Cuomo's tax commission offers its ideas

The commission tasked by Gov. Andrew Cuomo with making the state's tax code simpler and fairer has released its final report.

The New York State Tax Reform and Fairness Commission focused its reform efforts on the tax code's inequitable treatment and its negative impact on state revenues, according to a note on the report from co-chairman Peter Solomon and H. Carl McCall. And while the co-chairs don't expect every recommendation to be adopted immediately, they're hoping this report prompts long-term changes.

Read the full report, HERE.

The report's recommendations touch on sales tax, estate and gift taxes, corporate tax and the 18-A surcharge, real property tax and tax code simplifications.

One of the credits the commission recommends scaling back is the film production tax credit, which is one of the state's largest annual incentives at a price tag of $420 million. Film companies are able to be reimbursed through this credit for 30 percent of their "below the line" costs. The report argues that the credit has been successful, but says it should be scaled back because it doesn't pay for itself and noted other states are scaling back what they offer.

 "Given the growing pressure on State resources, the State should consider scaling back the annual allocation of the credit by $50 million. In addition, the Commission suggests that the State monitor developments in other states and adjust its financial commitment as competitive conditions and budget constraints dictate," reads the report.

This is an interesting recommendation, as it comes less than 24 hours after Cuomo vetoed a bill that would have expanded a more lucrative version of the credit to the Capital Region.

In a release accompanying the report, Cuomo thanked the co-chairs and reiterated his commitment to turning around the state's negative tax reputation.  “ Today’s report represents another step in that direction as we seek to simplify New York’s antiquated and unnecessarily onerous tax code, and to ease the tax burden on families and businesses statewide," he said.

These efforts have the support of Unshackle Upstate, a broad coalition of New York businesses, which credited the report with offering a number of sensible options. Unshackle Executive Director Brian Sampson said in a statement, "We’re especially encouraged by the inclusion of important measures such as the accelerated phase out of New York’s energy surcharge.

He also noted that Unshackle introduced its own tax plan recommendations in September.

"It’s become clear that we can and must reduce New York’s crushing tax burden," Sampson said. "We appreciate the Governor’s efforts and strongly believe that real tax relief must happen in 2014.”
 

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Cuomo vetoes expansion of film tax credit

Gov. Andrew Cuomo decided on Wednesday that 14 upstate counties won't get to take part in the expansion of the Empire State Film Production Tax Credit.

He vetoed a bill that would have expanded the expansion approve earlier this year, which applied to 40 upstate counties. The newly eligible counties would have included Albany, Saratoga and Schenectady counties.

Assemblyman Angelo Santabarbara, D-Rotterdam, and state Sen. Hugh Farley, R-Niskayuna, were the lead sponsors of the proposals.

Santabarbara had hoped the expansion of the credit would ensure the Capital Region is able to compete to bring film companies to the region. Farley had said a film production in the region would be a huge job producer.

Schenectady County Legislature’s Economic Development and Planning Commission Chairman Marty Finn said in a previous statement that an expansion would be a "major step forward!”

The film tax credit normally reimburses 30 percent of a film company's labor costs, but another 10 percent was added for 40 upstate counties in this year's state budget. Only $5 million, of the $420 million committed to the credit, is available at the 40 percent reimbursement rate.

It's not clear what impact, if any, this veto will have on the film studio reportedly interested in coming to Schenectady. Based on the fact Pacifica Ventures, which wants to develop the abandoned site, hired Brown & Weinraub to lobby on this bill, it appears this was something they wanted.

UPDATE: Santabarbara noted the interest from Pacifica Ventures in a statement on Thursday morning expressing his disappointment with Cuomo's veto. "Film companies are currently considering putting down roots in our region, but they will not do so if other upstate communities have an advantage," he said. 

 Farley was also disappointed, arguing that the credit should be applied fairly all over the state. "We’re talking about economically distressed areas that could really benefit from the jobs and economic activity that would be generated by film production," he said in a statement. "I hope this veto is only a temporary setback.  In his veto message, the Governor said expanding the film tax credit should be discussed as part of the 2014-15 budget and I look forward to pursuing it."

Other interested parties in this bill include the AFL-CIO and NBC Universal.

There could still be hope for the Pacifica Ventures project in Schenectady, as they've been tapped as a priority project by the Capital Region Economic Development Council. If the project gets funding, it would mean $15 million in state grants.

 If the expansion was approved, Columbia, Dutchess, Greene, Orange, Putnam, Rensselaer, Rockland, Sullivan, Ulster, Warren, and Washington counties also would have been eligible.

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