John Batiste hears the spin coming out of Albany about how New York is open for business and wonders how this could be the same state that, until two months ago, was pushing for a 45 percent hike in the Thruway tolls on trucks.
Batiste, a former Army general who now is president of Klein Steel Service in the Town of Tonawanda, sees the ongoing fight to make New York a more business-friendly place in military terms. While there’s been some progress, the battle is far from won.
“The fog is lifting,” he said. “What we need to do, as the business community, is to maintain contact. We need to keep pushing.”
To be sure, there have been some significant advances that will help make New York a better place for business. The regional economic development councils have taken an economic development bureaucracy that dictated policy from Albany and gave community and business leaders a real say in developing a plan that plays to each area’s strengths. The promised Buffalo Billion is giving the council even more economic ammunition.
Gov. Andrew Cuomo’s budget proposal would reverse a $3.5 billion deficit accumulated by a state unemployment system that currently pays out more in weekly benefits than it takes in through the taxes it imposes on employers. The budget plan also would make significant reforms in the state’s long-criticized workers’ compensation program that could save as much as $900 million a year.
“The New York business community, for a number of years, has been in a fog,” said Brian Sampson, the executive director of Unshackle Upstate, a business-backed group that has been pushing for lower taxes and relief from what it sees as onerous and costly regulations and state laws.
“You never knew what was going to hit next, but you knew it wasn’t going to be good,” Sampson said. “In the last couple of years, the fog has gotten thinner.”
But E.J. McMahon, a senior fellow for the conservative Empire Center for New York State Policy, said all the spin about the state being open for business is far too premature.
“We need to get the governor and Albany to take down the ‘Mission Accomplished’ sign,” he said. “We’ve got to do a lot more.”
McMahon said the economic development councils have succeeded in generating a serious discussion about the strengths and weaknesses of each region and the obstacles they face in the quest to invigorate the sluggish upstate economy. But McMahon, a self-described “skunk at the garden party” said the discussion, so far, has been pretty one-sided.
“My impression is that the regional councils are here, mainly, to make an impression,” he said.
More important, McMahon said, is to continue with the harder tasks of easing the state’s regulatory burden and reducing the cost of government.
Until that happens, the state will have to keep relying on doling out lucrative incentives to the smattering of lucky businesses that manage to convince state officials that they can’t do without a handout that, for projects like Albany Molecular’s new facility in the Buffalo Niagara Medical Campus, can cost taxpayers upwards of $50 million for 250 jobs in the rosiest of scenarios.
“The most important thing this whole effort is about is creating a region that competes better for private investment and not just a few scraps from Albany,” McMahon said. “The handing out of checks is not significant economic development – unless you’re getting one.”
McMahon is especially critical of Cuomo’s downstate-centered proposal to dole out more than $400 million a year in tax credits for movie and television projects.
“It’s a very glamorous, high-profile business that’s populated by people who are very generous with political contributions,” he said. “If you’re not paying attention, you’re going to be taken advantage of.”
Unshackle Upstate’s Sampson said the best economic development approach often isn’t the sexy one. Usually, it’s more important to focus on helping businesses that already are here.
“We don’t do a good job of retaining businesses,” he said. “The simple fact of the matter is you have businesses here already. Focus on them.”
“Most of the businesses here aren’t going anywhere because they have roots here. Let’s figure out how to expand those roots.”
Sampson also said there’s still a glaring need for reforms in a handful of state laws that have long been targets for the upstate business community. Those include the Taylor Law, which regulates how governments and labor unions negotiate contracts, and the Triborough Amendment, which keeps the provisions of lapsed contracts in place pending a new agreement, as well as the Scaffold Law, which holds contractors automatically liable if a worker falls from a height, even if the worker contributed to the fall. There’s also the Wicks Law, which critics say drives up costs by requiring multiple contractors on government projects.
And while Cuomo’s proposal for a new, less lucrative tier of pension benefits for state workers will help reduce government costs, Sampson said more mandate relief is needed.
“There have been small steps, but we haven’t done enough,” Sampson said. “The mandate relief that has not come from Albany is going to be the noose around the neck of upstate taxpayers.”