JANUARY 1999Governor promises $1 billion tax-cut plan in his budget
Personal-tax reduction would help families, small businesses; more cuts to follow
Governor Pataki announced today his proposed budget for 1999-2000 will include new tax cuts of $1 billion, including reductions on both personal income and business taxes.
The Governor released details of his new personal-income tax reduction proposal, which would save families, individuals and small businesses $600 million a year when fully effective.
"Our tax cuts have worked to make New York a stronger state," the Governor said at an afternoon news conference in the Capitol.
Tax cuts already enacted - affecting taxes on personal income, businesses, energy bills and estates - are a major reason the state's economy is growing at its most rapid pace in a decade, he said.
"Today, we are building on that historic progress and providing even more relief to hard-working New Yorkers," the Governor said.
Today's proposal includes two major elements:
- Raising the income threshold at which the top tax rate of 6.85 percent takes effect - in the case of married filers, for instance, from $40,000 to $60,000.
- Doubling the exemption for children and dependents, from $1,000 to $2,000.
The proposals would help families as well as tens of thousands of small-business owners who pay business taxes through their personal taxes.
The Governor's new plan would start to take effect in 2002, with full implementation the following year.
Assembly Minority Leader John Faso, who has pushed for tax cuts similar to those proposed by the Governor, called the plan "a very family-friendly program that people all across New York State will support enthusiastically."
Governor Pataki said his new budget will propose a total of $1 billion in new tax cuts to take effect over several years. Details of other proposals, including business tax reductions, will be announced in the days before the January 27 budget introduction, he said.
The Governor said he will call for setting aside this year's entire surplus, projected at $1.75 billion, to ensure that tax cuts scheduled in coming years take effect even if the economy slows.
"The tax cuts will not create a problem two years down the line," he said in response to a reporter's question, because the reductions are "funded by controlling spending."
Senate Majority Leader Joseph L. Bruno has proposed a wide-ranging package of business and other tax cuts totaling $795 million a year.
The Senate proposal would reduce bank and insurance tax rates from 9 to 7.5 percent, to preserve parity with the corporate tax rate; cut the gross receipts tax on utility customers another half-percent; and avert unlegislated tax increases on utilities that would take effect due to restructuring of the electrical industry.
Assembly Speaker Sheldon Silver has said he will propose targeted tax cuts to help stimulate growth in high technology and small businesses.
"Governor Pataki's commitment to further, major tax reductions is indeed good news," said Daniel B. Walsh, president of The Business Council.
"The tax cuts already enacted by Governor Pataki and the Legislature are paying huge dividends in new business investment and job growth," Walsh said. "More tax cuts will mean still more new jobs."
The proposal would save $327 a year for a married couple, with two children, earning $100,000 a year; savings would be $261 a year for a couple with earnings of $70,000.
Other tax cuts taking effect in the coming year include reduction in the corporate tax rate; elimination of New York's extra estate tax; and further reductions in the gross receipts tax, the alternative minimum tax on corporations, the S-corporation differential for small businesses, and assessments on medical providers.
Click here for the Governor's press release.
January 19, 1999