For Release — Thursday, March 23, 2006
EMPLOYERS SAY NEW YORK'S TAXES UNDERMINE COMPETTIVENESS
GOOD NEWS: EMPLOYERS ARE POISED TO REINVEST TAX-CUT SAVINGS IN GROWTH
Respondents to new Business Council survey also say other high costs,
especially electricity, workers' comp, and health insurance, must be reduced
ALBANY—New York State employers overwhelmingly agree that New York's taxes undermine their ability to compete and prosper here, a new Business Council survey of employers shows. More than half of respondents said they had considered leaving New York State, closing operations here, or putting growth in other states.
But the survey also shows that many New York State employers are poised to devote much of the savings they would get from proposed tax cuts in economy-boosting investments, including capital investments, creation of new jobs, and improvements in pay and benefits for workers, a new Business Council survey of employers shows.
"If our economy is being left in the dust even by Appalachia, clearly it's because our taxes and basic costs are too high," said Business Council President Daniel B. Walsh. "Employers are saying plainly they need simple policy changes to reduce basic costs, not new government programs or the fantastic notion that current government programs are enough to address our economic ills."
Many respondents to the survey added comments in which they wrote passionately about the need to reduce the tax burden. Others said that other costs that are infamously high in New York State—electricity, workers' compensation, and health insurance—also require attention from policy-makers in Albany.
The Council conducted the survey in March. Surveys were sent to 1,676 Council members; the response rate was 15 percent for 279 responses all told.
The survey showed that:
- More than 90 percent of respondents strongly agreed (71 percent) or
agreed somewhat (20.8 percent) that New York's combined state and local
taxes hurt their companies' ability to compete. New
York's state and local tax burden is the nation's heaviest.
- Nearly 90 percent of respondents also strongly agreed (64.2 percent)
or agreed somewhat (25.4 percent) that business
taxes hurt competitiveness.
- More than 85 percent of respondents strongly agreed (62.4 percent)
or agreed somewhat (24 percent) that other state taxes, including personal
income taxes and the state's estate taxes, undermine their competitiveness.
- Respondents were especially emphatic in criticizing the effects of property taxes, including school, county, and municipal taxes, in undermining their competitiveness. More than seven of 10 respondents (70.6 percent) strongly agreed; another 17.9 percent agreed somewhat.
Although many respondents noted that they have no way to leave New York State, a surprising number, more than half, indicated that they have considered leaving, closing shop, or putting growth in other states. Of these, 28.3 percent strongly agreed, and 27.2 percent agreed somewhat, that New York's tax burden has prompted their companies to consider closing or relocating to another state, or to place new growth in other states.
Despite this glum picture of the effects of New York's high taxes, employers overwhelmingly indicated that much of their savings from any tax reductions would be reinvested.
- More than eight of 10 respondents strongly agreed (53 percent) or
agreed somewhat (28.3 percent) that they would invest a significant
portion of the savings from proposed tax cuts in capital projects
such as improvements to process technologies and equipment upgrades.
- Comparable numbers of respondents strongly agreed (50.9 percent) or
agreed somewhat (29.7 percent) that they would likely invest some of
the savings from tax cuts in improved pay and benefits for workers.
- And eight of 10 respondents also strongly agreed (52 percent) or agreed somewhat (29.4 percent) that they would likely invest savings from tax cuts in creating new jobs and hiring new workers.
Respondents were invited to add their own comments to survey. These comments focused on taxes and several other issues. Here are some of the comments:
“A reduction in these taxes would benefit our company in every way. With this money allocated elsewhere, such as in advertising and hiring new employees, we will be able to see our vision of growth actually happen instead of paying it out in taxes."
“Based on current political trends in tax law and regulation, it is clear that New York State has no interest in keeping the manufacturing economy intact.”
Other costs of job creation:
“As a manufacturer, we have increased cost of production stock and components, energy/power, workers’ comp premiums, and especially the high premiums for employee health insurance benefits.”
“High property taxes, workers’ compensation, utilities taxes, fuel taxes, cut deeply into our profits and keep us stuck in place.”
"In addition to the burdensome tax load in New York State, there needs to be reform and significant reduction in energy costs. These costs as much as any other taxes are causing me to look elsewhere for more business-friendly environments.”
Recruiting and retaining good workers:
“Another concern is we are unable to find persons with the technical qualifications for our new job requirements.”
“The greatest problem is a decrease in the education of a quality-oriented workforce.”
The possibility of leaving the state:
"I am currently considering moving the company anywhere but New York State. The costs are ridiculous. Taxes are outrageous. Basically, New York is anti-business.
“Over 95 percent of our business is done with customers out of New York State. Without major changes in New York, we will be forced to manufacture elsewhere.”
“Power costs/electricity is another big issue also. We might have to move to
the south because of this cost.”
“Too little too late. Shut down after 65 years 12/31/05.”
The need for less government spending:
“New York State also needs to reduce the size of government. Families and businesses are doing more with less every day; government needs to do this, too.”
“In addition to cutting taxes, overall spending also needs to be reduced.”