For Release — Tuesday, February 17, 1998
TAX CUTS ARE PRODUCING
NEW JOBS IN NEW YORK;
MORE TAX CUTS WILL DO THE SAME, BUSINESS COUNCIL SAYS
ALBANY -- A more competitive business environment helped employers in New York create an extra 86,000 jobs in 1997, compared to what would have been gained under the state's former share of the nation's growth, a new analysis by The Business Council of New York State says.
And New York could add fully 170,000 additional jobs in 1998, just by attracting its share of the employment gains that economists predict for the national economy this year, The Council said.
To do that, the state must continue to make its business environment more competitive by cutting business tax rates and enacting other tax reforms, according to The Council's report, Tax Cuts That Create Jobs: The Next Steps.
From 1992 to 1994, New York's job growth rate was less than 18 percent of the national rate. For 1997, the state improved to 62 percent of the nationwide growth rate, adding 120,000 jobs. If New York had failed to improve relative to the rest of the nation, employment growth in 1997 would have totaled only 34,000, The Council said.
"To attract more jobs, we must attract the businesses that will provide them," the report says. "By far the most important thing Governor Pataki and the Legislature can do is to make New York more competitive, as we seek to convince those businesses to locate and grow in the Empire State."
The report says the tax cuts Governor Pataki and the Legislature have enacted in recent years "are nothing short of extraordinary." State revenues in the current fiscal year are $6 billion lower than they would have been under the tax structure in effect in 1994. By the year 2000, that figure will rise to $7.5 billion -- a reduction of one in every six tax dollars.
Yet, The Council said, New Yorkers still pay taxes that are among the very highest in the nation -- some 45 percent above the national average, on a per-capita basis.
After sharp reductions in personal income taxes, homeowners' property taxes, and taxes on lower-income workers, the next step should be major business tax reductions, it said. New York's business tax rate of 9 percent is higher than those in 37 states.
A comprehensive reduction in state business taxes, such as that proposed by Senate Majority Leader Joseph L. Bruno, would "cost" the state treasury some $800 million. The Executive Budget proposed for next year projects that tax revenues will increase by $2.3 billion under current law.
"State government doesn't need all that additional revenue," The Council's analysis says. "Our people and our private-sector economy can put it to good use."
The Council proposed these priorities for new tax cuts:
- Reducing broad-based business tax rates.
- Going faster and further on energy cost reduction.
- Reducing the alternative minimum tax.
- Extending the investment tax credit to the securities industry.
- Enacting several targeted tax cuts.
The Business Council is New York's largest broad-based business group, representing over 4,000 member companies large and small across the state. Based in Albany, it lobbies for a better business climate, and offers cost-cutting services to its members.
NOTE to editors and reporters: The Business Council's new report includes a list of how many jobs would be added in each county, if New York were to match the projected national growth in 1998 and if that employment growth were distributed evenly around the state.