The Unshackle Upstate business advocacy group Tuesday unveiled its prescription for the sputtering upstate economy: deep tax cuts and a lifting of the moratorium on shale gas drilling.
The plan calls for more than $800 million in tax cuts for businesses and individuals, coupled with an end to state restrictions that have prevented natural gas drilling in the Marcellus Shale that lies beneath portions of upstate New York.
“This five-point plan will reduce taxes for people and businesses that need it the most,” said Brian Sampson, executive director of Unshackle Upstate, which unveiled its program during a news conference in Albany. “It will also create thousands of good-paying jobs and boost the upstate economy.”
Unshackle Upstate officials, along with many regional economic-development leaders, have long complained that the state’s high taxes and overly restrictive regulations have discouraged companies from expanding or moving to New York, leading to sluggish job growth and a steady steam of residents who have moved away over the years.
“Our New ERA for Upstate plan will help combat the burdensome taxes, high unemployment rates and population losses that have plagued upstate for far too long,” Sampson said, referring to the group’s economic-revitalization agenda.
The plan calls for:
• A 25 percent cut in the state income tax for upstate residents earning less than $50,000 a year, which would reduce state revenues by about $225 million annually.
• A phase-out of the state’s corporate franchise tax on upstate businesses over a four-year period. That reduction, which would reduce state revenues by $273 million in the upcoming fiscal year, would eliminate the franchise tax in four equal installments. The franchise tax would be reduced by 25 percent in 2014-15, by 50 percent the following year and by 75 percent in 2016-17. By the 2017-18 fiscal year, it would be repealed entirely.
• A 50 percent reduction in the state’s portion of the sales tax – to 2 percent, from 4 percent – for upstate counties that have had significant declines in population and high unemployment. The sales tax cut would reduce state revenues by an estimated $250 million.
• A repeal of the additional energy surcharge that was imposed on manufacturers several years ago, reducing state revenues by about $190 million in the fiscal year that begins in 2014.
• An end to the state’s moratorium on natural gas drilling in the Marcellus Shale and other shale formations across portions of upstate New York. Lifting the ban would generate about $78 million in revenues for the state in the coming fiscal year and yield even more money for the state in future years as drilling expands, Unshackle officials estimated.
The plan, however, faces some immediate hurdles, including a State Legislature that is dominated by downstate lawmakers, and budgetary constraints that would be worsened by the loss of nearly $800 million in revenue.
Sampson, however, noted that the total cost of the Unshackle plan amounts to 0.6 percent of the projected state budget for next year.