The Business Council of New York State said the $135 billion state budget includes a number of tax incentives and reforms that its members advocated for, but it also includes provisions that add to the cost of doing business. The Assembly gave final passage on the budget yesterday and early this morning. The 2013-14 state fiscal year starts Monday.
The Business Council praised the phase-in of a 25 percent cut in the corporate franchise tax rate on manufacturers. The current 3.25 percent tax rate on manufacturing companies will drop to 2.4 percent by 2018. The council also applauded changes made in the unemployment system that “will provide much needed stability to the unemployment system and give businesses a clearer way to manage their unemployment insurance costs, while restoring the state’s Unemployment Insurance Trust Fund to long-term solvency,” Heather Briccetti, president and CEO of the group, said in a statement.
The New York State AFL-CIO said it is pleased with the unemployment change too. Forty percent of unemployment recipients will see an increase in their unemployment insurance rate. There will be several annual hikes, and the maximum benefit will be indexed so it will go up on a regular basis. The last time unemployment benefits increased was 14 years ago, according to Mario Cilento, president of the AFL-CIO.
The Business Council said the budget “adds to the cost of doing business by extending assessments on electric, natural gas and steam energy” and increasing the minimum wage, Bricetti said. (The AFL-CIO supports the minimum-wage hike.) The temporary state assessment surcharge funds energy-related agencies’ and authorities’ operations. It was increased in 2009 from one-third of a percent to 2 percent. It was scheduled to be reduced this year.
The budget also includes $1.23 billion in tax cuts over three years for middle-class families with incomes between $40,000 and $300,000 and at least one child under 18; nearly $800 million in tax relief for businesses over three years; a permanent tax credit for hiring veterans; tax credits for businesses that hire youth; and changes to improve the workers’ compensation system.
Here are more details on New York’s Unemployment Insurance Trust Fund, courtesy of the Council of State Governments: