Governor Cuomo, Main Street needs a hand from Albany

Covid-19 has completely changed the way we all live.

But along with worrying about keeping themselves and their families healthy, thousands of small business owners across New York state are losing sleep over how to keep this virus from killing the businesses they have worked so hard to build.

At the same time, lawmakers in Albany are trying to craft a budget in the face of plunging revenues. Sales taxes — much of them generated by small business — brought in a whopping $73.6 billion last year. Our schools, as well as other vital government services, rely on these funds. When a business fails — and too many are on the precipice of failure right now — that sales tax revenue goes, too.

We believe a simple proposal could help restart local business and bolster sales tax revenues, but swift action is required by Gov. Andrew Cuomo and the State Legislature.

Small businesses are the backbone of our communities. Everyone wants a thriving downtown where they can shop, eat or go to a movie. The good news is that small businesses have always been engines of innovation and entrepreneurship, and we are seeing that again today as they adapt to the new reality. Local gyms are streaming personal training sessions. Restaurants offer free delivery and online happy hours. Medical practices are expanding their telemedicine capabilities. Car mechanics are making house calls that require no personal contact at all. 

Of course, it’s vital that these businesses let potential customers know about their services. That’s the role of advertising in all its myriad forms. But advertising costs money, and the sad truth is that advertising is one of the first things small businesses cut when times are tough.

Put yourself in the shoes of a local restaurateur with a stack of bills and very little money coming in. By the time she finishes paying the most urgent bills — rent, food suppliers, payroll — there’s not much left for advertising. Whatever stimulus money she gets from Washington or Albany will most likely be needed to keep the door open and the lights on. Yet studies show that how well businesses survive a downturn is in large part determined by whether they continue to market and advertise during the hard times.

Fortunately, there is a way for Albany to prime the sales-tax pump to keep revenue flowing to both small businesses and state coffers. Let businesses use some of the money they would have sent to Albany, as sales taxes, to market their new offerings. The formula would be simple: Every dollar a small business spends on advertising (up to some reasonable limit) would be a dollar saved off that business’s sales tax bill. 

It would be a win-win-win. Local businesses would be healthier because the increased advertising would jump-start sales. The state would get more sales tax revenue because local businesses would be selling more. And media companies (like ours) would benefit from the additional ad revenue. We’d like to think that we, too, are vital to the character and strength of our communities, not to mention our democracy. Think for a moment of the critical role that journalists have played in getting vital local information out to your community during this unprecedented crisis.

The Legislature has a lot on its plate right now, and the temptation will be to bury this idea, or to take the shortsighted view that we can’t afford to do it right now. But right now is when it’s needed. We’ve been impressed with Governor Cuomo’s levelheaded leadership in this crisis, and we call on him to back this innovative yet simple policy.

– This editorial was submitted by the New York Press Association. Newspapers endorsing the message from across the state are publishing this piece.