BY JOE MARVILLI
An agreement has been reached on the 2014-15 State budget, which will offer relief and incentives to businesses and homeowners.
The State Legislature passed the budget in the evening of March 31, with Gov. Andrew Cuomo signing it into law just before midnight the same day. The deadline for passing the State budget is April 1, making this the fourth consecutive on-time budget. With multiple tax cuts and increased funding for economic development, Cuomo said the budget will help New York’s economy continue to prosper.
“This budget maintains the fiscal discipline that has characterized the last three years of progress by holding the growth in spending below two percent, while also making broad tax cuts that will help homeowners and businesses thrive,” Cuomo said.
One of the biggest pieces of the State budget is $1.5 billion in property tax relief. The package is designed to encourage local governments to share services and reduce the financial load on taxpayers. In the first year of this reform plan, New Yorkers will receive property tax relief if their local government, such as New York City, stays within the property tax cap. The property tax cuts will be extended for a second year in jurisdictions that comply with the tax cap and have put forward a plan to save one percent of their tax levy per year, over three years.
The tax on manufacturers’ income will drop from 5.9 percent to zero. The budget will also establish a 20 percent property tax credit for manufacturers who own or lease property.
The State’s estate tax exemption level will increase from the current $1 million threshold to $5.25 million, falling in line with the existing federal exemption limit.
The 18-A Energy Tax Utility Surcharge will be phased out over the next three years, eventually saving New York business owners a total of $600 million. This move thrilled the Queens Chamber of Commerce’s president, Al Pennisi, who said that New York businesses and residents pay some of the highest bills in the country.
“At the Chamber of Commerce, we are pleased to see these reforms included in this year’s budget and look forward to continuing to work with the Governor and the State Legislature to ensure Queens’ economy grows and businesses have every chance to succeed,” he added.
Pennisi also said he was happy to see the corporate capital tax eliminated and the business tax rate reduced from 7.1 percent to 6.5 percent.
The budget will also continue to put funding towards the Regional Economic Development Councils that were founded in 2011. The councils focus on the unique strengths and priorities of each region in the State, in order to maximize their economic potential. The budget will give $150 million in flexible new economic development capital funding and $70 million in State tax credits for a fourth round of the REDC process.
Queens elected officials praised the on-time budget as well as the benefits it will have for small businesses, homeowners and Queens’ economy.
“During this year’s budget negotiations, the State Legislature worked in a bi-partisan way to implement a much needed tax relief program for all New Yorkers,” State Sen. Tony Avella (D-Bayside) said.
State Sen. Joseph Addabbo Jr. (D-Howard Beach) also commended the tax relief in the budget.
“Since this was a rare State budget with a surplus of funds, it rightfully sought to provide property tax relief to homeowners and renters. Individuals who pay some of the highest taxes in the country will be given a credit based upon their income level and real estate taxes paid,” he said.
Reach Joe Marvilli at (718) 357-7400, Ext. 125, email@example.com, or @Joey788.