Government Affairs Albany UpdateApril 25, 2008
As the state legislature reconvenes for its final two months of session, The Business Council will be working on a range of pro-business issues. In addition, we will be “playing defense” on a wide range of issues, including family leave, new prevailing wage mandates and others. This memo provides an overview of what we see as the major post-budget issues facing the state's business community. Please feel free to contact us with any questions or comments on these issues, or if you want to highlight additional issues of concern to your business.
The Business Council testified at this week's Real Property Tax Commission hearing in Albany, urging the Commission to address the growing impact of property taxes on the business sector in their final recommendations.
The Business Council also endorsed reductions in local government spending combined with a cap on property tax levies as necessary to improve the state's economic competitiveness.
The Council further argued that the “STAR” program has been ineffective in controlling real property tax increases. We testified that an alternative strategy would treat the root cause, not just the symptom, of local property taxes. This strategy would be to cut local costs and cap property tax levies.”
The testimony highlighted a report, “What's STAR Got To Do With It,” issued this February by our Public Policy Institute. That report illustrated the high property tax burden paid by business, and increased growth rate of total real property tax levies after adoption of STAR in 1998.
The Commission on Real Property Tax Reform was created by Executive Order this January. It is due to issue its final report on May 22. Information on the Commission and its activities, including transcripts of its regional hearings and other tax reform related reports, are available online at: http://www.cptr.state.ny.us/
U.S. businesses paid $577 billion in state and local taxes in fiscal year 2007, representing 44.1 percent of total state and local taxes, according to the sixth annual study issued earlier this week by Ernst & Young LLP in conjunction with the Council On State Taxation (COST).
The study shows all state and local business taxes paid in each of the 50 states and by industry. The taxes include business property taxes, sales taxes on business inputs, gross receipts taxes, corporate income taxes, and other state and local taxes that are the statutory liability of business taxpayers. Total state and local business taxes have grown from $381 billion in FY2000 to $577 billion in FY2007.
The report shows that New York business pays the second highest state and local tax bill, at $58.6 billion, second only to California. It also shows that combined state and local business taxes in New York consume 6.4 percent of gross state product, the 9th highest figure for any state. Likewise, over the past five years, New York had the 10th highest percentage growth rate in state and local business taxes.
A copy of the study is available at http://www.statetax.org/Page.aspx?id=69654.