Will Gov. Cuomo ever stop with the tax gimmicks? Our beleaguered state economy needs more than political plans that pick winners and losers.
In his State of the State Address last week, Cuomo essentially proposed building an economic wall running West from the Connecticut border all the way out to the Pennsylvania border. Manufacturers north of Cuomo’s wall would pay no corporate tax; those to the south would a 6.5 percent.
Once again, Cuomo had acknowledged that tax cuts spur job growth, then turned that idea on its head with political gimmickry.
Consider his signature economic development policy last year, Start-Up NY (originally dubbed Tax-Free NY). This gives Albany-approved companies, that locate on or near predominantly “upstate” SUNY campuses, tax-free status for 10 years. This only helps only companies with the resources or Albany connections to lobby for the tax-free status. And the program Cuomo called “bold” is limited to just 10,000 jobs — one-tenth of a percent of the private-sector jobs in New York.
(By the way, it also isn’t budget-neutral, as Cuomo had claimed. A few months after it passed the Legislature, the governor’s budget office admitted it will cost taxpayers $323 million.)
Cuomo’s also a big supporter of the crony-capitalism boondoggle known as the Hollywood tax credit, which eats up a quarter of all New York state business-tax subsidies, though the film industry represents less than 1 percent of state employment. In this gimmick the state refunds filmmakers 30 percent of production costs incurred in New York. And it’s a refundable tax credit, so the taxpayer wind up cutting movie moguls a check.
To “prove” the value of the Hollywood tax credit to “upstate,” the governor cited big numbers of jobs generated by “Spiderman 2” filming in Rochester. It turns out one-third of the “jobs” were for extras, and many more were one- or two-day hits for caterers and set builders. Very few were permanent middle class jobs that can support an “upstate” or “downstate” family.
Why does the state want to subsidize movie moguls? Well, the last two Democrats elected president benefited greatly from cozy relations with Hollywood. Friendships with movie stars and moviemakers provide a candidate with both glamour and campaign cash.
But back to that zero corporate tax for manufacturers “Upstate.” Where exactly does the wall run? I had to call Cuomo’s budget office to learn that the manufacturers I represent in Dutchess County would be on the wrong side of the wall, along with those in Long Island, Westchester, Rockland, Orange, Putnam and New York City.
Mind you, parts of Dutchess County are further upstate than parts of Ulster and Sullivan Counties, which Cuomo does consider “upstate.”
It turns out the governor’s definition of upstate is “outside the MTA Region.” So our manufacturers, many of which are already at a competitive disadvantage because they have to pay the MTA payroll tax, now must contemplate an additional kick in the gut.
Even Peter Shumlin, the liberal governor of Vermont, sees through Cuomo’s game. When asked if he was going to institute similar policies in his state, Shumlin noted that unlike Cuomo he’s not looking to run for president someday. He also summed up crony capitalism nicely: “I’m not going to put up ads and spend tons of loot offering tax incentives that cannibalize states.”
Cuomo’s tax gimmicks haven’t grown the economy; they merely pit New Yorkers against each other, shifting jobs from one part of the state to another. Permanent, across-the-board-tax-cuts are fair and the proven job-creator New York desperately needs.
Kieran Michael Lalor, a Republican, represents parts of Dutchess County in the state Assembly.