Summary of Economic Development Highlights in NY Budget

News Date: 
04/01/2014

April 1, 2014

Summary of Economic Development Budget Highlights

The legislature gave final passage to the 2014-2015 State Budget yesterday, which, for

the fourth consecutive year, kept spending increases to below 2 percent and was enacted on time.

The budget is good news for manufacturers. Their income taxes will be reduced to near

zero; their real property taxes will, in effect, be reduced through a 20 percent tax

credit; and their utility bills will be reduced over time as the Article 18-a two percent

utility gross receipts tax is phased down.  The average manufacturer in New York employs 25 workers and is family-

owned.  Typically, these businesses do not qualify for state or local economic development

programs because they are not expanding. Consequently, they pay the highest income and real property taxes. The

measures enacted in the budget will result in real cost savings for most manufacturers, which will enable them to invest

more in technology, equipment, and worker training.  Importantly, these measures will facilitate investment and job

creation for manufacturers. This is important for the state because manufacturing jobs pay 20

percent more than jobs in all other occupations, and the multiplier for manufacturing is the highest for any sector.

Economic Development State Budget Highlights

Program appropriations:

Centers of Excellence $8.723million.  Each Center to receive:  $872,233

Centers for Advanced Technologies $13.818 million

TDOs $1.382million

ITES  $921,000

High Tech Matching Grants $4.6 million

Hot Spots & State Incubators $3.75 million

Digital Gaming Hubs $500,000

Tourism Matching Grants $3.8 million

Market NY Program $5 million

MEPs matching funds program $1.47 million

MWBE program $635,000

CDFI program $1.49 million

Entrepreneurial Assistance Program $1.27 million

Empire State Economic Dev. Fund $31.8 million

Military Base Retention $2 million

Capital projects:

Trudeau – Clarkson Partnership $10 million

Economic Transformation Program (Prison conversion) $32 million

Utica Nano Project $180 million

NY Genome Center $55.75 million

SUNY 2020 $55 million

CUNY 2020 $55 million

SUNY Nanoscale College $50 million

Buffalo Billion ($33 million sub-allocated for STAMP) $680 million

Regional Economic Development Councils $150 million

Excelsior Jobs tax credits $70 million

Freight/Passenger rail projects $20 million

Municipal and private airports $10 million

Taxes and tax credits

Extends the Film Production Tax Credit for two years to 2017; adds a 25% tax

credit for production companies that conduct technical rehersals at NYS theaters.

Enacts a 20 percent real property tax credit for manufacturers. Credit is

applied to property for which manufacturing activities are carried out. The credit

cannot be applied to property already subject to a tax credit. Real property

subject to PILOTs is not eligible. Clawbacks arerequired if a credit is provided to

property whose assessed value is reduced as a result of an Article VII proceeding.

The credit is refundable for non-C-Corporation manufacturers if the amount of

the credit exceeds the businesses’ income tax liability for the year.

Estate Tax: Phases-in higher taxable estate thresholds over four years ($1 million

to $5.25 million) to eventually conform with the current federal estate tax

threshold. Indexes tax rates.

Bank Tax and Article 9-A franchise taxes are combined and the rate is lowered

from 7.1% to 6.5%.

Eliminates Entire Net Income basis for calculating income taxes for

manufacturers statewide. Phases to “0” the capital basis by 2021 for all

manufacturers.

Instead of eliminating the 18-a utility 2 percent gross receipts surcharge for large

users, as proposed by the Governor, the final budget adopts a phased reduction

for all consumers to 1.63 % in 2014; 1% in 2015; and, .73% in 2016.

The Alternative Minimum Tax for all 9-A taxpayers is repealed beginning on

January 1, 2015.

The Brownfield Cleanup Program was not extended in the budget. Governor

Cuomo had proposed a 10 year extension with significant modifications to the tax

credits.

Funding for RESTORE NY Communities program was not included in the budget.

The Assembly had included $50 million in their one-house budget.

Other provisions

Requires the SUNY Chancellor to report to the Governor and legislature on

effectiveness of its economic development activities related to SUNY 2020 and

Start-Up NY.

Enacts a $2 billion bond act to enhance technology used by K-12 schools.

$1.5 billion for real property tax credits for homeowners whose local taxing

jurisdictions stay within the 2 percent real property tax cap the first year, and

stay within cap the 2nd year AND put forward a plan to save 1 percent of their tax

levy a year for three years.

If you have any questions about this e-mail, please contact:

Brian T. McMahon

Executive Director, NYS EDC

via e-mail or at (518) 426-4058