We Need To Support, Not Hurt, Manufacturers
Randy Wolken, President & CEO
We have a 2021-22 New York State Budget agreement. Like most budgets, it is a mixed bag. New York has just come through a challenging period with the double impact of the pandemic and the economic downturn. What we need most are efforts to spur economic growth. This budget does do essential things to help our recovery as a state. However, it also does damage to our economic competitiveness that may leave lasting impacts. We have much work to do over the next year. We will need to focus our efforts on growing jobs and recovering fully.
Yesterday, Tiffany Latino-Gerlock, our Director of Government Relations, sent out an update on the critical items in this budget that most impact our members. I won’t attempt to cover all of the items. But I will talk about a few that we are very supportive of and one that concerns us.
Items included in the budget that we supported and are excited about include the pass-through tax adjustment and another year of apprenticeship program funding for the New York State Manufacturers Intermediary Apprenticeship Program (NYS MIAP). Both are critical to manufacturers and businesses to encourage growth, hiring, upskilling, and investment as a part of our recovery. We are also pleased that the corporate tax increases did not include manufacturers. This was critical to preserving our competitiveness in a highly competitive, global manufacturing economy. The zero corporate tax rate for manufacturers, and its maintenance in the future, is vital to attracting and retaining top companies far into the future. New York State also supported US manufacturing in many crucial ways in this budget. With New York preferences where allowed, Buy American occurred in medical supplies and for our emerging green energy investments for structural steel and iron. This follows previous years’ efforts that made Buy American permanent for structural steel and iron for state contracts over $1 million for roads and bridges. The small business grant program and COVID-19 Recovery Workforce Development & Training Initiative will benefit manufacturers and the entire economy. These efforts are applauded and can help us regain our footing as a top manufacturing center.
The areas in the budget that will hurt our competitiveness are the personal and corporate tax increases. As we emerge from a deep recession and the impacts of the pandemic, these tax increases have the potential to have lasting negative consequences. The corporate tax increase is temporary and will elapse in three years. We must let this lapse so our businesses can compete in a highly competitive national and international economy. Also, personal income tax increases often encourage high earners to leave our state, robbing us of both talent and their spending that contributes to many essential community priorities, especially in fighting the impacts of poverty and other social challenges. Our tax climate matters significantly to economic activity, and we need to ensure it assists in our long-term success.
We will need the entire community to help us overcome the effects of the last year. The pandemic and its economic impacts will leave a profound mark on our future unless we pivot toward growth again. I am very hopeful we will shift to our recovery. We need to do so now. If we do, we will see manufacturers and technology companies invest and grow jobs. Reshoring of manufacturing and technology jobs is a genuine possibility for New York State. It’s time to get New Yorkers back to work in great-paying jobs that our members have open – and will continue to open – in the months to come.