MANUFACTURING A TAX

Print More

As the governor and state legislature focus their budget fights on education and environmental programs, a tax cut strategy meant to boost manufacturing jobs is quietly making its way into the final budget, and could mean a $180 million annual loss for New York State. The “single sales” tax, as it is called, would eliminate payroll and property tax for manufacturers, a move Governor George Pataki and other supporters hope will attract more factories, and their jobs, to New York.

But it hasn’t in the five states in which it is already implemented, according to a recent study by the Center on Budget and Policy Priorities. Since 1995, those states have actually lost jobs and money–Massachusetts, for example, lost more than 3 percent of its factory workers and about $130 million a year in corporate taxes, prompting activists there to call for a repeal of the tax. “We’ve seen it shift taxes off of corporations and onto working families,” said Jim St. George of the Tax Equity Alliance of Massachusetts.

In New York, the single sales tax is expected to cut up to 12 percent–or more than $180 million–of the state’s annual corporate tax pool. “There’s no advantage to New York, but there’s a tremendous advantage for multi-state corporations,” said Frank Mauro of the Fiscal Policy Institute in New York.

Albany’s most influential politicians disagree, however. The governor’s spokespeople say Pataki is committed to fitting this tax slash into the budget package, as is the Senate Deputy Majority Leader Dean Skelos. Calls to Sen. Joe Bruno were not returned. As for the other third of the triumvirate that make the final budget decisions, Assembly Speaker Sheldon Silver said, through a spokesperson, “Everything is open for discussion.”