It’s just silly when a bunch of Texas cowboys sign petitions saying they want to secede from the United States, as if all such questions weren’t resolved at great cost 150 years ago. Yes, they actually did that recently.
But it’s not so silly when the Lone Star State’s governor, Rick Perry, starts running ads in New York and elsewhere in the Northeast trying to lure our best and brightest away with promises of economic dynamism and lower or nonexistent taxes. That’s something the Empire State should take seriously. Perry’s got a point, but the answer isn’t for our companies to leave, even in the rare case where that might be practical, but to improve the business climate here.
Gov. Cuomo’s new plan to make New York more business-friendly, called Tax-Free NY, would cut all state taxes for 10 years for companies that set up shop in or around SUNY campuses. Eligible firms would be those “with a relationship to the academic mission of the university, new businesses, out-of-state businesses that relocate to New York, startups and existing businesses that expand their New York operations while maintaining their existing jobs.”
In other words, Cuomo seeks targeted tax breaks for select companies the state approves. That’s crony capitalism: a government picking winners and losers rather than letting the market decide. A better idea would be to calculate how much revenue would be lost under Tax-Free NY and then offer a tax cut totaling that amount to all businesses in the state, wherever they’re located and whatever they’re selling.
Regulatory reform, with an eye toward easing governmental control of the private sector, would also be helpful. Should it really take 1,000 hours of education to get a state cosmetology license? Or 250 hours to become a “nail technician”? The law says it does. And that seems excessive.
An even bigger problem for many businesses, especially the mom-and-pop shops that are such a staple of commerce in Queens, is the often outrageous way the city is fining them for the least little alleged code violation.
The Daily News, which has been highlighting the issue, just reported that one Queens discount store owner faces a $14,000 fine for carrying a little kid’s police kit, complete with plastic handcuffs, plastic badge and plastic gun. The problem was the gun, an undersized, brightly colored toy no one in his right mind could mistake for a real weapon. The barrel wasn’t plugged as the law demands. Since the store had 14 of the toys in stock, the owner was hit with 14 violations at $1,000 each, for items that cost him 65 cents apiece.
In Brooklyn, a bodega owner wanted to enlarge the state-mandated sign saying it’s illegal to sell tobacco to minors, so her husband photocopied it. Alas, the copy was in black and white, rather than red and white as the law demands. So the couple got slapped with an $8,000 fine — $1,000 for using the wrong color and $7,000 for not properly listing each of seven tobacco products the sign cites. Again, excessive. A customer testified in court and signed an affidavit saying the sign was properly displayed, but the judge didn’t care.
The mayor’s attitude about the skyrocketing summonses under his watch? “Just don’t do what we fine you for.”
This just happens to be the 50th annual National Small Business Week. To mark it, the credit card comparison company CardHub.com released a study ranking the best and worst cities for the employees of small businesses to live in. New York came in 16th place. Three cities in Texas, Houston, San Antonio and Dallas, finished in the top 10.
The best answer to Rick Perry’s siren call for corporate relocations would be a concerted effort to improve the business climate here, with reforms at both the city and state level. There are obviously plenty of places in which to start.