Last week a flurry of special interests took to the airwaves spreading misinformation about the business tax reforms proposed in the Executive Budget. Among the misinformation: that business tax reform, including bank tax reform, would significantly limit spending in the new state budget and that repealing the bank tax would only serve to pad the pockets of Wall Street. The truth is, business tax reform along with the other energy and estate tax reforms proposed in Governor Cuomo’s Executive Budget will help create much needed, good paying jobs in New York state and creating a more attractive business climate will help expand the middle class.
By merging the bank tax with the broader corporate franchise tax, companies will benefit from a simpler tax compliance structure. Imposing separate bank and corporate taxes somewhat unique to New York state, as the majority of other states, and the federal government, do not impose separate taxes. Easier compliance, in addition to eliminating provisions that currently penalize banks for keeping jobs and resources in New York, something that already exists for the general business community means New York will see a greater investment in jobs and the economy.
Creating this opportunity in New York needs to be a priority for the state and legislators in Albany. The banking sector may be improving, or even “doing well,” but New York’s share of U.S. employment in the financial sector has fallen since 1990. Banking jobs nation-wide have increased by 200,000 but New York’s share of those jobs has declined by 100,000.
The majority of the business tax reforms proposed in the Executive Budget have little or no impact on the FY 2015 spending plan now under negotiation, in fact, the bank tax would contribute to the budget in FY 2015 and the corporate franchise tax is actually projected to generate about $70 million more in more revenues in FY 2015. Even with the Governor’s proposed tax reform package, state spending is projected to grow by $8 billion in just three years while state tax-funded spending will grow by $5 billion.
Sustainable spending growth and reducing taxes to create economic growth, good jobs and strong communities needs to be a priority for New York
The Business Council supports the Governor’s budget proposal, including its broad based tax reforms, because it is part of a workable, sustainable long term spending plan for New York State.