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More than three-quarters of respondents to this week’s RBJ Daily Report Snap Poll are opposed to Gov. Andrew Cuomo’s Tax-Free NY proposal, which is intended to be a magnet for new jobs and businesses.
The legislation—released last week and resubmitted Wednesday, with some changes, as START-UP NY—would allow eligible firms to pay no taxes for a decade if they locate at or near public and private colleges. To be eligible, a company would need to be a new business or one creating additional jobs. It also must be aligned with the academic mission of the university or college. A number of types of firms—including retail and wholesale businesses, firms providing financial services, and medical or dental practices—would not be eligible.
The START-UP NY plan—short for SUNY Tax-free Areas to Revitalize and Transform UPstate New York—was passed Wednesday by both houses of the legislature.
Other details in the legislation released last week include a provision that in years six to 10, employee wages over $200,000 would be taxed.
Cuomo and other supporters of the measure say it is needed to boost the upstate economy and counteract New York’s reputation as a high-tax state.
Critics say it would unfairly give preferential treatment to a relatively small group of businesses.
Seventy-eight percent of Snap Poll respondents say they oppose the tax-free plan. Eighty-eight percent say that a small, broad-based tax cut would do more to boost the upstate economy.
Roughly 590 readers participated in this week’s poll, which was conducted June 17 and 18 (before the legislation was reintroduced as START-UP NY).
Do you support or oppose the Tax-Free NY plan?
In your view, which of the following would do the most to boost the upstate economy?
A small, broad-based tax cut: 88%
The Tax-Free NY plan: 12%
I believe this is unfair to local businesses in the area that do pay taxes. I do not see the benefit to our economy from this. We need programs that help small business, not benefit a few in a specialized area.
—Kim Pandina, Panda Wear
Taxation in New York is a shell game. The money has to come from somewhere. If you give one person or business a tax break, then someone else has to pick up the slack. A broad-based tax cut and reduction in the number of duplicative offices and functions within New York State government is needed.
—Frances Reese, Reese Environmental Consulting
This, like most of the governor’s proposals, is simply window dressing. If cutting business taxes creates jobs, why not cut all business taxes? And, while we’re at it, perhaps the governor should talk to employers about what is driving companies to move jobs to other states. Policies that overregulate and practices that favor labor rather than employers are driving companies away. We need real structural change, not window dressing.
—John Calia, CEO coach
I think the plan discriminates against existing small businesses that are struggling to grow in the tax-heavy environment and furthermore discriminates against service-oriented businesses like ours.
—Joe Votava, CEO, Seneca Financial Advisors LLC
A large, broad-based tax cut on all businesses in New York State. Look at Ontario, Canada, and then look at us. Lower corporate taxes have been the catalyst for their growth.
I really can’t believe that I am agreeing with the unions that have been advertising against this, but it’s true. Showing favorites toward certain businesses vs. trying to lower taxes for everyone is wrong on so many levels. By the way, how will all of the current faculty and administrators on these campuses feel about paying income taxes when the business employees working next to them don’t have to? This is just another example of a Cuomo knee-jerk solution that has had no real thought put behind it.
“A small, broad-based tax cut” sounds good on the surface, but in order for it to be small enough to afford, it would be too small to have any effect. The Tax-Free NY plan is theoretically revenue-neutral, since the only companies that will be exempted from taxes will be ones that wouldn’t have been paying taxes to New York anyway.
—Matthew D. Wilson
Another Cuomo gimmick. If you are really serious, then lower taxes for the businesses that are already here and encourage them to stay and expand! And achieve this by cutting the cost of government, and eliminate state regulations that drive up the cost of doing business in New York. Things like the Triborough Amendment, prevailing wage laws, unfair workers’ compensation law “courts,” unfunded mandates, etc. And where is that “transparency” he promised? Instead, we get scandal after scandal.
—George Thomas, Ogden
Just some more ridiculous government interference in the marketplace. How about a large broad-based tax cut?
This is just another high publicity stunt to benefit a few. Fix the system so business in general has a chance.
—Ed Jackson, retired
I tentatively support it only for new technologies that wouldn’t compete with local taxpayers. Better would be a broad-based tax cut for all.
—Mike Hennessy, Open Door Mission
A concerted effort by our Legislature to reduce workers compensation, as well as a sweeping tax reform with reductions, would be a great start to address the issues faced by Upstate New York businesses.
—S. DiCiaccio, Research Financial Group
This is another example of Gov. Cuomo using political gimmicks rather than presenting real solutions.
We have to stop wasteful spending. Start by consolidating school districts, police/sheriff departments and other government agencies.
Attack New York’s issues as a whole, not in bits and pieces. In the long run, this just justifies more government to approve and monitor private projects.
Seems more fair to reduce taxes across the board rather than giving a break to select groups. Cuomo’s plan will divide, as opposed to unite.
—John Stapleton, Marathon Engineering
I like the concept, but the plan as it is currently defined is overly generous.
If Gov. Cuomo is so concerned about the (well-earned) reputation that New York is a high-tax state then, perhaps, he should lower the taxes. A good start would be to stop wasting tax dollars to advertise to New Yorkers about how great it is do business in New York. (If it's that good to start a business here, then he should be advertising in the Carolinas or in Texas.) The proposed tax-free zones will create yet another distortion in the economy that will benefit a few, with little or no benefit to the majority. The function of the government should be to create a stable environment and a level playing field where everyone can prosper.
In reference to your survey, one of the options was "a small, broad-based tax cut.” Another option should have been "a large, overall tax cut." This program is just another way for politicians to reward donors or curry favor. If it makes sense that diminishing the tax confiscation burden on businesses and employees spur economic growth, then we should be doing it statewide. The masters of smoke and mirrors are at it again—the buzzwords are "lower taxes" and "economic growth." Set up to benefit politicians (donors for dollars) at taxpayer expense. Don't misunderstand me, I'm all for this tax break. I just think it should be statewide policy and not just a program. By the time we're done paying for union wages, pensions, benefits, school taxes, property taxes and sales tax, there isn't much left. Now we have to support business that the government deems worthy with our tax dollars. The blatant proposal of such an ignorant program is telling for how stupid and complacent the constituency of New York State have become. We are the enablers of graft and corruption when there are no consequences and programs like this see the light of day. It's a sad day when the incompetent set policy for the capable. Shame on everyone who doesn't exercise their right to vote.
This is about as lame-brain an idea that a politician can dream up. How about getting the fraudulent politicians out of office, get rid of the "vote-getting programs" out of the system? This will automatically improve our ability to create jobs.
—J.A. DePaolis, Penfield
First we had urban development zones, then economic development zones, then Empire Zones, now Tax-Free NY zones. They don't work, they are rife with the kind of corruption Albany is known for, and they ignore the rest of the state that isn't part of the program. Cuomo is turning into such a huge disappointment—he had huge popularity two years ago and could have done so much for upstate's economy, but he's squandering it on these programs which are little more than fluff public relations moves. If he wants to create jobs here, he needs to create the conditions to encourage manufacturing, agriculture and energy development (drilling). The Tax-Free NY program will do nothing for any of those three industries, but it will create endless press conferences for Cuomo, Duffy and their subordinates.
Tax-Free zones are NOT the answer. We need long broad-based tax cuts to increase employment and our tax base. We have many great small businesses, who employee fewer than 200 people, that are the backbone of our Upstate economy. Let us make sure these companies stay whole, so they can continue to grow in business. We need to limited their taxes and regulation. Locally owned companies return three times to local economy over what national owner companies. Support you locally own businesses!
—Harold H. Ley, Appliance Associates of Buffalo and Stoney Point Business Consulting
Sounds like snake oil. What could possibly go wrong? How many politicians will we need to administer this program? The beneficiaries won't pay the tax to pay them. Instead of half-baked ideas about drawing business in, how about keeping the rest of us from leaving?
Less tax for them, more tax for me. I don't think so. How about less tax for everyone? There's an idea that just might stimulate economic growth.
Not big enough to make a difference with all the extra rules. Heck even the “having to be on campuses” was too much of a rule.
Until such programs include follow-up and accountability, trading tax revenue for "anticipated job growth" has not been and is not a viable economic model.
The proposed program is a slap in the face to all businesses currently operating in and paying taxes to New York. Where is the relief for us?
—Gene Tonucci, Allen-Bailey Tag & Label Inc.
People that have maintained businesses in New York would not benefit from a tax-free plan so after all these years of support—why would they even consider staying in New York. Albany should go on a fiscal diet and lose the bloat that exists.
—Eric Muench, president, Genesistems Inc.
What a joke, maybe I'll move so my employees won't have to pay state income tax just like Texas where Cuomo is recruiting companies to no avail. What a draw for recruiting new employees. No wonder his approval rating is 50 percent.
—Daniel Mossien, architect
A small, broad-based tax cut MUST be accompanied by an across-the-board spending cut at all levels of government in New York.
—Lester Wilson, Syracuse
Why not just cut the state corporate tax rate to zero across the board? If it is a good idea for a select group of businesses wouldn't be a good idea for all businesses? The tax revenue lost by cutting the state corporate tax rate to zero for all businesses would be made up many times over by more workers and companies paying more sales tax, property tax, personal income tax, utility tax and all the other taxes levied in our state.
—Doug Lyon, Lyon Capital Management
The title is totally misleading. It is a tax shift from most to a favored few. It is not the state's job to pick winners and losers. It is simply another Cuomo scheme to claim credit for tax cuts to a favored few.
—Jim W. Bloomfield
This entire "tax-free" plan from Cuomo stinks! Why should established companies who have been paying their "fair-share “of New York’s high taxes have to subsidize new companies, regardless of where they open or what they produce. It is amazing that this administration of Cuomo cannot grasp the big picture here: "Taxes are too damn high" for everyone!
This is not the way to grow the economy in New York. Existing competing businesses would be put at a disadvantage if these new companies were given unfair tax breaks. Even if these companies were aligned with the academic mission of the university or college, they could come to Upstate New York, set up shop, make their profits—tax free, and leave within 10 years. How will that help our economically challenged state in the long-term?
—Pete Deckman, president, Deckman Oil
In 1973, I started selling electronics and computers across Upstate New York. My big customers were Kodak (50,000+ employees), GE / Schenectady (60,000+), GE / Syracuse, Utica, Auburn, Binghamton area (100,000+), Bethlehem Steel / Buffalo (20,000). Today Kodak has about 5,000 employees. Most all of the GE plants are gone. Bethlehem Steel is gone. Stromberg Carlson and Taylor Instruments and General Dynamics are all gone from Rochester. So Mr. Cuomo wants to continue the high-tax, overregulation policies that have done such a great job of driving out these evil large companies. He wants to continue a failed program that carves out small areas in out-of-the way college campuses to encourage small companies to replace the large companies. What a great, visionary leader! I could never understand why the union leaders in this state kept supporting the Democrat Party that so effectively destroyed all of those union jobs. More great leadership making New York State No. 1!
—Dennis Ditch, Delta Square Inc.
That does not sound fair to me! Everyone should pay their fair share!
Meaningful across-the-board tax cuts will always stimulate growth. By leaving businesses and individuals more of their money, the result will be that they may invest, save and or spend more of their “profits” and wealth, thereby stimulating the economy. Of course by reducing taxes, governments must also curtail spending because government spending is the problem. We need to elect people into office who have as their main goal to reduce the cost of government. Targeted tax cuts only shift the burden over to others who like many private individuals cannot afford to pay more in taxes. Businesses will invest more in the long run if they are encouraged and allowed to save more of their profits—that means jobs may be created. Leave more people with more money in their pockets, and they may spend more, which drives demand, which producers (businesses) must meet and they make more profits which in the future will be used to build their businesses further. Ultimately, controlling government spending and broad across the
board tax cuts will benefit everyone and thus boost not just the upstate economy but the state's economy.
—Michael F. Kloppel, chairman, Ontario County Conservative Party, Canandaigua
Cuomo's proposal is another built-in pork barrel. Those he wants to dole to, he will. And vice versa. He should stop micromanaging and causing further division, and get on with the job of governing a great state like it should be governed. Instead, he dreams up and even writes pet legislation himself. The SAFE Act is a farce; women's so-called Equality Act only further demeans us and ignores other oppressed. Tax-Free NY is one more misnomer crafted to sound good on future campaign literature.
—Diane Harris, president, Hypotenuse Enterprises Inc.
We believe that the government should not choose to give preferential treatment to any select group of businesses. This only serves to put those not included in a disadvantage. We should let the free market system choose winners and losers and not special government programs.
—Ray Hutch, CEO, Synergy Global Solutions
Having the tax-free businesses and employees here would by definition provide no additional state tax dollars from them. As a result, the expenses to support the new businesses and employees (to educate, provide police and fire protection, maintain roads, etc.) would be left to the localities, and there would be no state aid dollars available to help. If an employee from the new company were to be laid off, could (s)he collect New York State unemployment since none was paid in on his/her behalf? If so, then it would be funded by current businesses. In effect, supporting these businesses and their employees is similar to being another unfunded mandate.
In Rochester, the UR is the largest employer. It makes sense to do whatever we can to both help universities grow and possibly provide jobs for recent graduates. The up-and-coming businesses are most likely to be technology- and medicine-based, as well as information systems. Giving businesses that are most likely to be the foundation of our future economy makes more economic sense that giving minute breaks to existing businesses. It's not perfect, but it is a step in the right direction.
—Frank Orienter, Rochester
The Tax-Free NY plan discriminates against existing businesses that don't get those benefits. It may very well force the competition out of the state, leaving the non taxpayers behind, a lose-lose situation. Reduced government spending and related reduced taxes is the way to go. It benefits everyone.
Government attempting to micro-manage the Free Enterprise System? Sounds like a prescription for failure!
—Tom Shea, Thomas P. Shea Agency Inc.
Come on Albany! Taxes are just too high in New York. Address the core problem for business and individuals instead of creating yet another unenforceable tax loophole for a few.
—Wayne Donner, Rush
6/21/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email firstname.lastname@example.org.