NEW YORK, Dec. 15, 2010 /PRNewswire/ -- Today Empire Government Strategies (EGS), the Northeast's lobbying and grassroots organization, released an evaluation of New York State's failed Tax Amnesty Program today revealing how the state bungled an opportunity to collect at least $200 million in owed taxes. The study provides a full account of New York State's previous tax amnesty initiatives from 1985 to present and an analysis of other states' successes.
New York State lost more than $200 million in potential revenue as the result of a poorly executed delinquent tax recovery plan. The state is currently owed a staggering $2.5 - $4.2 billion from delinquent taxpayers. A combination of wavering and indifferent tax officials and a half-hearted execution led to a complete failure, with a gross collection of only $45 million, 82 percent short of the forecasted $250 million in revenue.
Highlighting New York State's lost opportunity is California's Tax Amnesty Program, which generated over $4.2 billion in 2005; Pennsylvania's, which collected $261 million this year, a 47.4 percent increase above the original estimate; and New Jersey's, which collected $725 million in 2009 or 625 percent over the forecasted amount.
"Temporary tax increases are not the answer," argues Jerry Kremer , Chairman of EGS, former Assembly Ways and Means Committee Chair and a 23-year New York State Assembly veteran. "Gimmicks, such as taxing tobacco, soda and drinks containing sugar, and raising vehicle registration fees are short-term solutions and rarely raise enough to meet the legislature's estimates."
New York has successfully executed multiple tax amnesty programs in the past. Since 1985, it has conducted three general tax amnesty programs that raised a combined total of $1.6 billion. In stark contrast, New York raised only 1.5 percent of that total in 2010 with its Penalty Interest Discount Program that was widely criticized by both business leaders and legislators for being poorly managed, insufficiently publicized, and having relied on outdated techniques.
The Voluntary Compliance Program lacked publicity, defined terms, and support from state agencies. Shockingly, the Department of Taxation and Finance inaccurately stated that, "no tax amnesty program was in place," on its own website. The only information made available to the public on the matter was a single press released issued on January 13, 2010.
SOLUTION: 3-PRONGED TAX AMNESTY PROGRAM
For 2011, Empire Government Strategies advises the implementation of a well-planned tax amnesty program - a protocol with a history of success in reducing state budget deficits and raising state government revenues. "Lawmakers in both houses must support a full amnesty program in an enthusiastic manner," says Anthony Figliola http://www.empiregovernmentstrategies.com/ourteam.htm> , Vice President of Empire Government Strategies. "Asking debtors to pay for past debts that may or may not have existed is futile. However, publicizing a program that provides debtors with an opportunity to pay back delinquent taxes is a way to repair the NYS budget and encourage regular tax payments - once a tax payer, always a tax payer."
Further, tax amnesty provides assistance to state and local governments to close budget deficits via unpaid taxes by both individuals and corporations. The program allows those with outstanding fees to make payments without additional penalties or risk of prosecution. In other words, the state can now collect money it has been unable to - a measurable benefit to New York State coffers.
To ensure a successful program based on proven tactics, the report recommends the following three steps:
Carrot and Stick: The "reward and punishment" model forgives all penalties and interest to encourage New York State taxpayer settlements while increasing collection enforcement and ramping up penalties for individuals that remain in a delinquent status. Once a taxpayer is on the books, they are prone to pay taxes on time.
Marketing Strategy: A well planned grassroots strategy is central to the success of a tax amnesty program in New York State. A successful public outreach program will accomplish two major goals: reach the greatest number of people and advertise the most convenient method of filing returns. It is recommended that a future amnesty program use direct mail, call centers, interactive websites, early sign-up opportunities and creative advertising.
Low Administrative Costs: The cost of marketing and program administration has remained low in comparison to the revenues of the tax amnesty program, generating a large ROI for the State of New York. The Penalty Interest Discount Program did not provide a sufficient ROI. Having both houses and the Department of Taxation and Finance on board will keep operation costs low and the program's carry-out timely. When the program reaches its final states, a public push will be made for stiffer penalties for future debtors, thus encouraging current and past debtors to comply with NYS tax laws.
For more information on the study or to receive it in full, please contact Jerry Kremer or Anthony Figliola of Empire Government Strategies at (516) 663-6684. More information on Empire Government Strategies is available at its website: www.empiregovernmentstrategies.com .
About Empire Government Strategies
Empire Government Strategies (EGS) is the Northeast's major lobbying and grassroots organization headquartered in Long Island with offices in Albany, New York and Washington D.C. EGS is headed by former Assembly Ways and Means Chair, Arthur "Jerry" Kremer. Mr. Kremer also was Chairman of Legislative Commission on Expenditure Review.
The Empire team has achieved great success in representing clients in Washington and Albany on complex legislative and regulatory issues. In addition, Empire has assisted private and not-for-profit corporations and local governments with access to federal and state grants. With a national network of seasoned government affairs professionals, EGS has developed solid regional public outreach programs for numerous private and public development projects.
Gaining support or opposition to legislation is no longer a simple one-one-one process. It involves recruiting allies at the local level who will express their views to their elected officials, who are often guided by business and community reaction.
SOURCE Empire Government Strategies