Assembly includes key business tax cuts, with partial repeal of GRT
Assembly Speaker Sheldon Silver unveiled a proposal March 14 for some $750 million in tax cuts targeted to working families and job creation.
Silver said the tax cuts would be part of the Assembly budget resolution to be considered on the floor on March 15.
"We applaud Speaker Silver for championing further tax cuts to create more new jobs," said Business Council President Daniel B. Walsh. "Now all three leaders have placed major tax-cut plans on the table, and we look forward to the ensuing negotiations to determine how best to proceed."
The Assembly majority's proposed business-tax cuts include:
- Changing how financial-services firms allocate receipts for tax purposes, from the address of the firm to the address of the customer.
- Enhancing and updating sales-tax exemptions for the purchase of equipment in the telecommunications industry.
- Making available $150 million in tax credits to insurance companies that contribute to venture capital pools that invest in businesses statewide. Under the Assembly plan, one-third of those credits would have to be allocated to new Empire Zones, regions in which business investment would be encouraged by various new tax credits and exemptions.
- A 50 percent reduction, from four to two percent, in the state portion of the sales tax on energy used by commercial customers.
- An allocation of 200 new megawatts to the state's Power for Jobs program, and a three-year extension of contracts made in that program before Dec. 1, 1998.
- Targeted tax relief to encourage brownfield remediation.
The Assembly plan also would suspend the state's sales tax on gasoline from July 1 through Labor Day this year; increase the earned income tax credit from 25 percent to 30 percent of the federal credit; and cut the "marriage tax" penalty on the personal income tax.
The plan would not fully repeal the energy GRT, as Governor Pataki, Senator Bruno, and Democratic Assemblyman Robin Schimminger have proposed.
However, it would return $30 million to manufacturers and other industries to reimburse those taxpayers for GRT paid on utilities used in the state.
The Assembly called on March 13 for $967 million more in education aid than the Governor proposed.
Senate unveils its budget resolution
The Republican Senate Majority on March 14 released a budget resolution calling for additional tax cuts and for a net spending increase of $478 million over the Governor's $76.4 billion proposed budget.
The Senate's 2000 tax-cut proposal now totals $1.9 billion, including the full repeal of the energy GRT and a call on March 13 for full repeal of the state's sales tax on gasoline and diesel motor fuels.
The Senate's specific budget proposals include:
- An $875 million school-year increase in aid to public schools, $520 million more than the increase proposed by the Governor.
- More aid to higher education: an increase in the maximum grant to students under the Tuition Assistance Program and expanded eligibility; $10.8 million more in funding for community colleges; and restoration of $3 million in "Bundy aid" to private colleges.
- Aid to counties of $340 million over three years to offset their projected cost increases due to the expansion of Medicaid approved by the Legislature in December.
Governor: Cut debt by another $500 million
Governor Pataki proposed using an additional $500 million to cut the state's debt, on top of his original $750 million debt-reduction plan.
This "makes clear that debt reduction instead of new spending or an expansion of government programs will be among Governor Pataki's top priorities for any new resources," his news release said.
The proposal would use $500 million in revenues Albany has as a result of a strong economy. Such one-time resources should not be used to expand programs in a way that balloons government costs in future years, the release said.
His plan would cut debt by $1 billion in 2000-01 and by $250 million in the next fiscal year.
The Governor has also proposed statutory and Constitutional changes for permanent debt reform: a ban on back-door borrowing, caps on outstanding debt and debt-service costs, and limiting new debt to capital projects.
- You can find The Assembly press release on tax cuts here.
- And the Assembly release on its budget resolution is here.