Editorial

Drop surcharge on businesses

Jul. 25, 2011

Just when state lawmakers seem to be on track to make New York more business-friendly, along comes a new mandate that does the opposite.

The latest blow to businesses is the state requiring them to pay a surcharge on their taxable wages in the 2009-10 payroll year. The money collected will go to pay $95 million in interest that New York state owes the federal government for $3 billion it borrowed to pay unemployment benefits.
But there are alternatives to making already tax-burdened businesses pay, and Gov. Andrew Cuomo should direct the state Labor Department to explore them. Most promising is the fact that tax collections for the first quarter of the fiscal year were $799 million higher than projected. Why couldn’t a portion of that money pay the interest owed to the federal government?
Other alternatives are for the state to float bonds, as Texas is doing, or borrow the money, as California will. New York is one of just a few states putting the burden on employers.
Sure, it can be argued that the maximum of $21.25 per employee isn’t an outrageous amount for the average business, but it’s just one more deterrent to employers looking to hire more workers.
As for attracting new business to the state, the timing couldn’t be worse, as Cuomo launches economic development councils to woo employers.

Don’t think for a minute that out-of-state companies scrutinizing New York won’t see the surcharge as one more piece of evidence that the state isn’t quite yet “open for business,” as a new ad campaign will tout.
Cuomo mustn’t allow the state to take this backward step.
http://www.democratandchronicle.com/article/20110726/OPINION04/107260301/Drop-surcharge-businesses