New York will be reducing a payroll tax designed to help pay for public transportation that effects small business owners and the self employed. The move was announced on the heels of another announcement that the state will be giving regional councils $785 million to support job creation. The Cuomo Administration hopes that by taking a localized approach through regional councils, economic development initiatives will be more targeted and effective.
The MTA payroll tax cut is the latest in several moves by the Cuomo Administration to make New York’s economy fairer. Currently, the state adds an additional tax to all state payrolls and the income tax on self-employed people in order to help pay for the New York’s expensive public transit infrastructure. Under the terms of the new law, the tax will be eliminated for 289,000 small businesses, defined as those having an annual payroll between $10,000 and $1.25 million, in the MTA region. Additionally, more than 6,000 businesses with payrolls between $1.25 and $1.75 million will see their payroll tax cut by either one third or two-thirds.
The self-employed individuals and public and private elementary and secondary schools will also be exempt from the tax going forward. The state plans to make up the lost MTA revenue through other sources. The tax cut was finalized as similar moves to extend payroll tax relief at the federal level have stalled out in congress.
In addition to the tax cut, the state will also be giving regional councils a slice of $785 million to create targeted economic development and job creation programs. Under the regional councils plan, the state is divided into ten regions. Each region submitted an economic growth plan to the governor with requests for support funding.
“The plans submitted by all ten regions were truly extraordinary. For the first time, we are putting the power of the State Government behind the innovation of our people, giving them the tools to rebuild our economy,” Governor Cuomo said in a statement.
The regional councils held over 100 public meetings in order to craft the plan with the input of local stakeholders and residents. In addition to the strategic planning grants made available through the Regional Council initiative, a Consolidated Funding Application (CFA) was created to give businesses and other entities streamlined and expedited access to economic development funding from nine state agencies and 29 existing programs. Some projects will also be given funding through the state’s energy efficiency incentive program.
A full list of programs and their awards is available here.
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