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Business groups warn decoupling could deter investment; fiscal advocates press for revenue to offset federal cuts
Summary
Manufacturers and business coalitions told the joint committee that decoupling from select federal tax provisions could delay or cancel capital projects and cost long‑term investment, while fiscal advocates argued federal HR1 cuts create an urgent need for new state revenue to preserve services.
Albany — Manufacturers, business coalitions and fiscal advocates used the committee hearing to press competing economic narratives about decoupling from federal tax provisions and the state’s fiscal strategy.
Roll Roll, president of the Manufacturers Alliance of New York, told the committee that decoupling from federal research‑and‑development expensing and accelerated depreciation "moves us in the wrong direction," warning that the change could put nearly $30 billion of annual manufacturing investment at risk and particularly harm small and medium manufacturers that rely on accelerated cost recovery to finance capital projects.
"By decoupling we actually don't improve revenues. We just defer them," Roll told the panel, adding that capital‑intensive manufacturers make long‑term decisions and that cash‑flow effects could determine whether projects proceed in New York or in other states.
On the other side, Emily Eisner, chief economist at the Fiscal Policy Institute, said federal HR1 (the tax changes discussed at the federal level) will reduce federal support for programs important to New Yorkers and estimated large fiscal gaps that the state may need to fill. "FPI estimates the value of these federal tax cuts for top earners will be about $12 billion," she said, and argued the state must consider revenue measures to sustain Medicaid, SNAP and a universal childcare plan.
Alex Pena of the Partnership for New York City urged a holistic approach, warning members have reported hiring pauses and confidential relocation evaluations in response to policy uncertainty. "We don't solve an affordability crisis by squeezing the economy," Pena said; he recommended aligning tax policy with broader competitiveness measures.
Committee members pressed witnesses for data. The Tax Department said it will supply detailed tax‑file migration charts on request and highlighted that some long‑term federal benefits tied to opportunity‑zone holding periods will not materialize until later this decade.
The competing testimony leaves lawmakers balancing near‑term revenue needs against potential long‑term economic signals; staff will fold these arguments into one‑house budget proposals and fiscal analyses.
