Wolken: Cuomo’s tax-relief plan for manufacturers ‘significant’

DeWITT — The proposed state tax breaks for upstate manufacturers send a message that New York “is trying to turn the corner at being a high-tech state.”

That’s according to Randall Wolken, president of the Manufacturers Association of Central New York.

“This is significant tax relief if you’re a manufacturer,” Wolken said in a phone interview with The Central New York Business Journal on Jan. 13.

New York Gov. Andrew Cuomo on Jan. 6 announced details of a more than $2 billion tax-relief proposal he says is designed to increase economic opportunity and attract and grow businesses across the state. 

The proposals include the creation of a refundable credit against corporate and personal income taxes that would be equal to 20 percent of a firm’s annual real-property taxes. The credit would provide $136 million in tax relief to the manufacturing sector, according to Cuomo’s office.

“That’s a very large number because it’s the biggest tax that manufacturers pay in the state of New York,” Wolken says, referring to the property tax.

Additionally, Cuomo recommends the elimination of the corporate income tax for upstate manufacturers to encourage the growth of manufacturing. 

If approved, that would place New York among “a very rare group of states,” Wolken says. 

“Only a few don’t have any corporate tax on manufacturers, so it sets a brand new tone, especially for an upstate manufacturer,” he adds.

The proposal would provide an additional $25 million in tax relief for upstate businesses and complement the proposal to reduce property taxes on manufacturers, Cuomo’s office said.

Cuomo is also recommending the elimination of the 2 percent Temporary Utility Assessment (18-A) levied on commercial electric, gas, water, and steam utility bills for industrial customers and accelerate the phase-out for remaining customers. 

The phase-out will save businesses and residents $600 million over the next three years, according to the governor’s office.

The assessment wasn’t related to energy, but instead targeted the state budget’s general fund and was used to pay for budget deficits, Wolken says. 

State lawmakers had planned to phase out the assessment, but Cuomo’s proposal is an even better outcome in Wolken’s eyes. 

“An immediate repeal really helps industrial customers because they use a lot of energy,” Wolken says.

The business-advocacy group Unshackle Upstate pushed for repeal of the 18-A assessment in a 2013 legislative memo on the group’s website. 

Unshackle Upstate is a coalition of more than 80 business and trade organizations representing upwards of 70,000 companies and employing more than 1.5 million people.

“New York State’s 18-A assessment has historically been used to fund the operations of the [New York State] Public Service Commission, the regulatory agency whose responsibilities include ensuring safe and reliable utility service and just and reasonable utility rates. To this end, the 18-A surcharge was statutorily set at one-third of 1 percent of the utilities’ intrastate revenues. Extending this tax will cost all energy consumers (businesses, governments, schools, non-profit organizations, and residences) in the state $254 million in 2013-14 and $509 million in subsequent years,” the memo says. 

Unshackle Upstate “strenuously” opposed the increase of the 18-A assessment in 2009, and the group continues advocating for its “immediate” repeal, according to the memo.       

Contact Reinhardt at 

ereinhardt@cnybj.com