PLATTSBURGH — A proposal from the governor to eliminate the state corporate tax in Upstate New York is bringing a smile to the faces of local officials.
"One of the biggest challenges New York faces is that business taxes are higher than just about anywhere in the country, and that retards growth of business," City of Plattsburgh Mayor James Calnon said Monday.
"If we can encourage businesses to come here or stay here, that will certainly help with our employment base and our population base."
Gov. Andrew Cuomo's plan would reduce the state corporate tax rate from 7.1 to 6.5 percent and eliminate it for manufacturers located Upstate.
He will outline it in detail in Wednesday's State of the State address from Albany.
"The reduction of the state's corporate tax rate to a level not seen since 1968 is another welcome step in the right direction," Garry Douglas, president of the North Country Chamber of Commerce, said in a statement.
"But even more remarkable is the proposed elimination of state corporate taxes on all Upstate manufacturers. That means a rate of zero. This will not only support the future of our existing manufacturing base, always struggling to remain globally competitive, but will provide a powerful economic-development marketing tool."
Douglas, part of a group of business leaders from around the state who met with Cuomo on Monday to discuss the plan, said it would be especially helpful in attracting businesses from Quebec and Ontario.
It would also be advantageous in competing with Vermont, he said, as the Green Mountain state has a tax rate of 8.5 percent for manufacturers.
"Who would have thought just three years ago that New York's fiscal house would be sufficiently in order that we could begin further reductions in our tax rates, but that time is at hand," Douglas said.
ENERGY, ESTATE TAXES
Douglas said the governor's proposals "embrace several other items that we and our partners have also been calling for, including accelerated elimination of the 18-A assessment, which is an added state tax on already high energy costs in New York, with total elimination in the next year for industry.
"Also, needed reforms (are proposed) in our state's outdated estate taxes, providing relief for our family businesses and farms, keeping their economic activity going into the future," he said.
"Tax relief is clearly a leading item on the agenda of the next legislative session, and that's encouraging news for New York's struggling job creators."
Calnon said lower corporate taxes would become a valuable tool to help municipalities like the city to attract more business.
"It levels the playing field, and that's good for business, and that's good for everybody," he said.
The governor's plan is expected to be part of his budget proposal for the 2014-15 fiscal year, which he will present later this month.
Assemblywoman Janet Duprey (R-Peru) said she hopes the plan works.
"Anytime you can reduce or eliminate taxes for our businesses, it's a great thing," she said.
"Corporate taxes have been way too high for way too many years."
Duprey said she is interested in seeing the details of the governor's proposals, but believes they would boost the economy overall.
"If we can attract more businesses and more jobs, the economic impact will be spread around and will help everyone," she said.
The New York Farm Bureau also supported the governor's ideas.
"The tax burden in New York is one of the driving factors that places New York’s farms at a competitive disadvantage with those in most other states," Dean Norton, president of the New York Farm Bureau, said in a statement.
"Tax relief has long been a part of New York Farm Bureau’s priorities, and we support many of the initiatives Governor Cuomo proposed (Monday)."
Raising the estate-tax threshold to match the federal level would bolster efforts to transition family farms to the next generation, Norton added.
In addition, finally doing away with the article 18-A surcharge on energy bills would help contain production costs, which also eat into a farm’s ability to make a profit, he said.
"New York Farm Bureau is eager to review the plan in greater detail and work side by side with the governor to improve the business climate in the state for our farmers," Norton's statement said.
"By investing in New York agriculture, Mr. Cuomo is investing in the rural economies both in Upstate and on Long Island."
Email Joe LoTemplio: firstname.lastname@example.org