Budget Debate Taking Hold In Albany

With a tense few weeks ahead, the state Senate, Assembly and governor are working to finalize 2015 budget proposals by April 1.

Although each proposal has unique appropriations, a highly debated aspect of Gov. Andrew Cuomo’s budget proposal involves property tax reform.

One of Cuomo’s proposals suggests a 20 percent tax credit for manufacturers, contingent on the amount of property taxes paid.

Assemblyman Andy Goodell, R-Jamestown, said there is broad support amongst the Republican minority in the Assembly and in the Senate for property tax relief for manufacturers.

“We recognize if the state’s manufacturers are not in a cost-effective environment, they lose business to their competition or will move to other states, resulting in a loss of employment in New York,” Goodell said. “Cuomo is offering a 20 percent property tax credit because he recognizes that the cost structure for an employer must be competitive if we want to increase the number of jobs in New York.”

However, the Assembly’s concern is in technical details, as the definition of “manufacturer” is too narrow.

Furthermore, the term excludes manufacturers with offices in New York City, even if other offices exist across the state.

“Part of the (Assembly’s) effort is to clarify and expand the definition and that’s a technical discussion involving the tax law and language,” Goodell said.

Cuomo’s second proposal would provide cash refunds to taxpayers within municipalities remaining within the tax cap, which is 2 percent or the rate of inflation whichever is less.

“We shouldn’t make some people’s benefits contingent on some local elected official,” said Assembly Speaker Sheldon Silver.

There is concern in the Assembly over the fact that it could encourage municipalities to raise their budgets to a maximum tax cap, since any increase in their budget up to the tax cap would be paid for by the state, Goodell said.

For example, if a municipality wasn’t going to have a tax increase, under Cuomo’s proposal, the municipality could raise its levy to just below the cap, seeing as how it wouldn’t cost the local voters any money and the extra state funds could be used however the town or village wished.

“Of course, that result of encouraging all municipalities to up their tax caps is the opposite of what we want to happen,” Goodell said. “The second problem is that the governor’s proposal regards taxpayers and municipalities that have extra money and can state beneath the cap, while punishing the taxpayers in those municipalities that are struggling financially.”

In terms of schools, those forced to raise taxes above the tax cap would receive no financial assistance from the state.

“A better alternative, in my opinion, is to take the $400 million the government set aside for this, and use it for school aid to eliminate the gap elimination adjustment so that every taxpayer gets the benefit of the additional state aid,” Goodell said.

In turn, school districts in need of the most financial aid would receive the help they need.