By Orlando Lee Rodriguez
Noting that state taxes have not been this low since “Jackie Robinson played for the Brooklyn Dodgers,” New York State Governor Andrew Cuomo announced on Friday that the state legislature passed its 2013-14 budget before the April 1 deadline, the third year it’s been on time.
But the budget, which includes a new, middle-income $350 child tax credit and raises the minimum wage to $9.00, does not offer tax relief to members of New York’s real estate business community who are among the state’s top 2% of income earners. Tax relief for them, will have to wait at least another year.
“I had hoped to be able to reduce taxes on the very rich by ending the so called “Millionaires Tax,” Cuomo said in a statement. “However, the economy is not rebounded and we could not lose roughly $2 billion in revenue at this time.”
But the news was not completely negative for real estate.
$800 billion of this year’s budget will be dedicated to providing tax relief to business entities. $50 million will be added to a venture capital fund to provide seed and early stage funding for businesses.
“The budget we passed is a real transformation plan for a new New York,” Cuomo said. “Cutting taxes sends a positive sign to businesses that New York is a pro-business state and it gives relief to New York taxpayers who have long been overtaxed.”
$4.25 billion will be allocated for the MTA and $1.9 billion for highway construction. $14 million will be allocated for airport facilities.
“This budget is a victory for our transportation infrastructure, it increases funding to improve roads and bridges across New York,”
said Richard T. Anderson, President of the New York Building Congress “It gives a critical funding boost to the MTA, and adds some real transparency to capital programs so that the public can make sure the State is funding and completing projects.”
While transportation infrastructure improvements are sure to have a positive residual effect on real estate, it is the state’s decision to close two prisons that may be the best news of all for city developers.
To save an additional $20 million, the state will close the Bayview Correctional Facility near the High Line on West 20th Street. The prison, which will close this year, sits in the shadow of 100 Eleventh Avenue, a luxury condominium designed by French architect Jean Nouvel.
100 Eleventh Avenue, which opened in 2008, had units priced between $1.6 million and $22 million when it first opened. All of the apartments in the glass tower sold out, despite the prison being located next door. Brokers found a way to put a positive spin on it. Now they will no longer have to.
“We called it the naughty girls’ club,” Holly Parker of Douglas Elliman said to the New York Times last year. “We never said the p-word.”
Either way, the future of the prison site will be sure to interest developers.