By Jon Campbell
ALBANY- When lawmakers return to the state Capitol in 2014, they'll be met with no fewer than four reports recommending ways to re-work New York's oft-criticized tax policy.
On the heels of a report from Gov. Andrew Cuomo's tax reform commission last week, state Senate Republicans and a handful of liberal-leaning groups put out their own plans Tuesday for reshaping the state's tax code. A plan from another Cuomo panel looking at ways to cut taxes in the state is due next month.
In a 50-page report, the Senate GOP laid out a series of recommendations to change New York's tax policy, including a permanent 2-percent annual spending cap on the state budget, a two-thirds vote for any state tax increase and a requirement that any surplus be put to reducing taxes.
The plan, which was released Tuesday after the Republicans held a series of hearings across the state, also recommended reducing the state's corporate tax rates and adjusting income-tax brackets each year for inflation. A surcharge on utilities would expire by 2017 under the plan, while the state's estate tax would be scaled back significantly. It didn't say how much the program would cost.
"We are proposing a plan to greatly reduce the tax burden on New Yorkers at every level, making it more competitive for businesses to locate and grow here," Senate GOP Leader Dean Skelos, R-Nassau County, said in a statement. "There is nothing more progressive than empowering the private sector to create good-paying jobs."
Several progressive and labor-backed organizations had a different take. In their own series of recommendations, the groups -- including New Yorkers for Fiscal Fairness and the Fiscal Policy Institute --issued a five-point plan they said would close loopholes in the corporate tax code and re-structure the state's income tax rates.
Specifically, the plan would call for creating new income tax brackets for the state's highest earners while cracking down on corporate taxpayers and creating greater oversight for economic-development incentives. From that, the plan would increase aid to local governments and institute a "circuit breaker"-a property-tax break for households whose taxes take up a certain percentage of their income.
They estimated the circuit breaker would cost about $1 billion to $2 billion to establish.
Cuomo's Tax Reform and Fairness Commission was created by a 2011 law that maintained a higher income-tax rate on the state's top earners while modestly cutting the middle-class rate. It issued its report last week, recommending the elimination of a state sales tax exemption on clothing under $110 while taxing digital offerings like iTunes purchases and Netflix subscriptions. The report recommended using the additional revenue for property and income-tax relief.
A second Cuomo panel -- headed by former state Comptroller Carl McCall and Gov. George Pataki -- has been tasked with coming up with ways to reduce property taxes and is due to report by Dec. 6. New York, which installed a 2-percent property-tax cap in 2011, has among the highest property taxes in the nation.
Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, said he expects the state's tax policy to be a major topic of discussing when lawmakers return to the state Capitol in 2014, an election year from Cuomo and all state lawmakers.
"There's a dynamic where we're talking about the tax system -- and the fairness and adequacy of our tax system -- more so than we have in quite a while," Deutsch said. "I think this debate is going to be front and center along with the fact that we're under-funding our schools and our municipalities."
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