Senate Tax Bill
May 9, 2001
The Business Council supports S. 3341 / A. 1644, legislation which amends the Public Health Law and the State Finance Law to provide Statewide Planning and Research Cooperative System (SPARCS) information on hospital emergency room visits. For the past decade, The Business Council has sought to provide greater health care information to employers and employees across the state. The Business Council has been a leading voice calling for more information for consumers so they can better compare hospitals. We have called for more information to compare physicians and more data to compare health maintenance organizations. Due to this work, and the work of various health advocacy groups, New York has made tremendous steps forward. In this age of information technology, more can be done. Easier access to essential data is critical if consumers are to make informed decisions about their health-care and if we are to see improvements in the quality of care that is provided. The Patient Health Information and Quality Improvement Act of 2000 is a landmark piece of legislation that will empower employers and employees to better choose between HMO's, hospitals and physicians. We are pleased that hospital report cards, envisioned in the Health Care Reform Act of 1996, will get back on track. There remains at least one glaring omission – the lack of any meaningful data on what takes place at the emergency room. It seems obvious that the lack of comparative information on emergency room visits can lead to disorganization and unintended medical consequences. Making this data a regular part of the SPARCS system is a common sense approach to improving health outcomes for the population. Too often the uninsured need to make use of the emergency room. Too little is still known about the health outcomes of those populations and whether different intervention policies could provide better and more cost-effective health-care.
One of The Business Council's health goals is to improve the public health of New York's citizens. That is why The Business Council was a founding member of The New York State Public Health Partnership and why we have supported hospital report cards and physician profiles. That is why today, we call on the legislature to extend the SPARCS system to emergency room visits.
This bill would encourage economic growth in New York State through substantial tax reductions and the implementation of other pro-investment policies. The Business Council supports this bill for a number of reasons:
- It promotes capital investment and the retention and expansion of jobs in New York State through a change in the corporate income tax allocation formula to a sales-only factor, the elimination of the alternative minimum tax, the broadening of the uses of the investment tax credit and the expansion of the state's Empire Zones.
- It will promote the creation of high tech jobs in New York, particularly in biotechnology through creation of new Gen*NY*sis Zones and by raising the Research and Development Investment Tax Credit to twenty percent.
- It refinances the state's Superfund program through the dedication of existing Article 9-A tax revenues, thereby avoiding the need for new, targeted business fees.
- It assists small businesses by creating a ten percent tax credit for companies who provide health insurance to their workforce and allows vendors to retain a greater percentage of sales tax collections.
- It makes other important changes to tax policy affecting the state's transportation and telecommunications infrastructure by eliminating the petroleum business tax on kero-jet fuel, changing the real property tax treatment of railroad property and eliminating the minimum tax on the net value of capital stock for telecommunications companies.
Current tax policies: The state's current corporate income tax code has become antiquated. The corporate income tax allocation formula actually penalizes a company for locating investment and jobs in the state. A growing number of states are moving away from the traditional allocation formula that weighs a companies sales with the value of their property and payroll. Also, the existence of an alternative minimum tax in the current tax code serves as an artificial barrier to capital expansion in the state. This bill wisely eliminates these disadvantages and modernizes the tax code to be more pro-active in supporting economic growth in the state.
A study by The Public Policy Institute of New York State, The Business Council's research arm, found that applying the single-sales factor to all businesses would add 133,000 new jobs over three years while increasing state revenues. We would suggest that Senate budget conferees consider speeding up the transition to a single sales factor bill similar to the schedule found in Senate Bill 2064-A by Senator Skelos. This change, in combination with the elimination of the alternative minimum tax, will be a clear sign to the state's business community that the state is serious about attracting a greater share of the nation's job growth.
Research University Business Initiative: One bright spot during the delay in enacting a 2001-2002 state budget has been the three leaders' agreement to move forward in announcing the next phase of the state's commitment to high-tech research and development. The substantial investment being made by the state and the private sector will vault New York to a national leadership position in areas of technology with the greatest potential for societal and economic benefit. The recently announced Nanoelectronics Center of Excellence at SUNY Albany, for instance, will be a one-of-a-kind center in the world.
Much of the legislation implementing the agreements on the new Centers for Excellence and other high-tech initiatives will be separate from this tax legislation and we will be weighing in on those details.
S.4-A establishes tax credits for biotechnology companies that locate facilities in new Gen*NY*sis Zones. Biotechnology and biomedical research and development offers great economic potential for the state in the years ahead. Over the past two decades New York has slipped in the number of grants it receives from the National Institutes of Health. These numbers can and should be reversed. The creation of Gen*NY*sis zones will move the state back in the right direction.
Dedicating Business Taxes to Superfund Clean-up: The Business Council has communicated its position to the Executive and Legislative branches over the past two years – we believe the superfund program should be designed to clean the most possible sites, as fast as possible. We support using corporate income tax collections to help pay part of those costs. And we support the permanent refinancing of the superfund program as part of a comprehensive reform package.
We strongly oppose imposition of new business fees to support these programs. The state's business community is already paying its fair share of the state's superfund program. According to the Department of Environmental Conservation, of the $4.6 billion that has been spent to date under the state's superfund program, $3 billion has been spent by responsible parties (mostly industry). We support S.4-A as a balanced approach towards refinancing the state's superfund program.
Other important changes: S.4-A has a series of other tax changes that The Business Council has championed including the creation of a small business tax credit for the purchase of health insurance, the amendment of the real property tax treatment of railroad property, broadening the investment tax credit, and eliminating the minimum tax on the net value of capital stock for all telecommunications companies. The telecommunications tax code has been slowly modernized over the past few years. It is an essential industry to New York's economic well-being.
We enthusiastically support S.4-A as another step in the comeback of the Empire State.