Jan. 19 (Bloomberg) -- New York Senate Republicans approved business-tax cuts and limits on levies that go beyond proposals by Governor Andrew Cuomo, who took office this month.
The Senate’s three-part plan provides tax credits for hiring, a 2 percent state spending cap and a requirement that tax or fee increases receive a two-thirds vote in both chambers of the Legislature, rather than a simple majority. The measures must also pass the Assembly, where Democrats hold a majority and haven’t endorsed the proposals.
November’s elections, in which Republicans regained a majority in the Senate, were evidence that “the people have spoken loud and clear that they want the state to cut spending, stop runaway tax increases and get off businesses’ backs,” Senate President Dean Skelos, a Republican from Rockville Centre said in a statement today.
Senate Finance Committee Chairman John DeFrancisco, a Republican from Syracuse, said the revenue lost from tax cuts would be recouped from faster economic growth.
New York faces a budget deficit of about $10 billion in the year beginning April 1. Cuomo’s budget for that year is due by Feb. 1. The current year’s budget, which Comptroller Thomas DiNapoli said may have a deficit as large as $1 billion, is $135.3 billion.
Cuomo’s “Plan for Action,” published during his election campaign, supported a $3,000 tax credit for hiring unemployed workers, which Republicans would supplement with an additional $5,000 credit over three years for any new hiring.
Cuomo also advocated a freeze in state taxes, while Republicans propose to eliminate the higher personal income-tax rates for owners of small businesses, rather than waiting for the higher levy to expire at the end of 2011. The Republicans would also eliminate the corporate franchise tax over a two-year period for businesses with 50 employees or fewer and no more than $2 million of profit, which wasn’t part of Cuomo’s published agenda.
Republicans proposed a constitutional amendment to limit growth in spending to the lesser of 2 percent a year or 120 percent of the consumer price index, an idea similar to Cuomo’s proposal. Another constitutional amendment to require the two- thirds vote for tax increases wasn’t part of Cuomo’s plans.
Joshua Vlasto and Richard Bamberger, spokesmen for Cuomo didn’t respond to e-mail messages seeking comment.
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