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Most not optimistic about tax-cut package

Rochester Business Journal
January 17, 2014

Nearly two-thirds of respondents to this week’s RBJ Daily Report Snap Poll—62 percent—do not believe Gov. Andrew Cuomo’s recently unveiled tax-relief package will give a big boost to the upstate economy.

Cuomo unveiled a package of tax cuts last week that he said would total more than $2 billion when fully implemented. The proposals were drawn largely from two advisory commissions that delivered reports to him late last year.

The governor described the tax relief as a major step toward “increasing economic opportunity by further reducing taxes and attracting businesses” to New York, especially upstate.

Democrats were more closely divided on the impact of the tax-relief package than Republicans. Forty-eight percent of Democrats taking part in the poll said they think Cuomo’s tax-relief package will give a big boost to the upstate economy, compared with just 39 percent of Republicans and one-third of those who identify themselves as non-affiliated or affiliated with another party.

The proposed measures include a two-year freeze on property taxes, providing nearly $1 billion in tax relief. It would be in the form of a tax rebate equal to the increase in a homeowner’s property tax bill; to be eligible, homeowners must be in a jurisdiction that stays within the 2 percent property tax cap and, in year two, agrees to implement a shared services or administrative consolidation plan.
Among other proposals are a property tax “circuit breaker,” a reduction in the corporate franchise tax rate to 6.5 percent, a real property tax credit for manufacturers, elimination of the corporate income tax rate for upstate manufacturers, and immediate elimination of the 2 percent temporary utility assessment (18-a) levied on commercial electric, gas, water and steam utility bills for industrial customers.

Cuomo’s package does not include any change to the state’s personal income tax.

More than 440 readers participated in this week’s poll, which was conducted Jan. 13 and 14.

In your view, would Gov. Andrew Cuomo’s tax-relief package give a big boost to the upstate economy?
Yes: 38%
No: 62%

Among Republicans:
Yes: 39%
No: 61%

Among Democrats:
Yes: 48%
No: 52%

Among those who identify themselves as non-affiliated or other:
Yes: 33%
No: 66%

What is your political affiliation?
Democrat: 20%
Republican: 37%
Non-affiliated: 37%
Other: 6%

COMMENTS:
Until they lower personal income taxes, it will continue to be difficult to get talented, in-demand professionals to move here from other areas of the country. And the brain drain of people leaving the state will continue.
—Rick Corey, president, OpticsProfessionals LLC

On the surface, the cuts are spectacular, but how are we going to pay for them? It will take a while for the cuts to generate income, so in the meantime what do we give up in return—public safety, social programs, infrastructure maintenance? One thing for sure is this year’s budget will be interesting.
—Michael Lawrence

Cuomo has been an adversary of upstate since he took office. Why should he start being fair now?
—Michael Higgins, Rochester

Any tax relief is welcome and beneficial. However, past efforts to cap property taxes have led to significant increases in “other fees and services,” making the past cap efforts ineffectual. Calling something a fee or service doesn’t make it any less of a tax! Can we expect more this time around? We can cap taxes all we want, but the problem still remains one of spending! As far as the other proposals go, the administration seems so close to grasping the fact that New York is overwhelmed by the taxes that have been placed on it. But rather than simply lowering taxes for everyone, the administration would rather try to pick winners and losers—something that governments are generally not proficient at. Why should upstate service-oriented companies have to pay corporate income taxes while upstate manufacturers get a free pass? What companies are providing employment opportunities these days? The governor would have been far better off simplifying the tax code and lowering taxes for everyone!
—Keith B. Robinson, Diamond Packaging

Gov. Andrew Cuomo must support a tax policy that welcomes and inspires innovators to New York State. Any tax relief helps work toward this achievable goal.
—Peter J. Gregory, Rochester

Businesses in New York are laboring under a dual burden of inordinately high taxes and state regulations. This addresses only half of the problem, but it’s a good beginning, provided there is no hidden “catch.”
—J.P. Gleason, Gleason Fund Raising Consultants

Any broad-based tax cuts are good for business.
—Bruce Anderson, Alpha & Omega Parable Christian Stores

Any tax cut is a good thing, but this is way too little too late. Just election-year gimmicks from a lousy governor.
—George Thomas, Ogden

Another favoritism idea with cost to the taxpayer!
—John L. Sackett Jr., Byron

This is a step in the right direction. It will help slow the bleeding of jobs and talent out of upstate. But we will continue to lose jobs as long as New York is one of the 10 worst states in which to do business. Only large, permanent tax and regulation cuts will reverse the long-term trends. This is more of a Band-Aid than a real solution. If there isn’t serious spending reduction, it is just another election-year “kick-the-can-down-the-road” political move.
—Dennis Ditch

All Upstate New York needs to have an economic resurgence is for the New York State government to get out of the way of our businesses and our people. No favorites. An even playing field. Equality of opportunity, not of outcome. Cut out the unfunded mandates to the counties that drive up our property tax burden to some of the highest in the nation. Approve fracking. Get more ticket revenue from mayors in speeding cars, too. Don’t get too excited. After the election, everyone will go back to sleep.
—Clifford Jacobson M.D.,
Vanguard Psychiatric Services P.C.

We’ll not see an improvement in New York State unless more money is in people’s pockets at the end of the week, spurring demand for corporations’ goods and services. Give real people the tax break, not a corporation.
—Jason Simmons, L3 Communications

Solving a pimple problem, not the big picture. Still way too many taxes and fees. Political pandering at best! Good sound bite but no substance, just like most politicians.
—Mike Masters

Cuomo’s plan is likely like the rest of his plans—all smoke and mirrors. Unless the state adopts a lower overall budget, someone will have to make up the reduced revenues that this proposal will produce. Until New York is better known as a lower-tax state, where living costs are overall better for its citizens and businesses, we will continue to lose jobs.
—Dave Coriale, Webster

The action needed for state and local governments is simple. Spend less money.
—D.A. Kennedy, Webster

The horse already got out of the barn. Too little, too late.
—John Mechetti

And he’s too chicken to make a decision on hydrofracking. It’s not politically expedient during an election year. I think it’s time to close the doors, turn off the lights (heck, leave them on—no one cares anyway) and move to a friendlier state.
—Jeff McSpadden, McSpadden Heating & Air LLC

These tax cuts are a baby step in the right direction. This state is plagued with the (not extensively publicized) exodus of major business entities and young professionals. The very tax base that is getting hosed and leaving is the one that supports our socialist, ineffective, bloated-beyond-control government. Focus on cutting the socialist welfare programs and taxes will be able to be lowered across the board for everyone. This administration is focused on graft and payback, hence the foot-dragging on fracking. The longer Andy takes to make up his mind, the more both sides of the equation lobby (with cash and perks) to gain favor. Interesting contrast when you consider the anti-Constitutional gun laws passed overnight, when there wasn’t money to be made, only law-abiding, taxpaying populace control exerted. Stop ridiculous spending and cut taxes. Period. Here’s a clue: When you’ve overtaxed professionals and businesses away, you can’t tax people on welfare to pay for their own benefits—it doesn’t work. Please spend our tax dollars as if it was actually earned and not appeared from a cloud. What will it take to get the working, silent majority to vote?
—Lou Romano

It’s too complicated. I would have rather seen the money dumped into fixing roads.
—Damian Kumor

It will take a lot more than the rhetoric coming out of Albany to give the Upstate New York economy a “big” boost!
—J.A. DePaolis, Penfield

How about a big spending cut instead? Tax cuts for out-of-state businesses just make it more difficult for existing taxpayers to carry the load. And don’t give me that “increased personal tax-revenue to offset the cut” baloney because of more jobs/people in the area. Surely, the two never meet to our advantage in a tax-and-spend mentality.
—Lou Calarese, Applied Audio & Theatre Supply

Targeting tax relief for manufacturers only is ludicrous. What needs to be done is reducing the number of unnecessary regulations on small businesses, reduction of state-mandated expenditures for municipalities and counties, reduction of tax rates across the board and a purge of the corrupt New York State bureaucracy—which is of course up to the voters to accomplish.
—John Donohue

What about the rest of us business owners who have struggled with the New York tax burden for years? I guess we just get to pay for the proposal.
—Eric Muench, president, Genesistems Inc.

Tax relief will always help the economy. My big concern is that, as usual, Cuomo’s proposal comes with a $2 billion price tag, and until we get at the root cause of the excessive taxation in the state of New York, we will never actually solve the problem.
—Mike Kaser, Penfield

While encouraging new investment in our economy, it does nothing for keeping existing employers in our state. It costs much more to attract than to keep businesses here. Further, the jobs created are more likely to be lower-paying, which also means lower personal tax revenue. The proposal, although welcome, is shortsighted in the strategic long-term perspective. How about measures to keep enterprises here? Further, the biggest growth has been in the non-profit employment areas, which also takes away from the taxable base. This is bogus liberal economics aimed at the “looters” of our society. The “producers” will still explore ways to exit our state for a more friendly environment. The other aspect of these nearsighted measures is to force infrastructure maintenance onto a shrinking tax base. This is a lose-lose strategy. If we don’t learn from history, we will be condemned to repeat it again and again. All this does is bloat the public sector’s transfer payments. No growth means moving backward.
—Dennis Kiriazides, retired

Gov. Cuomo’s proposed tax reduction package will compensate for some of the tax increases he has supported since he has been in office, such as the almost $2 billion tax increase on the highest earners, tax increases on utilities, assessment on employer workman’s compensation contribution, etc. Also, the downstate Democrats will probably not support all of the governor’s proposal, so the impact may be minimal. The governor should educate himself on supply-side economics, which is accomplished by reducing taxes universally and at the same time reduce the cost of the government bureaucracy. He should demand that New York State public unions renegotiate labor contracts, which will reset pension and health care benefits similar to the private sector. If the public unions don’t, then start layoffs. Set up subcontracts with the private sector in an open bidding process to fill gaps in services. At the same time, beat the drum for making New York State a right-to-work state, eliminate project labor agreements, and support school vouchers to create competition in education, which will eventually reduce school taxes.
—John Rynne, president, Rynne, Murphy & Associates Inc.

1/17/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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