”™s 10 regional economic development councils, created by Cuomo in his first year in office, this year will look to incorporate global marketing and export strategies in their economic development plans as they compete in a fourth round of state funding.
The governor said he would host a Global NY Summit on World Trade and Investment this year to reach foreign investors and create a peer learning network among local and regional leaders.
Cuomo”™s tax relief proposal includes several hundred million dollars in estimated cumulative savings for the state”™s business sector.
The governor proposed to merge the bank tax into the corporate franchise tax and reduce that tax on corporations from 7.1 percent to 6.5 percent, the lowest rate in 46 years, at an estimated savings of $346 million annually for businesses.
For manufacturers, Cuomo proposed a refundable credit against corporate and personal income taxes equal to 20 percent of a company”™s annual real property taxes. The credit would provide $136 million in tax relief to the sector and stimulate growth among manufacturers currently operating in the state while attracting new businesses to upstate regions and metropolitan New York, he said.
He further proposed to eliminate the corporate income tax rate for upstate manufacturers, saving an additional $25 million in tax payments for those businesses.
Cuomo wants legislators to immediately eliminate the 2 percent temporary utility assessment levied on commercial utility bills for industries and accelerate the assessment”™s phase-out for other customers. The measure would save businesses and residents $600 million on energy bills over the next three years, he said.
For residents, the governor proposed state tax rebates to homeowners to freeze their property tax levels for two years. The first-year rebates would be available only to residents of a taxing jurisdiction that stays within the state”™s 2 percent property tax cap. In the second year, rebates would be provided only to homeowners in municipalities that stay within the cap on annual property tax increases and also agree to implement a shared services or administrative consolidation plan with other taxing authorities.
Cuomo said the rebate program when fully implemented would provide nearly $1 billion in relief with an average benefit of about $350 for each of nearly 2.8 million homeowners. The current average residential property tax bill statewide is $5,040, the highest in the nation, he said.
Legislators also will be asked to approve a property tax “circuit breaker” measure for low- and middle-income taxpayers that would provide refundable tax credits when those taxpayers”™ real property tax rate relative to income exceeds their income tax rate. Households earning up to $200,000 and within municipalities that adhere to the 2 percent property tax cap would be eligible for the benefit.
The governor”™s proposal also calls for more than $400 million in refundable personal income tax credits for 2.6 million renters with annual incomes below $100,000 and reforms to the New York estate tax that would exempt nearly 90 percent of all estates from the tax.
Cuomo said the tax relief measures would be funded by an expected $2 billion state budget surplus.
Cuomo in his address laid out several other proposals to spur business growth and investment in the state. They include:
Ӣ Creating a joint executive-legislative commission to identify ways to reduce regulatory barriers to business.
Ӣ A new Upstate-Downstate Food-to-Table Agriculture Summit this year to connect the stateӪs agriculture industry to downstate consumers and markets.
Ӣ Appointing a Gaming Facility Location Board to select developers bidding to build casino resorts in the Catskills and other upstate areas.
Ӣ Build on the number of minority- and women-owned business enterprises in state contracting by adding 2,000 MWBE-certified firms in 2014.
Ӣ Establish a 5 percent goal in the awarding of state contracts to small businesses owned by military veterans disabled in service. The governor also will convene a Veterans and Military Families Summit to address issues unique to those New Yorkers.
Westchester County Association President William M. Mooney Jr. in a statement said the governor”™s effort to reduce local government spending by limiting the proposed two-year freeze on residential property taxes to municipalities that stay within the tax cap and agree to cut costs by consolidating or sharing services with other municipalities is “a good thing” but not enough without relief from unfunded state mandates for local governments.
Unfunded mandates, such as pensions and health care coverage for public employees, are “the real driver of property tax increases,” he said. “Without mandate relief, the governor”™s property tax proposal can only go so far.”
Mooney said Cuomo”™s Global NY initiative, which will be led by former Morgan Stanley CEO John Mack and overseen by Empire State Development, should support the growth of foreign trade in Westchester as well as upstate. The governor in his address expressed his hope that foreign offices will take root in economically distressed upstate communities.
“We like much of what Gov. Cuomo has put on his agenda, and we will actively support the initiatives that hold the most promise for Westchester and our region,” Mooney said.
Marsha Gordon, president and CEO of The Business Council of Westchester, in a statement said she is encouraged by the governor”™s efforts to make New York more business-friendly by cutting taxes, investing in workforce development ”“ particularly his proposals for women and minority-owned businesses, disabled veterans and youth ”“ and for his continued work with the regional economic development councils.
“The Business Council supports serious efforts to reduce the tax burden on New York businesses and property owners and stands ready to work with Gov. Andrew M. Cuomo and state lawmakers on this very important priority,” Gordon said. “Whether it”™s lowering corporate, income, estate, property and energy taxes, reducing regulatory barriers on businesses, addressing state-mandated costs on local governments, modernizing our infrastructure or investing in innovative businesses, achieving these goals must be a priority in the state Capitol so that businesses all across New York can expand, thrive and succeed in the years to come.”
Heather C. Briccetti, president and CEO of The Business Council of New York State Inc., in a statement called Cuomo”™s tax relief proposal “big news for the state”™s economy, especially upstate, as this package will provide broad-based business tax relief and support key business sectors across New York.”
“The importance of the tax relief component for manufacturers cannot be overstated,” she said. The loss of manufacturing jobs is one of the main reasons the upstate economy has struggled. This is an important step in the right direction for upstate, and New York as a whole.”