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Early Tax Collections Could Add $100 Million to Budget

By Mark Scott

Buffalo, NY – A little-known provision of the new state budget could provide the state with a $100 million windfall before the end of the fiscal year next March.

Companies in New York that had a $100,000 or more tax liability in 2000 must pay 30 percent of their estimated tax next March. That's five percentage points more than they had paid in the past. And that translates into an extra $100 million for the state's budget.

State officials say the one-shot revenue will provide a much-needed boost in a difficult budget year. But Mark Alessi, state director for the National Federation of Independent Businesses, says it comes as a surprise.

"It's probably the wrong idea at the wrong time," Alessi said. "What it does is it takes the money from businesses that they could use to invest in their own operations. Instead, it takes out of their hands and gives it to the state early."

The increase in the estimated tax payment will expire in three years.

Not everyone, however, is upset with it. The Business Council of New York State told the Albany Times-Union it's main objective during the recent budget negotiations was to maintain the $300 million in tax cuts scheduled to take effect this year.