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ALBANY — It’s not just New York’s top income-tax rate that Gov. Cuomo and state lawmakers are extending.
A utility-tax surcharge that costs a typical homeowner $55 a year and was supposed to end next month will remain in place under the new state budget.
The surcharge, which also socks the average big company to the tune of $30,000 annually, will be phased out over three years starting in April 2014.
Cuomo had originally proposed extending the surcharge for five years — at a cost to New Yorkers of $3 billion, but Republican lawmakers objected and initially demanded that it end immediately.
The extension of the utility tax, as well as a three-year top income-tax-rate extension through 2017 and a hike in the state’s $7.25-an-hour minimum wage to $9 by 2016, has businesses leaders fuming.
Despite the tax extensions, Cuomo spokesman Rich Azzopardi yesterday defended the budget, which includes other cuts for small businesses.
“This is the most business-friendly budget in decades,” Azzopardi insisted.
Though Cuomo claimed the new deal will cut taxes on the whole in the election-year 2014-15 budget, business leaders saw it differently.
Small-business lobbyist Mike Durant said that, despite the future tax cuts, the plan “in no way offsets the mandated increase in labor cost” from the minimum-wage hike and utility-tax extension.
“New York has long suffered from an anti-business, high-taxed reputation,” Durant said. “The extension of the high-earner tax rate will only continue to leave New York behind the rest of the nation in economic competitiveness.”
Business Council of New York State President Heather Briccetti said the minimum-wage hike could cost companies as much as $2 billion annually while the utility-tax extension will cost ratepayers $1.5 billion in all.
Meantime, extending the top, 8.82 percent income-tax rate on seven-figure earners beyond 2014 “continues the state’s reliance on a small number of high earners and reduces New York’s competitiveness,” the Citizens Budget Commission said.
The city-based fiscal- watchdog group noted that seven-figure earners in the Big Apple will continue paying a combined 12.7 percent state and city income-tax rate, second only to California.
“This is unlikely to help New York’s recovery,” the group said.
That was a far cry from the CBC’s comments last year and in 2011.
The group called Cuomo’s 2012 plan a “responsible budget” that “deserves an enthusiastic thumbs-up.”
And in 2011, “Gov. Cuomo and the legislative leaders deserve credit for crafting a budget that is not only on time but fiscally responsible as well,” the CBC said then.
The income-tax-rate extension will pull $2 billion a year more out of high earners’ pockets than if the old 6.85 percent rate went back into effect in 2015 as planned.