Guest Op-Ed: Climate of Uncertainty for Businesses

By Assemblywoman Nicole Malliotakis (R-C, Bay Ridge, 60th District)

Unseasonable temperatures aren’t the only thing wrong with New York’s climate lately. Ask a current or prospective Empire State job creator and he’ll tell you that an atmosphere of sky-high taxation, stifling regulation and European-style labor laws has combined to create the worst climate for starting or operating a business in the country. Actually, the second worst — that’s the latest finding of the nonpartisan Tax Foundation’s “2012 State Business Tax Climate Index,” a study examining the effects of taxes in the 50 states.

The top performers in the index invariably had clear, straightforward tax systems that generated sufficient revenue while promoting competition and entrepreneurship. The losers offered their job creators complex tax codes with soaring marginal rates, which kept unemployment high and reduced expansion. By measuring the effect its corporate, income, sales, property, and unemployment insurance taxes have had on job creation, Tax Foundation analysts ranked New York second to last in the nation in tax-friendliness, right above perennial job-killer New Jersey. Our ranking is unchanged from 2011, when only California bested New York in its ability to scare employers away and punish those who remain.

Life would be easier for New York’s job creators and their employees if the Tax Foundation’s findings were simply the stuff of academic debate. They’re not. In the last decade, we have seen the real world consequences of Albany’s anti-business philosophy. Other states are gaining population — and the human capital, innovation and, yes, the tax revenue that comes with it — at New York’s expense. According to the Empire Center for New York State Policy, between 2000 and 2009, nearly 60 percent of the roughly one million who left our state moved to the South. Florida, which absorbed a third of this emigration over the same period, ranks number five in business climate. As it turns out, Albany does support one business: the moving company.

New York’s unemployment rate is 8 percent. Fifty-four percent of the jobs lost in the recession haven’t returned, despite some positive national economic signals. Now the state comptroller has said that our recovery could be “losing steam.” If we want to create more employment and promote long-term prosperity, there is no better way than reforming our job-killing tax code and the 49,000 pages of job-killing regulations that require businesses to do things like file endless amounts of unnecessary reports and force them into uncompetitive labor bidding processes. This month, we even saw a pizza shop fined over $5,000 for not providing employees with a polo shirt for every day of the week!

The Empire State’s winter of discontent need not last forever, and a springtime of renewal is just around the corner. The seeds of reform in Albany are slowly but surely beginning to bear fruit. We’ve begun that process by instituting a middle-class tax cut that will result in every New Yorker paying less taxes in 2012 than they did in 2011, as well as by repealing many provisions of the MTA Payroll Tax that discouraged job creation. Additionally, since I began pursuing public service, I have promised to fight for the return of the sales-tax exemption on clothing items under $110. This tax exemption was restored on April 1, the same day that New York passed its first early budget in 29 years. This certainly shows just how far state government has come during my short time in the Assembly.

We’ve accomplished significant change last year, and Albany needs to continue to repeal the bad policies that have hurt our economy for years.