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Government Affairs Albany Update
November 20, 2009

Deficit Reduction

This week will end with no final agreement on closing New York's $3 to $4 billion budget deficit for Fiscal 2010. Yesterday, Senate Minority Leader Dean Skelos released a summary of what he said were nearly $2.6 billion in agreed to actions, including a $500 million reduction in state agency non-personal service spending and $381 million in across the board cuts in local assistance payments. The Senate GOP's release also included another $571 million in budget actions, including a $437 million reduction in budget additions and restorations imposed by the legislature in passing the final Fiscal 2010 budget. These “agreed to” provisions, and additional deficit reduction actions proposed by the Senate Minority, are available here. Senator Skelos' press statement is available here.

The Business Council continues to push for spending cuts to close both this year's deficit, the looming $6 billion structural deficit in next year's budget, and what the Division of Budget has projected as more than $40 billion in aggregate structural deficits over the next three fiscal years.

IDA Wage Mandate Proposal

The Paterson Administration has issued a “discussion draft” of IDA (industrial development agency) reform legislation. We believe this proposal, if enacted, would adversely impact most IDA financed projects by imposing costly wage mandates on project developers and occupants.

In brief, this bill would impose wage mandates for construction, building maintenance and permanent on-site jobs at most private and non-profit projects receiving IDA financial assistance. It also re-establishes IDA financing authority for a limited number of “civic facilities.”

The Business Council believes this and other IDA wage mandate bills will significantly erode the value of IDA financial assistance, particularly upstate.

We are looking for input from member companies that have done, or are considering, IDA backed projects. Specifically, we are looking for input on the impact that these wage mandates would have on projects, and your view on how these mandates would affect decisions to use IDA financing and/or pursue capital investment projects in New York State.

Governor Paterson has told the Council that he does not intend to move this proposal, and it was intended to generate input and discussion.

Lawsuit Reform Advocacy Continues

A new study of New York's legal system conducted on behalf of The Business Council and New Yorkers for Lawsuit Reform (NYLR), a statewide coalition of business, health care and consumer groups, has concluded that New York's legal system is the third worst in the country and is costing taxpayers millions of dollars through higher taxes and increased costs for goods, insurance and health care.

The Council believes that savings derived from reforming the system would go a long way towards reducing New York's multi-billion dollar budget deficit. The study was conducted by Pacific Research Institute (PRI), a nationally known research firm.

Walter Pacholczak, the Council's Director of Government Affairs and a founding member of NYLR, met this week with the editorial boards of The Buffalo News, Rochester Democrat and Chronicle, Syracuse Post Standard and Albany Times Union to discuss these new findings.

The findings of the PRI study were reported by the following: NY PostNY suer system stinks; NY Daily News - To dig out of the hole, N.Y. must expand economic freedom; National Center for Policy Analysis - TO REVIVE NEW YORK'S ECONOMY, ATTACK LAWSUIT ABUSE; Lawsuit Reform Watch - Note to New York: Cut Lawsuit Abuse First; News Channel 34 - Independent Study Finds New York's Legal System Among Worst in the Nation. In addition, several radio stations reported about the PRI study.

Business Council Testifies On IT Contract Restrictions

The Business Council testified before an Assembly hearing on the use of private-sector IT consultants by state agencies. The Assembly committees are seeking to in-source much of state agency IT consulting, positing that in-sourcing will save money. Business Council testimony focused on the need for policy and budget makers to get relevant data to better inform how and where state agencies are spending their IT budgets and for the need to distinguish between the government role is delivering mission critical services, and the means by which those services are developed. While the State CIO and Commissioner of Civil Service testified to actions they have been taking to ensure they have a ready, trained and flexible IT civil service staff, the Public Employees Federation testified that state agency managers use of outside IT consultants is too costly and stunts their promotional ladder.

On a related matter, this week Governor Paterson introduced a program bill as part of the extraordinary session which will allow state agencies to hire up to 500 IT professionals at other than entry level civil service positions, for terms up to 5 years, outside the civil service system. The bill memo notes that this bill will have positive budget implications as state agency personnel are less expensive than private-sector IT consultants. This bill passed the Assembly and is awaiting Senate action, where it is expected to pass next week.

Business Council Opposes NYC Sick Time Mandate

The Business Council, in conjunction with the Chambers of Commerce from all five city boroughs, testified this week in opposition to the New York City Council's proposal to mandate paid “sick time.” This proposal would apply to all private sector employers in New York City; employers of 10 or less would be required to provide 5 sick days per year; other employers would be required to provide nine days. These days could be used for the employee's own illness, or to respond to a range of other family situations. The Business Council and Chambers also held a press conference on the steps of City Hall, and organized a number of employer panels and individual businesses to testify at an afternoon hearing held by the City Council's Committee on Civil Service and Labor.

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