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Government Affairs Albany Update

April 4, 2003

Litigation filed against Chapter 601 Laws of 2002-"so -called Union Neutrality"

A coalition of health care, mental health and developmental disability service associations has filed suit in federal court against Chapter 601 of the Laws of 2002. That law forces employers who receive any money appropriated by the state for any purpose to maintain detailed, audited financial records sufficient to show state funds were not used in any way to discourage a union organizing drive. The Business Council vociferously objected to the bill's passage last July.

The lawsuit was filed in the Federal District Court for the Northern District of New York. The lawsuit charges that the law is a violation of the first amendment of the United States Constitution. The lawsuit also charges that the law violates employer's rights under the National Labor Relations Act (NLRA) to express their opinions as to whether or not unionization would benefit their employees and to respond to employer questions about unionization. The Business Council wrote to the National Labor Relations Board asking them to issue an injunction preventing New York State from implementing the law.

Regulations to provide guidance on how an employer is to maintain financial records have yet to be issued by the state Department of Labor.

Conservative party leader urges lawmakers to reject higher taxes

Tax increases being aggressively promoted by unions would undermine New York's business climate and threaten the foundations of the state's free-market economy, a key New York State political leader has warned state lawmakers.

Union demonstrations promoting tax increases are powerful-"but the sound of businesses closing is deafening," Michael R. Long, state chairman of New York's Conservative Party, wrote in a letter to all legislators that was released April 4.

"The cost of running a business in New York State is at its saturation point," Long wrote. "Businesses and individuals simply cannot afford another tax."

Long's letter echoed data and arguments advanced in recent weeks by The Business Council and its research affiliate, The Public Policy Institute.

Unions have proposed a package or tax increases they are marketing as "closing loopholes." These proposals would:

Unions mounting successful demonstrations in Albany support of their demands, Long wrote, are "certainly hard to ignore, even harder to say no to. However, being an elected official, one has to consider all of the facts and one has to make the tough choices."

He noted, for example, that:

New York's state and local taxes on corporate profits are already third highest in the nation, 82 percent higher than the national average.

"To ask small businesses or even the larger corporations to pay more to satisfy the wants of demanding public employee unions indicates to me that New York State's economy would no longer be one based on a 'free-market', rather it would be based on a socialistic economy," Long wrote.

He noted that a multi-year tax cut enacted in 1987 had positive economic effects-until the recession of 1989 prompted lawmakers into deferring scheduled cuts, imposing a draconian 15 percent corporate surcharge, and raising other taxes.

"The result: nearly 275,000 private-sector jobs eliminated in 1991 and 80,000 the following year," Long wrote. "New York's recession lasted longer than the nation's because businesses were not willing to invest in a state that raised the cost of doing business.

"You cannot afford to make the same mistake."