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Most not impressed by new tax cuts

Rochester Business Journal
April 11, 2014

More than three-quarters of respondents to this week’s RBJ Daily Report Snap Poll say the new state tax cuts are unlikely to make New York a better place to live and do business.

New York has long ranked at or near the bottom of the list of states nationwide in terms of tax competitiveness. This year, Gov. Andrew Cuomo vowed to make tax reduction a top priority.

The plurality of Snap Poll respondents—46 percent—said the new state tax cuts will not do much to make New York a better place to live and do business. Twenty percent said they would help somewhat, and 3 percent said very much.

The recently approved state budget contained a number of cuts. Among them: a reduction in the corporate franchise tax to 6.5 percent from 7.1 percent; a reduction in manufacturers’ income tax to zero from 5.9 percent; a phased-in increase in the estate tax exemption, to bring it in line with the higher federal exemption; a new property tax credit; and an accelerated phase-out of the 18-a temporary energy assessment.

Commenting on the budget, Cuomo said it maintains fiscal discipline by holding spending growth below 2 percent “while also making broad tax cuts that will help homeowners and businesses thrive.”

Others noted, however, that the budget did not reduce the state’s personal income tax rates. And they contend that little was done on mandate relief, which could ease local tax burdens, or to reduce the red tape many businesses face.

One percent of respondents agree with Cuomo, saying that with passage of the new tax cuts, New York’s overall business climate earns a rating of excellent. This compares with 60 percent who rate the climate as poor, 34 percent who say fair and 5 percent who rank it as good.

Roughly 500 readers participated in this week’s poll, conducted April 7 and 8.

In your view, will the new state tax cuts make New York a better place to live and do business?

Very much: 3%
Somewhat: 20%
Not very much: 46%
Not at all: 30%

With passage of these tax cuts, how would you rate New York’s overall business climate?
Excellent: 1%
Good: 5%
Fair: 34%
Poor: 60%

COMMENTS:
Talk about baby steps! Selective and targeted corporate tax relief at a time when all businesses and individuals are being crushed by the tax burden! Does King Andrew think he’s better at picking winners than the marketplace? New York’s track record wouldn’t say so. If tax relief is good for some, why isn’t it for others? A grand statement showing he’s serious about tax relief would include across-the-board significant tax cuts for all businesses coupled with actual cuts in spending! Let’s propose giving readers one day each to cut the state budget! Where’s the relief for individuals? Oh, I forgot, the individuals’ tax relief comes from the cap on property taxes. So the localities just increase the fees for services on the tax bills. Hey, it isn’t a tax increase if it’s for services! At the end of the day, I still don’t believe the governor or the Legislature is serious about tax relief!
—Keith B. Robinson, Diamond Packaging

These tax “cuts” are a joke. The people who drive the economy are the small-business owners, and there is no real relief in these “cuts.” Gov. Cuomo must step up, make some tough decisions (that may very well be politically suicidal) to get the state economy back on a road to recovery. This state cannot sustain its path. All line items in the budget should be at risk—no exceptions. Until a tough stand is taken, we will continue to kick the can down the road for future generations to deal with.
—Gary M. Baker, Cochran, Cochran & Yale

Highest-taxed state in the nation says it all. The budget needs to go down, not up, every time a new one is proposed. That means expenses have to be cut. There is way too much waste, from unsustainable pensions to unabated overtime to excessive time off. We need to stop the bleeding.
—Rich Mileo

These cuts are certainly a step in the right direction; however, New York State is so far behind the rest of the nation that I do not believe the cuts will move the business or personal tax environment anywhere near being competitive.
—Mike Tedeschi

New York is consistently ranked between 48 and 50 on the list of places to do business. Usually only rivaled by California (that’s not good!). I find it offensive that we can look at these cuts that we all know will be offset by other forms of tax increase—I’m sorry, revenue generation—and that spending will continue to expand at a lightning pace. Get out while the getting is good.
—Tyshawn Maxwell, Rochester

Like bailing out your flooded basement with a teaspoon.
—Dennis Ditch, Delta Square Inc.

The cuts are a good first step. However, we still rank as one of the highest-taxed states, and this will detract people and businesses from coming to New York State. We definitely support New York City too much from the rest of the state and don’t use our funds as they were intended, such as the Thruway tolls. Our teachers and school administrators are overpaid for the results they produce, as well as our public administrators and union employees. In short, we have a long ways to go before we become really attractive for people to move to New York State and put up with the climate, high taxes and poor schools.
—Bob Stein

Mandates to lower forms of governments were not changed—hence, no real change.
—John L. Sackett Jr., owner/manager of Sackett Farms

It remains to be seen what effect these tax cuts have on business and a better place to live. New York’s reputation for the highest tax rates is killing us here. While at a college friend’s $400,000 house in Florida, we questioned their combined real estate taxes, $2,487. We need some drastic measures to ensure this “Empire State” does not crumble for business and residents.
—Ed Rosen, Fairport

Having owned my business in New York since 1990, it feels like New York is well into a slow death spiral. Gov. Cuomo’s tax-free zones are like rearranging the deck chairs on the Titanic in the last 30 minutes of its voyage. I recently read the mayor of New York has 150 labor contracts to negotiate. How could a system like this use its resources efficiently?
—Sam Messer, Applied Measurement & Controls Inc.

Our New York State government is too big—period. We are consistently the highest in the country in every cost category. Until we reduce the size of government and associated mandates, the paltry “tax credits” Cuomo touts are nothing but political marketing schemes aimed at getting him re-elected. Let me put it this way: My money would go a lot farther anywhere in the U.S. outside of New York State. Does that sound like a better place to live and do business?
—David Wagner
While New York City development continues to thrive, I hope the tax credits and changes lead to a more attractive place to do business in Western New York. We need smart growth that is not based around casinos. I want to see it easier to start a business here, especially in the first five to 10 years the business is starting. Continued and improved tax breaks are needed for adding jobs in urban areas that have seen little to no development. Overall, New York needs to be more competitive with other states and continue to leverage the great universities, colleges and natural resources that give the region potential.
—Keith Newcomer

Real estate taxes for me are 10 percent of my income; I paid almost as much state income tax as I did to the feds. Add in sales tax, fuel tax, communications tax … and 40 percent of my income is gone to the government. No, New York is not and will never be a great place to work or have a business until there are some drastic cuts. Which may one day be forced upon us; all the hidden debt that New York has racked up will come due, and taxpayers are on the hook for it!
—Mike Knox

Read what happens to New York State estate taxes. The marginal rate can be well over 100 percent on estates which are not all that large or uncommon. My estate attorney told me flat out: “Don’t die being a resident in New York.” I swore that no politician would ever push me out of my home. Now I am not so sure.
—Jay Birnbaum

It’s all smoke and mirrors. My property taxes continue to climb—this year my property tax assessment went up 22 percent over last year. The reason: When I met with the town assessor, he said property values have increased because of recent sales. I am so mad and disappointed; Cuomo has not done anything! There should be a freeze on assessment increases. Property taxes in New York State need to be rolled back by 50 percent on every single piece of property to make New York State livable.
—Rick Arnold

These are election-year gimmicks at best! Very little mention was made of Cuomo’s raiding of the New York State insurance fund ($1.75 billion) to balance his budget. This will certainly result in even higher workers’ comp premiums for all New York businesses! Adding more burden to business is why New York is last on the list of where jobs are being created. What we need is a new governor and a new business-friendly Legislature, or nothing will ever change.
—George Thomas, Ogden

There’s a lot of gimmickry here and PR grandstanding. If we’re reducing taxes for new businesses located near college campuses, why are we not rewarding businesses which are already here with some degree of equity? In any event, though taxes are still too high, it’s a step in the right direction. Next? How about reducing onerous regulations?
—John P. Gleason, Gleason Fund Raising Consultants

Nothing but double-talk and smoke and mirrors. Everyone, grab your wallet and run!
—Bill Lanigan

Gov. Cuomo’s budget is just a number of tax benefits for a number of friends. What we need in New York State is a broad-based tax reduction that does not play favorites. We need cuts in the personal income tax rate, the rate that drove “our billionaire,” Tom Golisano, and multimillionaire Rush Limbaugh to Florida. It used to be Tom Golisano found things to do with his money and his generosity here in New York. Now Florida gets a lot more of his interest.
—Clifford Jacobson M.D., Vanguard Psychiatric Services P.C.

With every state vying for more employers, we still have a mountain to climb. We cannot continue to have the reputation we now do not enjoy!
—J.A. DePaolis, Penfield

These “tax cuts” are nothing more than election-year gimmicks that shift the tax burden from manufacturers and property owners to those paying income and other state taxes.
—Lester Wilson, North Syracuse

Without meaningful spending cuts, so-called tax cuts are little more than a smoke-and-mirrors charade. Where are the spending cuts?
—Tom Shea, Thomas P. Shea Agency Inc.

A good start, but more can be done to reduce government spending, taxes and regulation.
—Bruce Anderson, Alpha & Omega Parable Christian Stores

New York has the highest tax burden and the highest public debt per capita in the United States. Tweaking taxes around the edges will not amount to a hill of beans. What is required is a complete restructuring of the state government and its regulations. We have a lot going for us. Rochester has a well-educated workforce, and there is a real entrepreneurial spirit in the business community. Release us from state burdens and we will soar.
—John Calia, Vistage International

This is a ridiculous initiative, trying to get new businesses into the state. What about those that have been here for years? We are still the highest-taxed state in the union. Just a progressive attempt to divert attention from real problems.
—D.J. Sullivan

A good start, but more can be done to reduce government spending, taxes and regulation.
—Bruce Anderson, Alpha & Omega Parable Christian Stores

New York has the highest tax burden and the highest public debt per capita in the United States. Tweaking taxes around the edges will not amount to a hill of beans. What is required is a complete restructuring of the state government and its regulations. We have a lot going for us. Rochester has a well-educated workforce and there is a real entrepreneurial spirit in the business community. Release us from state burdens, and we will soar.
—John Calia, Vistage International

4/11/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


What You're Saying 

Larry Rabinowitz at 4:55:09 PM on 4/11/2014
The new New York State estate tax law provided some planning opportunities for people up to the $12 million level, but some severe consequences if the plan is not designed well. There is an exemption "cliff" where the whole exemption is lost. Be careful.

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