ALBANY New York's top business leaders have identified legislative and policy priorities for 2001. The list includes: further tax cuts; Superfund refinancing and reform; brownfield reform; workers' compensation reform; civil-justice reform; continued improvement of schools at all levels; and efforts foster to new collaborations between the business community and schools, colleges, and universities.
These priorities were identified by the Board of Directors of The Business Council at The Council's Annual Meeting in Bolton Landing last week.
Tax cuts: The Council's top tax-cut priority will be adoption of the so-called "single sales factor" to calculate corporate income taxes.
New York's corporate income tax is based on three factors: percentage of worldwide payroll within the state; percentage of worldwide property value in the state; and percentage of worldwide sales with a final destination within the state. The result is that companies that put jobs and plants in New York pay higher taxes than do out-of-state companies with the same sales ratios in New York. Basing taxes on just one factor, sales, would encourage companies to put jobs here. By next year, seven states, including Massachusetts and Connecticut, will use only sales to determine corporate income taxes for some or all businesses.
The National Conference of State Legislatures recently highlighted studies suggesting that states that change their corporate tax apportionment rules are likely to gain jobs in manufacturing and other areas. One of the studies suggested that New York could gain more than 160,000 new jobs by making this change.
Other tax cuts: The Council will also ask lawmakers to consider: updating state taxes on telecommunications to reflect today's competitive realities; accelerating repeal of the gross receipts tax (GRT) for business; modifying the investment tax credit to permit a deduction for leased equipment; tax credits to encourage small businesses to buy health insurance for workers, and reforms of taxes imposed on railroad property.
Superfund refinancing and brownfield reform: Legislative action to refinance Superfund is likely during the 2001 session because the $1.2 billion financed by the Environmental Quality Bond Act of 1986 will be fully allocated in the next year or two. The Business Council believes that the permanent refinancing of state superfund should be part of a comprehensive reform package that bases cleanups on the actual risks posed at a site and that provides for post-cleanup liability releases and liability reforms for entities that did not cause contamination. This comprehensive package should also include specific requirements, timetables and incentives for "brownfield" redevelopment projects. The Council will strongly oppose any refinancing proposal that imposes significant new taxes and fees on business. Because environmental cleanups benefit all citizens, the costs should be covered by the state's general fund and paid for by all taxpayers.
Energy policy: New York's energy costs remain far above average. The recent repeal of the GRT will help in the long run, but recent price spikes, plus fear of more this winter, have focused attention on how state policies can affect both price and supply of electricity. The Council believes New York should: increase supply by expediting the siting of new power plants; resist calls to undermine or reverse the transition to deregulated free markets in energy; and reconsider the "systems benefit charge," an energy tax due to expire next June. There are already several proposals to extend and/or expand this tax.
Improve schools and expand university-industry partnerships: Business strongly believes that the seeds of New York's future prosperity lie in schools, colleges, and universities. The Council will recommend state policies that encourage new and stronger collaborations between business and schools and research institutions.
Earlier this year, The Council cosponsored, with Cornell University and a consortium of public and private universities, a two-day conference on the economic and technological potential of collaborations in genomics and life sciences. Since then, Council representatives have explored other possible areas of collaboration in high-tech, high-growth areas.
The Business Council will continue its strong recent advocacy for better schools and better preparation of tomorrow's workforce. The Council in recent years has successfully advocated higher academic standards, school report cards, and a refocusing of the state's investment in workforce development on employer-focused training programs.
Workers' compensation reform: Workers' comp reforms of 1996 reduced New York's premiums, but overall costs may now be losing ground relative to the national average, largely because increases in assessments (a surcharge on premiums that funds administration and special-purpose funds in the system) are nullifying decreases in premiums. The Council is urging reform or elimination of the "second-injury fund," the largest of the special funds and the main factor in the steady increase in assessments. This fund was created in its current format after World War II to encourage employers to hire veterans injured in the war. The Council argued that it has outlived that purpose, is now used to pay benefits for unrelated second injuries, and effectively forces employers with good safety records to pay benefits for other employers' injured workers.
Property taxes: New York's local property taxes remain 62 percent higher than the national average, according to the U.S. Census Bureau. Governor Pataki's STAR property-tax relief program gives some relief to homeowners, but not to businesses; in fact, STAR may be worsening business's tax burden, because school districts interested in raising taxes have less fear of a community backlash under STAR. The Council will seek policies to give businesses property tax relief. One possibility is turning the $2.8 billion STAR program into a credit against income for both individuals and businesses. This could produce a 20 percent reduction of current school taxes for all taxpayers.
Small-business health-care parity: This policy would give all small businesses access to the same reduced-rate health insurance programs that the state is now giving some businesses under HCRA. HCRA awarded this benefit only to those businesses that were not previously providing health insurance. This created a competitive disadvantage for businesses that provide health insurance to their employees through local and regional chambers of commerce or other employer groups.
Tort reform: The Business Council will continue to advocate reforms to reduce the costs all New Yorkers bear for the state's out-of-control lawsuit industry. These reforms include: repealing of "joint and several liability," under which a defendant can be forced to pay all of the damages awarded-even if the defendant's liability is assessed at only 1 percent; capping non-economic damages; creating a "statute of repose" to limit the period in which a manufacturer can be held liable for damages attributable to its product; allowing employers to introduce evidence of plaintiff's own negligence in tort cases; and limiting lawyers' contingency fees.
Indian land claims: The Council will urge lawmakers to resolve Indian land claims in a manner that understands the full economic, political, and regulatory consequences those resolutions will have for large areas of the state.
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