ALBANY – With upstate communities continuing to bleed population, 2013 will be yet another year when state officials at the Capitol seek to try a new round of solutions to help create and retain jobs.
But whether any of the major wish lists of businesses get addressed – especially those dealing with long-standing laws that drive up the costs of owning a small or large business in New York – remains unlikely.
Gov. Andrew M. Cuomo has committed $1 billion in cash, tax breaks and cheap power to Western New York – dubbed the “Buffalo Billion” – in a bid to revive the regional economy. The offer also carries the extra push of the governor’s political clout, bringing state and national attention to the effort.
The first expenditure has been $200 million to help bring a division of scientific manufacturer Albany Medical Research to the Buffalo Medical Campus.
On the legislative level, earlier this month Cuomo proposed a range of ideas to help the upstate economy, from cutting the business costs of workers’ compensation and unemployment insurance to 10 clusters in the coming two years where various tax breaks will be given to high-technology companies to locate or expand.
The governor is also banking on new casinos to help upstate. Lawmakers are poised to approve the second passage of a constitutional amendment to permit up to seven casinos on non-Indian lands. Cuomo is proposing a separate measure to accompany that casino resolution, stating that the first phase of the casino expansion will be limited to three gambling halls that can only be located upstate.
Business groups have mixed thoughts on Cuomo’s economic development agenda for 2013 and hope to press lawmakers to add more oomph to the policy pot before the legislative session ends in June.
Brian Sampson, head of Unshackle Upstate, a business umbrella group, praised Cuomo for proposing to make workers’ compensation more affordable. He said factories in Western New York have lost business opportunities to sister facilities in other states, at times, because of New York’s high workers’ compensation expenses.
Sampson said businesses will also benefit from Cuomo’s plan to end assessments, imposed over the past two years, on companies to finance unemployment benefits. With the workers’ compensation and unemployment insurance proposals, Cuomo has estimated businesses will save $1.3 billion.
The governor is also proposing innovation “hot spots,” which will offer various tax breaks, including property tax relief, for high-tech companies that locate in certain areas in a competitive awards process. “It’s a good way for New York to do more tech transfer, which we’ve long been behind the curve on,” Sampson said.
But while Cuomo got some praise from business groups, the same organizations, as well as some lawmakers, say the governor is missing the opportunity to pursue a long-sought mandate relief package to help localities reduce expenses and thereby reduce property taxes instead of just capping their growth.
Cuomo’s State of the State address made no mention of going after certain statutes – with names like the Taylor law or the Triborough Amendment – that unions favor as serving to protect their members but businesses say hurt their ability to remain competitive with companies in other states.
And they say his plan to raise the minimum wage to $8.75 an hour – higher than even what Assembly Democrats had sought – will be a job killer.
“We’re already the 50th-worst tax climate in the country. Raising it to $8.75 is just going to make it harder for our businesses to compete,” Sampson said.
He said if Cuomo wants to help lower-income New Yorkers, he should push increasing the earned income tax credit for those residents instead of forcing businesses to raise wages.
Assemblyman Robin Schimminger, a Kenmore Democrat and chairman of the Assembly’s Economic Development Committee, said Cuomo needs to embrace an end to the state’s so-called “Scaffold Law.” That statute basically holds a property owner or contractor 100 percent liable if someone, such as a construction worker, is injured on the job, regardless of whether the employee might be at fault by, for instance, being drunk.
“This drives up the cost of building anything in New York, from a home remodeling project to a Tappan Zee Bridge,” Schimminger said of the multibillion-dollar bridge Cuomo is pushing to build across the Hudson River in the New York City area.
“New York state stands alone with such a provision,” he said.
Schimminger said he would like to see Cuomo’s innovation “hot spot” program move more quickly instead of picking just five projects in each of the next two years.
“If it’s a good idea, which one can argue it is, why not do all 10 in the first year? Why not do more?” the lawmaker said.
Schimminger said Cuomo’s focus on job creation is good but that he is sending a “mixed message” with some proposals, such as the minimum wage hike, about portraying New York as open for business.
“To the extent that the governor stays on a trajectory of improving the job creation climate in New York State, that’s good with me. In listening to the long list of new initiatives, one has to spend some time to ascertain the current trajectory,” Schimminger said.