ALBANY New York State enjoys a much stronger competitive position in the current national slowdown than during the recession of the early 1990s, and further tax cuts will help the state's economy "keep rolling," Business Council President/CEO Daniel B. Walsh told the Legislature's fiscal committees today.
"To get our economy back on the right track, we need to keep rolling with the strategies that made us strong," Walsh said in testimony to the Senate Finance Committee and Assembly Ways and Means Committee.
"In the early 1990s, our job growth ranked near the bottom of all the states," Walsh said. "At the end of the decade, we were a national leader."
The difference, Walsh said: Governor Pataki and the Legislature have cut taxes, reformed workers compensation and created important new economic development programs such as JOBS Now and Empire Zones. New York can capture its share of the nationwide investment and job growth that will take place after the recession ends if the state continues to cut taxes, promote high-tech development and take other steps to be more competitive, he said.
The Business Council's highest priority for 2002 is supporting New York City's efforts to rebuild its economy in the wake of the September 11 attacks, Walsh said. He urged legislators to extend and expand the state's investment tax credit for securities brokerage and dealer activities, to show Wall Street's decision-makers that New York will be a competitive location for the industry over the long run. He also endorsed making Empire Zone benefits available to businesses that were forced to relocate from lower Manhattan to other areas of the state, and providing parity in the Empire Zone program by locating a zone in every county.
The Council's other top tax priorities are adopting single factor sales apportionment, and repealing the alternative minimum tax. Currently, corporations pay New York State tax based on their jobs and property in the state, so that their tax bills rise when they add jobs or make capital investments in New York. Single sales factor apportionment would base tax bills only on a company's sales in the state, creating a greater incentive for employers to invest and add jobs in New York. A study last year found that single sales factor apportionment would help create an additional 133,000 jobs in the state, more than paying for any lost revenue due to the change. The alternative minimum tax limits the value of the state's investment tax credit; repealing it would enhance the incentive for manufacturers and securities firms to invest in the Empire State.
Walsh applauded Governor Pataki, Senator Ronald Stafford and Assembly Majority Leader Paul Tokasz for proposing reform of the railroad property tax. A recent report by the Public Policy Institute, The Business Council's research affiliate, said New York has lost 11,000 high-paying railroad jobs in the last 20 years, partly because rail taxes in the state are seven to 26 times as high as those in neighboring states. He called for reduction in other taxes, including those on telecommunications and on estates, and for approval of the mandate-relief proposals Governor Pataki made in his Executive Budget.
The state's recent investments in high-tech research and development will pay off economically, Walsh said. Noting that 41 states are targeting biotechnology and other high-tech programs, he urged the Legislature to work with Governor Pataki, private employers and research universities to create "the finest technology initiative in the nation."
-30-