Tax-free campus plan sounding familiar
The more we hear, and don’t hear, about the Tax-Free NY proposal unveiled last month by Gov. Andrew Cuomo, the more it sounds like it could be called Empire Zone 2.0.
Like its predecessor – which involved zones in certain spots throughout the state where businesses could get breaks on taxes, utilities and other expenses – Tax-Free NY would allow state politicians to say they are creating jobs while ignoring the underlying issues that discourage many businesses from starting up or expanding in New York.
While not all of the details are available yet, what Cuomo and other state officials have talked about sounds like a good deal for the recipients. The Tax-Free NY program would give new businesses the ability to operate with no state income tax for employees, and no sales, property or business tax for 10 years if businesses move close to a State University of New York institution – such as North Country Community College. Up to 200,000 square feet surrounding a campus would be included in the tax-free zone.
Eligible businesses would include those with a relationship to the academic mission of the university and companies creating new jobs, including new businesses, out-of-state businesses that relocate to New York and existing businesses that expand their New York operations while maintaining their existing jobs.
While Cuomo is focused on reducing the perception of New York as a high-tax state, the program – like the former Empire Zone program – likely would shift the tax burden instead of reducing it. Companies that move into a new tax-free zone would leave other businesses – and state residents – to pick up the tab.
The old Empire Zone program was abused. Some companies received tax breaks without creating the promised jobs. Unfortunately, the new proposal looks like it could be exploited in the same fashion.
Designated zones with temporary tax breaks would fall short of solving the state’s economic troubles. A better idea for creating jobs would be for the state to dramatically reduce government spending and cut regulations and fees for all businesses. This would make the state “business-friendly” and benefit all businesses – and their employees. The state’s economy would stand a better chance of improvement.