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Zack Hutchins
Director of Communications


Governor Pataki proposes repeal of GRT on energy bills

Also seeks more 'Power for Jobs,' new tax cuts and enterprise zones to aid Upstate

Governor Pataki announced today that he will propose the repeal of the state's Gross Receipts Tax on energy bills, as part of a package focused on stimulating economic growth in Upstate New York.

Additional elements of the Governor's "21st Century Upstate Economic Agenda" will include more low-cost electric power for business, tax cuts for small business, brownfields incentives, and the creation of Upstate "high-tech enterprise zones" with special tax credits for startup businesses.

Business Council President Daniel B. Walsh hailed the package as "a vital next step in the drive to make all of New York State, and Upstate in particular, a competitive location for business growth."

Repeal of the gross receipts tax on energy utilities has been a longstanding priority of The Business Council, and Senate Majority Leader Joseph Bruno had proposed last month that there be a gradual, across-the-board phase-out of this tax for both business and residential customers.

The Governor said his proposal, full details of which will not be available until the budget is unveiled, would schedule the phase-out to give first priority to industrial customers. The full phase-out, he said, would eventually save business and residential customers combined some $500 million a year.

The news release from the Governor's office said the GRT reduction, coupled with a proposed allocation of another 200 megawatts of low-cost electricity to the "Power for Jobs" program, would be of particular benefit to the Upstate economy because "manufacturing is a key element of the Upstate economy," and "energy costs represent a significant portion of manufacturers' business costs."

The Governor acknowledged that the Upstate economy has been growing more slowly than the downstate region in recent years-although he said it is growing faster than Pennsylvania, Ohio, Michigan, Indiana, Illinois, North Carolina and Wisconsin.

The GRT repeal and most of the other measures will benefit business in the rest of the state, as well. All told, the Governor said, his new budget will incorporate $2.3 billion in tax cuts for 2000-2001, including the implementation of phased-in tax cuts already enacted, and therefore will "continue New York's leadership as the tax-cutting capital of the nation."

Additional elements of his economic growth initiative, he said, will include: