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For Release — April 29, 2010

Business Council opposes cuts to tax credits

ALBANY— “Gov. Paterson's proposed 50 percent cut of business tax credits for the next two years will send a clear message to businesses: don't invest in New York,” said Kenneth Adams, president and CEO of The Business Council of New York State, Inc.

"Let's call this what it really is, a $750 million tax increase over the next two years on New York businesses that are struggling to stay competitive and keep New Yorkers working,” added Adams. “This says to businesses that economic development incentives offered by New York cannot be counted on.”

The Business Council's memo in opposition to the proposal states, “Businesses have made capital investments; cleaned up and redeveloped brownfields; hired workers and increased payrolls; invested in research activities and alternative energy; and made other investments in exchange for tax credits and other incentives that helped make these projects affordable in New York State. It is terrible public policy to again reduce tax credits after business investments and expenditures have already been made – as New York did last year in creating new criteria that eliminated tax credits for already-certified Empire Zone companies. This approach makes New York a less attractive state for new investments and new jobs.”

The memo continues, “While New York has a revenue shortfall due to the recession, it has a permanent spending problem. Unsustainable increases in spending over the past decade are driving this year's and future years' structural budget gaps. New York needs to bring spending under control, not raise taxes during a recession, in closing these structural gaps. Unfortunately, there is still no legislative agreement to implement even the modest spending controls in the Executive Budget. Dramatic reductions in economic development programs and a proposed 50 percent reduction in business tax credits are totally out of proportion to the modest proposed cuts, or reductions in the rate of growth, for most major state spending programs.”

Read the memo here.

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