Assembly Announces Tax Cut Plan

The Assembly Majority’s tax–cutting plan offers $519 million in relief to those who need it the most — working families and businesses that create jobs. The plan builds on the Assembly’s tax cut record which has helped cut taxes by nearly $13 billion since 1994. By 2005, these tax cuts will save individuals and businesses over $15 billion — making New York a better, more affordable place to live, raise a family and operate a business.

The high cost of raising children has become an increasing challenge for families. This year, the Assembly’s budget proposal creates a new Child Tax Credit which will provide struggling New York families earning under $55,000 a year a state tax credit, based on their federal child tax credit, worth up to $100 per child. When fully implemented, this tax credit will save New York’s families with children $175 million per year.

Skyrocketing energy costs wreak havoc on family budgets. Last year the Assembly helped eliminate the Gross Receipts Tax (GRT) on industrial and commercial users. We also reduced the GRT on residential utility ratepayers — saving residential customers $175 million a year.

This year the Assembly’s budget resolution takes the next step and eliminates the Gross Receipts Tax altogether for residential consumers — saving $150 million statewide.

This initiative builds on the Assembly’s efforts to make powering our homes more affordable while avoiding the energy crisis that is currently threatening California.

Eliminating the GRT is just the beginning of the Assembly’s plan to cut energy costs for New York’s working families.

Last year, the Assembly championed reducing the marriage penalty tax — saving the average married couple in New York $110 a year.

Under that tax break, a married couple can now claim a $14,600 deduction — up from $13,000.

This year’s Assembly budget proposal builds on last year’s tax savings by eliminating the marriage penalty tax completely. By raising the standard deduction to $15,000 — the same deduction that couples living together but filing separately can claim — couples will save $40 million a year statewide.

Last year, the Assembly’s Empire Zone program was established to create virtually tax free zones for businesses and increase incentives for businesses to create the new jobs our families need.

This year our budget includes a $100 million expansion of the Empire Zone program which would help more businesses get the assistance they need to grow and create new jobs.

That includes doubling the size of all Empire Zones across New York. Businesses that qualify for the program receive a tax credit for paid property taxes, a sales tax exemption on the purchase of all property and services used, and a credit against tax liability for income taxes paid.

Under the Assembly’s proposal, eight new zones would be created, in addition to the six zones that will be established this year.

The Assembly plan also provides $30 million in tax relief to help clean up brownfields, as well as promote economic development of those areas. This funding will help businesses take advantage of abandoned sites — creating new jobs for working families.

Our budget also expands the state’s Certified Capital Company Program (CAPCO) — offering $100 million more in tax credits to insurance companies that invest in small businesses.

And to help lower the cost of air travel in New York, the Assembly proposal provides a Kero–Jet Fuel tax credit for fuel used in intrastate air flights. This tax cut would help save $4 million a year in travel costs.

Together these initiatives join a long list of Assembly–driven measures that make living and doing business in New York more affordable, including:

• creating an Historic Homes Rehabilitation Credit — saving $5 million annually;

• expanding the Low Income Housing Credit by $4 million;

• repealing the requirement that New York City municipal employees add back to their taxable federal income the value of pre–tax flexible benefit plans — saving them $5 million annually; and

• providing a ten–year property tax exemption for new railroad construction and capital improvements.

Thanks to the Assembly’s efforts over the past few years, the School Tax Relief Program (STAR) will be fully phased-in this year — giving senior homeowners a $50,000 property tax exemption and other homeowners $30,000 off the taxable value of their homes. This program will save New Yorkers $2 billion in property taxes. The Assembly is working to increase income eligibility for seniors based on cost of living increases. New York City residents currently also benefit from a reduction in the city income tax, including a school tax credit — which will save them $560 million this year.

Last year the Assembly passed several tax relief measures aimed at creating jobs and helping working families, by:

• increasing the Earned Income Tax Credit (EITC) for families with children — saving families $125 million a year

• increasing the Child and Dependent Care Credit for families with incomes less than $65,000 — a $25 million savings annually

• creating the College Tuition Tax Plan, which saves New York families with eligible college students $200 million annually

• creating a tax credit for people who pay for long–term care insurance to care for elderly or disabled family members

• expanding the Power for Jobs program to allow more job–creating businesses to save on their energy costs

• reducing the small business and S–Corporation tax rates, saving $20 million

• reducing the Petroleum Business Tax on heating oil used for commercial purposes, saving $7 million annually

• exempting sales tax on equipment purchases, saving the cable and telecommunications industries $15 million to spur high–tech growth.

This year the Assembly is following through on its commitment to working families and businesses across the state. Our new tax relief initiatives, coupled with our past tax cuts, will help families keep more of their hard–earned dollars, revitalize New York’s economy and ensure its prosperity well into the 21st Century.

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