Cuomo: New York's economy is creating jobs, cutting taxes
BY ANDREW M. CUOMO
For too many years New York's anti-business culture was legendary, with chief executives laughing in response to my initial pleas for them to move their business to our state.
Now we are working to create a new New York that is pro-growth and where business and government can work together in a productive partnership to grow our economy and create jobs.
The state budget which just passed is yet another installment in that transformation plan. The foundation of this year's budget is rooted in policies and reforms specifically designed to stimulate New York's economy. This agenda realizes that creating jobs is facilitated by cutting taxes and incentivizing growth.
However, in this environment tax cuts can only happen in tandem with controlled spending by state and local governments. New York State has successfully controlled spending for three years in a row. After decades of increases at exorbitant rates, the legislature and I have held the growth in state spending below 2 percent.
State spending control has been matched by local-government spending control, resulting from our property tax cap -- which also caps growth at 2 percent. Other structural spending reforms, such as our Tier VI pension plan, and renegotiating our employee labor contracts to freeze wages for three years, have improved the short- and long-term fiscal health of the state. These spending controls have allowed us to cut taxes.
Last year we cut taxes on middle class families with incomes between -- $40,000-$300,000-- to their lowest rates in 60 years. This year we passed another tax cut for the middle class by including in the budget a new child care-credit of $350 for middle-class families so they will have more money in their pockets.
New in this year's budget is a series of tax cuts focused on small business and manufacturing companies. We also passed job-creating tax credits that incentivize the hiring of our veterans and city youth in distressed areas.
While some taxes stay the same and some go down, over the next two years the state is seeing a net cut in taxes. However, some complain that taxes are still too high. They are right. Some people would like to see the "millionaire's tax," which was set to expire at the end of next year, eliminated. We have already been able to eliminate it for 99 percent of the New Yorkers who were paying it.
However the plain fact is that revenue has still not recovered. The extension doesn't take place until 2015, the year our financial projections show a $5-billion budget gap. By extending this tax, which generates $2 billion, the state addresses the future gap.
The result is that the fiscal planning of the state is greatly improved. Standard & Poor's recently gave the state a positive outlook, and enacting a long-term credible financial plan is essential. Of course, two years is a lot of time given our economic ups and downs. I am sure there will be a lot discussion and debate -- including by my Tax Commission report -- between now and then about how best to allocate those revenues. But our fiscal house is in order.
In addition to controlling government costs and reducing taxes, the state is working to partner with business by removing obstacles and developing new incentives to grow our economy and create jobs. Building on tax cuts for small businesses and manufacturers, we are investing in our successful regional economic development councils, launching new innovation hot spots to incubate more high-tech business, starting a $50-million New York State venture capital fund to bring to market the extraordinary innovations crafted at our research universities, and promoting tourism in upstate New York. We are also reforming our costly workers' compensation and unemployment insurance programs, saving New York State businesses $1.3 billion.
Most important, state government is functioning. This budget is the third in a row -- balanced and on time -- a 30-year record.
There is still more to do. You don't correct decades of misdirection overnight, but the progress we have made is inarguable. Efficiency, effectiveness and consumer confidence in state government are up; corruption and dysfunction are down, and the gridlock has been defeated.
Our efforts are achieving results: We have created more than 300,000 new private sector jobs -- setting a record with 17 consecutive months of job growth. Today New York has more private sector jobs than ever before and the best is yet to be.
Andrew M. Cuomo is governor of New York.