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Governor announces $2 billion in tax relief: What's the CNY impact?

By Joleen Ferris

Gov. Andrew Cuomo is proposing a tax relief package so large that he broke it off from the State of the State Address planned for Wednesday, and held a news conference releasing details of the plan on Monday.

The plan involves using a $2 billion budget surplus to reduce, or even eliminate, some state property and income taxes. The governor says there's a focus on upstate, because upstate needs it.

"We have focused on upstate New York on top of the overall economic focus because the economic problems in upstate New York are worse than downstate New York. And the economic trajectory of upstate has been worse for a long time," says Cuomo.

Part of the $2 billion tax relief proposal: The elimination of a tax in order to lure back to upstate an industry that they've lost over the past several decades.

"Just say our tax rate for manufacturing companies in upstate New York is zero because you can't beat zero," says Cuomo.

The governor also proposes reducing other taxes to their lowest rate in more than 40 years.

"New York State corporate income tax rate is now 7.1 percent; the commission recommends cutting it to 6.5 percent, which would be the lowest rate since 1968."

Property taxes are also proposed, but localities must adhere to certain criteria in order for their taxpayers to earn the benefits.

"First, the locality must stay within the property tax cap. We passed a property tax cap of 2 percent....year two of the two-year freeze, the locality must stay within that cap and they must take concrete steps to reduce costs through shared services and or consolidation," says Cuomo.

The governor says that, with roughly 10,500 separate governments in New York, that shouldn't be a problem. Local leaders agree.

"Consolidation has to be an effort on everyone's part and you're seeing that in small steps, especially in Herkimer County. I know there's been... we had consolidation efforts in the highway," says Herkimer County Legislative Chairman Vincent Bono.

The governor also is proposing raising the exemption threshold for estate taxation from the current $1 million to the federal threshold of $5.25 million for an individual's estate in hopes this will stop giving the elderly incentive to leave the state.

The proposals are subject to full legislative approval.

The entire State of the State Address happens Wednesday.

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