Contact: Joshua Fitzpatrick, (518) 455-3751
For Immediate Release:
Wednesday, January 16, 2008

Tedisco Says Governor Spitzer Deserves Credit for Recognizing Severity of Upstate's Economic Decline, Calls For "Dramatic Policy Overhaul" To Renew Upstate
Says State government should take this opportunity to implement bold, new policies like repealing the Corporate Franchise Tax and enacting a property tax cap

In light of a continued downward economic spiral that has engulfed Upstate, Assembly Minority Leader James Tedisco (R,C,I,-Schenectady-Saratoga) today credited Governor Spitzer's "State of Upstate Address" for recognizing the severity of the decline and outlining various policy and programmatic steps to reverse it. Tedisco also called for a "dramatic policy overhaul" that would give an immediate and appreciable boost to the Upstate economy.

"At times, I've been one of this Governor's toughest critics - but not today. I believe Governor Spitzer deserves credit for recognizing the economic crisis that is gripping Upstate. His decision to give a 'State of Upstate Address' put his bully pulpit to good use in helping draw attention to Upstate's hurting economy," Tedisco said.

"It's not hyperbole to say that the Upstate economy is on life support - some small businesses are literally just hanging on, their pain compounded by the fact that we are either close to, or possibly already in, the grips of a national economic recession," Tedisco said.

Tedisco outlined some leading indicators of the Upstate economy's continued, dramatic decline, drawing upon reports from the bi-partisan American Legislative Exchange Council (ALEC) and the Business Council of New York State, Inc., which found Upstate New York's past economic performance and future economic outlook among the bleakest in the nation.

  • The ALEC-Laffer State Economic Competitiveness Index - based on 16 variables, including top marginal personal and corporate income tax rates, property and sales tax burdens, debt service as a percentage of total tax revenue, and estate taxes - ranked New York's economic outlook as 49th in the nation - below only Vermont;

  • In terms of past performance, the Empire State ranked 47th or third worst in the nation, based upon its 10-year performance in three variables: personal income per capita, absolute domestic migration, and non-farm payroll employment;

  • The report pointed to a period in the mid 1990s when New York lawmakers and then-Governor George Pataki enacted tax cuts that evoked a steep increase in revenue and a resurgence in the state's economy. "However, taxes rose again in the late 1990s and early 2000s, and the upstate region is again one of the most depressed areas in the nation," the report said;

  • New York's overall cost of doing business was second highest in the nation in 2007, according to a new "Just the Facts" table showing scores from the Milken Institute's 2007 Cost-of-Doing-Business Index. The Empire State's score was based on average annual wages, electricity and rent costs for office/industrial space, and tax burden; and

  • Business Council President Kenneth Adams, while noting recent modest improvements in New York's 12-month job-growth rate, indicated that it did not change "significant economic weaknesses," especially Upstate. In the 12-month period ending in October 2007, he noted, Upstate job growth was "an anemic 0.3 percent," and manufacturing employment shrank nearly 3 percent. What's more, he added, New York's fastest-growing sector was "education and health care," which depend heavily on government spending for their growth.

"Governor Spitzer outlined several steps - including using our tremendous SUNY research facilities as 'incubators' for businesses to tap our state's best and brightest minds, improving Upstate's roads and other critical infrastructure and utilizing the State Police to help Upstate cities control violent crime - that we should seriously consider," Tedisco stated.

"One area where I diverge from the Governor's address is seemingly too much of a reliance on taxpayer dollars to fund many of the initiatives he outlined. I am concerned - and I'm not alone - in wondering how our state could afford some of his proposals in light of the nearly $51 billion in debt that New York is carrying - and that is a conservative estimate," Tedisco said.

"I think it's fair to say that parts of Upstate have been hit by a 'perfect storm' of high taxes, energy costs and job loss. In response to this perfect storm that has swamped Upstate, we should take dramatic, bold steps as timidity is not a cure for the chronic ailments afflicting Upstate," Tedisco said, outlining several initiatives advanced by the Assembly Minority Conference that the state Legislature could enact to have an immediate, positive impact on Upstate's economy, including:

  • Repealing the Corporate Franchise and Personal Income Taxes for manufacturers;

  • Lowering the Corporate Franchise Tax from 7.1 to 6.85 percent, which would decrease the tax burden on medium and large size non-manufacturing businesses and reducing the Corporate Franchise Tax for manufacturers and small businesses from 6.5 percent to 6.0 percent;

  • Enacting a property tax cap that would provide approximately $1.5 billion in savings by limiting the growth of school property tax levies for the 2008-09 school year;

  • Commercializing Centers of Excellence and Genesis Centers of Research to allow companies that have conducted R&D in the state to continue to receive tax benefits when they move into actual manufacturing;

  • Increasing the sales tax vendor credit from 5 to 10 percent, and raise the maximum credit to $1,000 per year to more fairly reimburse compliance costs;

  • Eliminating the S-Corp tax differential, restoring the one percent lower tax rate for small businesses and providing a Small Business Energy Tax Reduction; and

  • Enacting a "Business STAR Program" that would make property owned by a small business (100 or fewer employees) eligible for the basic STAR benefits to reduce their property tax burden.

New York State Assembly
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