The Senate Majority's budget plan for 2007-08 rejects all of the business-tax increases Governor Spitzer proposed in his Executive Budget -- tax increases that The Business Council has criticized as potentially damaging to the state's economy. Instead, the Senate plan would cut business taxes across the board.
"We applaud Senator Bruno and the Senate Majority for working to make our business taxes more competitive," said Kenneth Adams, president/CEO of The Business Council. "Instead of raising taxes on employers, we need to make New York a better place to do business and create jobs. Senator Bruno's plan does exactly that."
The Executive Budget would raise business-tax collections by more than $500 million a year. Many manufacturers and other companies with operations in multiple jurisdictions would be required to pay New York tax on revenues from outside of the state, at a total estimated cost of $215 million annually. Banks across the state would pay more as a result of several proposed changes to the Bank Tax. The state Budget Division estimates the cost of those proposals at $185 million, while the New York Bankers Association projects the cost at close to $1 billion a year.
In testimony to the Legislature's fiscal committees two weeks ago, Adams urged lawmakers to reject the proposed tax increases, saying they "will only make our economic problems worse."
The Senate Majority plan excludes the Governor's tax proposals. Instead, it provides a wide range of reductions in business taxes. Those include elimination of corporate income taxes on manufacturers; a reduction in the main corporate tax rate from 7.5 to 6.85 percent; and new incentives for technology companies to manufacture in the state.
The Assembly's budget plan accepts most of Governor Spitzer's tax proposals, while rejecting proposed application of the tax increases to the New York City tax code. The Assembly also rejected two recommended changes to the Bank Tax, including one proposal that would result in banks paying higher taxes when they add jobs in New York State.
The Senate and Assembly are scheduled to start conference committee discussions on the budget this week. The new state fiscal year starts April 1.
"We look forward to working with Governor Spitzer, the Senate and the Assembly to ensure that this year's budget makes New York a better place to do business and create jobs," Adams said.