By Heather C. Briccetti
Providing New Yorkers with more than $2 billion in savings is big news for the state’s economy, especially upstate. Gov. Andrew M. Cuomo’s tax package will provide broad-based business tax relief and support key business sectors across New York.
Business tax reforms and lower business tax burdens will produce significant job, income and economic benefits for the state. Merging corporate franchise and bank taxes, reducing the net corporate franchise tax rate from 7.1 percent to 6.5 percent, providing property tax credits and reducing corporate income tax rates for upstate manufacturers to zero will make New York a better place for business while creating jobs and economic growth.
The importance of the tax relief component for manufacturers cannot be overstated. The loss of manufacturing jobs is one of the main reasons the upstate economy has struggled and this is an important step in the right direction for Western New York, and New York as a whole.
According to a report issued recently by the Public Policy Institute of New York State, prepared by state tax experts at Ernst & Young, the specific business tax reductions in the governor’s tax package will have significant multiplier effects throughout the state’s economy.
The analysis, based on the Regional Economic Models Inc. model of the New York State economy, found that restructuring the tax code and lowering the basic tax rate will produce more than 14,000 new jobs by 2019, and almost 18,000 new jobs by 2024. These are jobs that would not be created without tax reform.
Additionally, in-state personal income will increase by $1.3 billion by 2019 – $2.1 billion by 2024 – and incentivize between $500 million and $800 million in new private sector capital investments. The state’s real gross domestic product, the broadest measure of the size of the New York State economy, could expand by more than $1.8 billion in 2019 and $2.7 billion in 2024.
These broad-based reforms, coupled with reducing operating costs in highly productive sectors, will lead to more jobs and a better economy, making New York a more attractive place to do business.
With this package of tax cuts, there is no question that New York is on the right track. Coupled with the last three years of fiscal restraint – keeping spending under 2 percent growth – New York will continue to create jobs, encourage existing businesses to expand, invite new businesses to the state and target tax relief to those who need it most: employers and residents.
Heather C. Briccetti is president and CEO of the Business Council of New York State.