A new program to extend tax-free benefits to certain businesses is projected to cost the state $323 million by March 2017, according to new estimates from Gov. Andrew Cuomo’s budget office.
The program, known as START-UP NY, allows businesses to avoid paying taxes for up to 10 years if they create jobs and locate near participating college campuses. When lawmakers passed the plan in June, it was touted as having no cost to the state by Cuomo and his cabinet members.
Nevertheless, when the state’s quarterly budget report was released Friday after 6:45 p.m., Cuomo’s budget office had revised its revenue projections downward. Over the next three fiscal years, the report estimates START-UP NY will cause the state to take in $323 million less in revenue than had been projected when the budget was passed in March.
“In addition,the START-UP NY program, which creates certain tax-free zones on or near qualifying university and college campuses, is expected to result in reduced receipts growth,starting in FY 2015,” the report reads.
In total, the state’s budget gap is projected to be about $1.74 billion next year, with the state “prepaying” for about $318 million of next year’s expenses this year. The deficit is projected to grow to $2.85 billion in fiscal 2016 and $2.92 billion the following year.
The revised projections are below. The full report can be read here.