Blakeman Warns Hochul Tax Plan Hits Businesses Hard

Nassau County Executive and Republican gubernatorial candidate Bruce Blakeman is sounding the alarm over what he calls a “secret business tax” in Gov. Kathy Hochul’s proposed FY 2027 budget, warning it will ripple through New York’s economy in ways many families won’t immediately see, but will ultimately feel.

At the center of the controversy is a technical but consequential shift: requiring businesses to spread out (amortize) research and development (R&D) costs over several years, rather than deducting them immediately. While framed by the state as a conformity measure with federal tax rules, critics argue the change functions as a significant near-term tax increase, estimated to generate about $1.68 billion in additional revenue.

For businesses, especially smaller, innovation-driven firms, the impact is immediate and tangible:

• Cash flow strain: Startups and early-stage companies rely on upfront deductions to offset heavy R&D spending. Delayed deductions mean higher taxes now, reducing capital available for hiring, expansion, or product development.
• Investment slowdown: Companies may scale back or delay R&D projects, particularly in high-cost sectors like biotech and advanced manufacturing.
• Competitive disadvantage: Firms could shift future investment to states with more favorable tax treatment, weakening New York’s position as an innovation hub.
• Hiring pressure: With tighter margins, businesses may slow hiring or freeze workforce growth, particularly in technical and high-paying roles.

While large corporations may absorb the change more easily, small and mid-sized firms, often the backbone of local economies, are less equipped to manage the hit.

Blakeman argues these pressures won’t stay confined to boardrooms. Businesses facing higher upfront tax burdens may respond by raising prices where possible, trimming costs elsewhere, or postponing growth altogether.

Economists note the effects are less about immediate price spikes and more about long-term economic drag—slower innovation, reduced job creation, and diminished competitiveness. In that sense, critics say, the proposal risks quietly reshaping New York’s business climate in ways that extend far beyond the balance sheet.