Another Day, Another Tax Undermining  New York Growth

by Contributor | April 24, 2026 6:44 pm

Last week, I wrote about New York state’s business-smothering taxes and overall dismal tax climate, being ranked worst in the nation on the Tax Foundation’s 2026 State Tax Competitiveness Index, the result of years of policies that make it more expensive to live here, let alone run a business. Instead of taking steps to improve our standing, Gov. Kathy Hochul and Albany Democrats are aiding and abetting our economic deterioration.

It was inevitable Gov. Hochul would have to break her “no new taxes” promise, given her perpetual record-high spending habits. The state budget is still in limbo—now nearly a month past the April 1 deadline—but one thing is clear: The final price tag will be higher than we can afford. To help close Mayor Zohran Mamdani’s city budget gap, she has proposed a pied-à-terre tax, which we discussed last week. Another proposal that has received far less attention, but is just as consequential to our business climate, is a change to how New York treats research and development expenses under our tax code.

Essentially, the plan is to break New York state away from federal rules that allow businesses to deduct research and development expenses. Last year, legislation was passed federally that allowed an immediate deduction of R&D costs. Gov. Hochul included a New York opt-out in her 2026-27 proposed budget, and it is likely to be approved by the Legislature when the budget passes (…don’t hold your breath). This amounts to higher taxes on innovative businesses that depend on research and development, including companies working on grid modernization, semiconductor manufacturing and clean energy technologies like solar and wind. It is a counterproductive move that will stall the very industries this administration routinely promotes. If this is what our governor considers a “friendly” business environment, I’d hate to see what an unfriendly one looks like.

This is yet another invitation for businesses to leave or never start here at all. It is fundamentally anti-innovation. Combined with federal regulations, New York businesses are forced to navigate more than 1 million regulations[1] that stifle innovation and slow economic growth. My colleagues and I believe New York should be doing the opposite. We should be removing barriers by cutting unnecessary government mandates and helping businesses expand, invest and stay in New York state. Our approach[2] to economic development is straightforward: remove the challenges instead of adding to them.

If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 19 Canalview Mall, Fulton, NY 13069 and by email at [email protected][3]. You may also find me, Assemblyman Will Barclay, on Facebook or X at @WillABarclay.

Source URL: https://oswegocountytoday.com/politics/barclay-opinion/another-day-another-tax-undermining-new-york-growth/

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