With a re-election campaign looming, Gov. Andrew M. Cuomo proposed a range of business and tax breaks, including a two-year income-tax credit for homeowners in areas that abide by the state's 2% property tax cap and take steps to share or consolidate services.
As he begins his fourth year in office, the Democrat offered a tax plan that seemed to offer something for everything. It proposed lowering corporate and estate taxes, eliminating taxes altogether for upstate manufacturers and enacting a renters tax credit for New York City residents who qualify.
Most of the ideas were proposed by a Cuomo-created tax commission in December.
Cuomo said the proposals amounted to $2 billion in tax relief, but would be spread over several years and the state budget, by and large, wouldn't be affected before 2015.
Further, the so-called property-tax freeze is actually an income-tax credit that would be available only in municipalities that took steps to rein in spending and shrink government.
Cuomo said this carrot-and-stick approach would give localities incentives to effectively freeze property taxes. "We propose a property tax credit which will freeze property tax increases for two years," he said. "If the locality wants the credit, then the locality must perform."
Cuomo formally announced his initiative two days before he delivers his 2014 State of the State address, which sets his legislative agenda for the year. He's expected to rollout a "three T's" theme: taxes, technology and tourism.
He said he wants the state Legislature to make the tax cuts its "first agenda items."
The plan would offer an income-tax credit for renters with incomes below $100,000; the credit would vary with family size. The administration is expected to provide more details later this month when the governor proposes a 2014-15 state budget.
E.J. McMahon of the Empire Center, a think tank, said the incentives were too small to greatly benefit homeowners or prod government consolidation. He estimated most the maximum tax credit a Suffolk County homeowner could receive would be around $125; for Nassau County, closer to $200. Most upstate residents would get less than $100.
"It's not fiscally significant," McMahon said. "I don't know how this going to create positive impact on economy."
As the statewide election year begins, Cuomo offered a tax plan with something designed to upstate and downstate interests, businesses and renters.
Appealing to businesses, Cuomo proposed lowering the corporate tax rate from 7.1% to 6.5%, eliminating taxes for upstate manufacturers and offering all manufacturers a 20% property-tax credit.
Cuomo also reversed course on a temporary utility tax known as 18-A levied on energy bills. Last year, instead of letting it expire as scheduled, Cuomo extended it to 2017. Now the governor wants to eliminate it immediately.
Cuomo said the approach was about telling businesses: "Forget all the stereotypes about New York. ... Give us a second look."
Assembly Speaker Sheldon Silver, of Manhattan, called the plan a "bold vision for providing tax relief," but warned that the state shouldn't cut "vital health and education programs" to fund the tax cuts.