The New York State budget process is a complex undertaking with an enormous impact on New York’s residents and businesses. At its core, though, the document has one simple aim, improve the quality of life for those living in the state. One way to accomplish this is by using the budget to shape economic policies […]
The New York State budget process is a complex undertaking with an enormous impact on New York’s residents and businesses. At its core, though, the document has one simple aim, improve the quality of life for those living in the state. One way to accomplish this is by using the budget to shape economic policies that benefit important segments of the economy like the small-business community. In its current state, the executive-budget proposal falls short in several key areas regarding the state’s job-creating business owners.
Perhaps the most egregious measure presented in the spending plan is the proposal to extend the temporary business tax rate for three more years. Democrats in Albany have never seen a tax they didn’t like, but this is one that was scheduled to end. The rate hike from 6.5 percent to 7.25 percent was set to expire at the end of this year, but Gov. Kathy Hochul’s plan would see it extended through 2026. This, along with the extension of the capital-base tax rate, could cost businesses hundreds of millions of dollars per year, including a whopping $1.2 billion in fiscal-year 2026. These measures make a bad business climate even worse and come as the mass exodus of residents and businesses from New York shows no sign of slowing.
The state budget provides an opportunity to address other prohibitive elements of the fiscal landscape. For example, the sky-high unemployment-insurance debt is financially drowning business owners. With billions of dollars owed to the federal government, employers have been saddled with unreasonable per-employee interest payments needed to pay down the debt. Taking a portion of the $227 billion the governor wants to spend and putting it toward something directly impacting small businesses in every corner of the state would go a long way toward helping to alleviate the tremendous pressure these businesses are under.
Further still, the governor’s minimum-wage plan, which would be tied to the rate of inflation, still involves raising costs for small-business owners who have already been forced to do so several times in the last few years. The minimum wage has increased each of the last 10 years. Wages can and do rise when the economy is strong, businesses are moving in rather than out, and companies have the resources to invest in their workforce. This is an organic process, and what the governor is proposing, which are simply more rate hikes, is going to undoubtedly do more harm than good.
Sadly, an executive budget ignoring the needs of New York’s business community is nothing new. Hopefully, as the budget process continues through its passage deadline in a few short weeks, some of these issues are addressed. While crafting an effective budget is never easy, there is no excuse for the level of neglect small businesses can expect should the governor’s proposal move forward as it stands.
William (Will) A. Barclay, 53, Republican, is the New York Assembly minority leader and represents the 120th New York Assembly District, which encompasses all of Oswego County, as well as parts of Jefferson and Cayuga counties.
