ALBANY— “The agreement to eliminate $1.3 billion in proposed tax increases in the state budget is a step in the right direction, but it doesn't go far enough. Much more tax relief is needed to help our economy recover,” said Kenneth Adams, president & CEO of The Business Council of New York State.
Among the taxes taken off the table by Gov. David Paterson, Assembly Speaker Sheldon Silver and Senate Majority Leader Malcolm Smith are two that The Business Council strongly opposed, the 18 percent tax on non-diet soft drinks and the extension of the sales tax to cable and satellite television services.
“The agreement to use federal stimulus money to eliminate these taxes is the correct policy,” said Adams. “But, the Governor and leaders must also use stimulus money to eliminate the proposed taxes on health, life and property-casualty insurance and the increased taxes on utilities and telecommunications. There is flexibility built into the stimulus funding; the money is now there to make these destructive taxes go away.”
“The elimination of $651 million dollars in so-called 18-A assessments on utilities and telecommunications providers should be a priority. This huge increase will drive up what people pay for energy and telephone services,” said Adams. “With New York's energy prices already 60 percent higher than the national average for residential customers, New Yorkers cannot afford any more energy taxes,” said Adams.
When this new tax is applied to telecommunications companies that are regulated by the PSC it will put them at a significant competitive disadvantage to non-regulated providers. These companies and their customers could also be hit by a proposal in the Executive Budget to allow municipalities to extend their utility gross receipts taxes to wireless telecommunications companies.
“The proposed taxes on health insurance could be the tipping point for many employers and workers between keeping health insurance coverage and losing it,” added Adams. “At a time when federal and state leaders are trying to make health insurance more affordable, these taxes make it more expensive – it's inconceivable.”
“The taxes on life and property-casualty insurers will also damage an important sector of New York's economy. New York's domestic life insurers maintain headquarters in New York City, Binghamton, Syracuse and Albany and directly employ more than 30,000 New Yorkers.” said Adams. “These proposed taxes could put New York jobs at risk and make all insurance products more expensive for consumers.”
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