NY Senate repeals 'cost-recovery tax' for economic development agencies
Here's a news release from State Sen. Michael H. Ranzenhofer.
The New York State Senate has passed legislation (S.2682), introduced by Senator Ranzenhofer, that repeals the “cost recovery” tax imposed on local economic development agencies in 2009 and also requires the state to reimburse agencies for any monies previously paid.
After being passed in the 2009-10 state budget, the cost-recovery tax hurt the efforts of local industrial development agencies to get New Yorkers back to work by taking away economic development money from local communities and sending more revenue to Albany.
"During a time of high unemployment and an economy struggling from a national recession, the IDA cost-recovery tax made a bad situation even worse,” Ranzenhofer said. “Repealing this unfair tax puts funds back in the right place, in the hands of local community business leaders to entice businesses to locate in the state and create jobs, not in state coffers."
The 2009-10 state budget contained a maximum $5 million statewide cost-recovery tax on local economic development agencies. The tax does not reflect a rational basis for actual costs incurred by the state for providing services to local economic development agencies. Local economic development agencies already pay a Bond Insurance Charge to recover costs.
Members of local economic development agencies expressed their support for the legislation. This tax, based on operating revenue, is a disincentive for IDAs to expand programming or reinvest back into the community.
"Senator Ranzenhofer should be applauded for introducing the legislation to repeal this unfair tax," said Genesee County Economic Development Center President and CEO Steve Hyde. "His fellow Senators who joined him to pass S.2682 also deserve congratulations for standing up against this unfair assessment.”
Governor Cuomo has also included an identical provision in his 2010-11 executive budget proposal.