Focus on special tax breaks in senate hearing
Senate Republicans held a hearing on how to cut taxes, that focused on whether some targeted special tax breaks are worth the money. Meanwhile, some groups complained that they’d been unfairly excluded from the discussion .
Senate Finance committee Chair John DeFrancisco painted a grim picture of New York’s tax policy. He says the state consistently ranks at the top slot for the highest overall taxes in the nation, and the least business friendly environment. DeFrancisco says while there have been some reductions in the personal income tax rates and some business taxes, more needs to be done to reduce taxes and simplify a confusing tax code.
“The need for tax reform cries out,” said DeFrancisco, who says the personal income tax contains 15 modifications and 45 different credits.
Conservative leaning groups were well represented at the hearing, along with business lobby groups. They argued for more broad based, across the board tax cuts, like the income and corporate franchise taxes.
EJ McMahon, of the Empire Center, told Senators that New York State can afford the tax reductions, if it cut back on the existing, numerous special tax breaks for certain industries. He singled out the $400 million film and TV industry tax credit as an example.
“You’re paying NBC to build a studio for the Tonight Show,” McMahon said.
Ron Deutsch, with the liberal leaning group New Yorkers for Fiscal Fairness, asked to testify at the Senate hearing, but was told no. His group held a competing press conference, saying too many tax decisions have been made in secret.
“As a result of closed door discussions what we’ve seen is some very bad tax policy,” Deutsch said. “Which tends to favor big campaign contributors and the very wealthiest in New York State.”
For instance, he says, developers of luxury apartments in New York City received a tax break last January in a provision of a bill that was not made public until this summer. And he says Governor Cuomo and the legislature agreed to send rebate checks of up to $350 to all households in the state with children, shortly before the 2014 statewide elections.
In one area of tax policy, though, the progressive groups do agree with the conservatives. They also think targeted tax credits, like the film industry tax break given to NBC for The Tonight Show, are the wrong policy.
Late in the day, a spokesman for Governor Cuomo said the film and TV industry tax breaks have been an economic boost for the state.
"It is estimated that the 393 projects that have filmed or applied for the film and tax credit program during this administration will result in over $5.5 billion in direct spending in New York," said spokesman Rich Azzopardi, who says in 2012 133 projects applied for the program and could yield 126,150 jobs and $2.2 billion in new spending in New York State.
Governor Cuomo has recently been touting his own plan for a special tax break. He wants to create tax free zones at college campuses for tech start up companies. The governor, traveling in the North Country and Hudson Valley to talk about flood relief, defended the program.
“I think it can jump start the upstate economy in a way we haven’t been able to do, frankly, in multiple decades,” Cuomo said.
But Cuomo agrees there’s more work ahead. He says when he was elected he said that New York has “no future as the tax capital of the nation.”
“We’ve been talking about it for years, we just haven’t done anything about it,” Cuomo said.
The governor is reported to have told a private fundraiser that he intends to cut taxes in 2014, when he’s up for re-election. Cuomo has also appointed a panel to review the state’s tax policies, and a final report is due in December.