High-tech businesses from other states and abroad that move onto or next to college campuses in New York would operate free of all business, property and personal income taxes for up to 10 years under a proposal released Wednesday by Gov. Andrew Cuomo.
Cuomo said the plan would create jobs in a long-stagnant upstate economy by connecting academic research campuses with businesses in those fields.
“We create great businesses here in this state because we have great schools and we have great young minds,” Cuomo said Wednesday in Buffalo during a daylong tour of announcements.
“We lose them in the first year. Why? Because we have an anti-business reputation, we’re a high-tax state,” said Cuomo, a Democrat. “What we want to do is create an environment where those businesses stay here and create jobs. … There would be no place in the country that you could go and pay less taxes.”
It was unclear whether the proposal would help retain new companies beyond the 10 years in which they would be exempt from what now are some of the nation’s highest taxes. Cuomo wouldn’t answer questions after his first presentation at the College of Nanoscale Science and Engineering in Albany.
Earlier this month, Chief Executive magazine ranked New York as the 49th worst state for business in the opinion of CEOs questioned, based on high taxes, bureaucracy and regulations.
The full exemption from all taxes is a “promising new wrinkle,” said E.J. McMahon of the fiscally conservative Manhattan Institute. “But the state should go much further than this.”
McMahon said the state should use its more generous $440 million tax subsidy for TV and movie productions to phase out all corporate taxes for new and existing companies.
Republicans said a broad tax-cutting approach is needed.
“We need to improve our overall tax structure and make it friendly to business,” said state Senate GOP leader Dean Skelos. He said the state also needs to cut its business regulations and bureaucracy.
“Why,” asked Republican Assemblyman Kieran Michael Lalor back in Albany, “should New York’s struggling small businesses continue to pay high taxes while the governor lets a few pay no taxes at all?”
In Buffalo, reporters asked Cuomo about just that.
“We’re working — we have been the last two years — reducing taxes all across the board,” Cuomo said.
State Assembly Speaker Sheldon Silver said after the Albany announcement that he will insist current New Yorkers benefit from the new jobs and that there be serious “claw back” provisions and penalties for companies that fail to meet promises of jobs and development.
Silver, D-Manhattan, said that project has been discussed for weeks and he expects it to be adopted by the Legislature before the end of its session on June 20.
“It’s not forever. We’re talking about some five-year benefits, some 10-year benefits,” Silver said. “Eventually they are going to become fully taxpaying citizens.”
Silver said the program would bring in new jobs and new businesses, so technically, there would be no cost to the state.
“The tax-free zones will be the answer to finally creating jobs in New York,” said Sen. Jeff Klein, leader of the Independent Democratic Conference in the Senate.
© 2013, Daily Freeman