At the start of Wednesday’s Senate hearing on potential reforms to state tax policy, GOP Sen.Carl Marcellino said he was “hoping to hear creative ideas,” rather than the same old litany of how bad our taxes are.
As it turned out, there was a bit of both.
Joe Henchman of the Tax Foundation, a national group, noted that New Yorkers bear the highest state and local tax burden of any state, with an average 12.8 percent of their incomes.
And Jessica Crawford of MedTech, which represents biotechnology firms, spoke of companies that were moving to or expanding in places like Texas or Massachusetts.
Speakers did offer up ideas and hope.
Crawford pointed out that the Empire State has the workforce, academic centers and research base to grow its biotech industry.
“New York has all the necessary assets to continue to grow,” she said.
And Henchman said New York could look to other states, including Nebraska or North Carolina, for ideas. He said policymakers might “go big” like the Tar Heel state by offering across-the-board income tax cuts rather than the traditional program of giving credits or breaks to favored industries.
“You’re not going to get there offering a credit for this industry and a credit for that industry,” he said.
The Empire Center’s E.J. McMahon agreed, saying the state tax code is “cluttered with credits, deductions and other loopholes driven more by short-term policy goals and political considerations,” than sound economic principles.
“It’s time to turn away from targeting,” said McMahon, who believed that a flatter income tax would help spur the economy.
Not everyone was against credits. Ken Pokalsky of the state Business Council said there is a place for credits to encourage investments.
And Frank Mauro of the Fiscal Policy Institute noted that the state’s property taxes remain a major problem for people, despite the 2 percent cap. “The tax that most New Yorkers care about is the property tax,” he said, calling for an income-based “circuit breaker” that could help refund portions of the property tax.
Much of the testimony reflected the various missions and origins of those who participated. The Empire Center is affiliated with the fiscally conservative Manhattan Institute, while theFiscal Policy Center is backed by organized labor including the state teachers union.
Mauro and McMahon had some common ground — both dislike Gov. Andrew Cuomo’s Start Up NY initiative designed to give a decade-long property and income tax holidays to startups on upstate SUNY campuses and other spots.
McMahon said the program epitomized New York’s approach of targeting tax breaks which he believes needs to end.
“Rethink the Start Up New York program,” added Mauro.
Cuomo, during a visit to the North Country, defended the program, saying it could help turn around the state’s reputation for prohibitive taxes.
“I wanted something really dramatic to change the paradigm in New York,” Cuomo said of the plan.
“You take all that rhetoric and perception that New York is a high tax state and you just flip it,” he said.
©2013 Albany Times Union
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