ALBANY— “Proposed tax increases on insurers are a back-door way to fund a bloated state budget and put New York jobs at risk,” said Kenneth Adams, president & CEO of The Business Council of New York State.
Among several proposed insurance tax increases in the Executive Budget is an increase in what are known as Section 332 assessments. The intent of these assessments, as it is in many states, is to fund the operation of the Department of Insurance. They are paid only by “domestic” or New York-based insurers.
“Instead of funding regulatory oversight of the industry, these assessments have been increasing rapidly to pay for programs that have little or nothing to do with insurance regulation,” said Adams.
In 2001, the assessments were just over $101-million. In the proposed 2009-10 budget they would be more than $541-million, a five-fold increase in this tax alone. The state is, in effect, using this industry and its customers to collect taxes for general fund purposes.
“Business Council members in this industry report that they have seen their tax bill triple in the last three years. Increasing the tax burden on one economic sector this dramatically takes away money that could be used for new jobs, investment and growth,” said Adams. “These taxes will put these New York companies at a competitive disadvantage. Firms that have been headquartered in New York for more than a century will have to reconsider where they can grow in the future.”
The life insurance industry is one of the most important in New York. Companies maintain headquarters across the state, in New York City, Binghamton, Albany and Syracuse. New York's life insurance industry directly employs 30,000 people and creates another 45,000 indirect jobs in other sectors of the New York economy.
New York health insurers directly employ approximately 35,000 people. And New York property-casualty insurers employ thousands more.
“This sector has seen constant tax increases in recent years. The multiple tax proposals in this budget should be rejected. Imposing these new taxes could cost New York good jobs,” said Adams.
-30-