Government Affairs Albany Update
July 22, 2011

Regional Economic Councils Framework Released; Aggressive Timeline Set Forth

Staff Contact: Ken Pokalsky

Governor Cuomo released on Wednesday “Open for Business,” a guidebook which frames the purpose and assignments for the Regional Economic Development Councils (REDC). Consistent with his campaign, state of the state and budget messages, the ten REDCs - which will serve as single points of contact for economic activity in the region - are tasked with five primary responsibilities:

Membership on each council will include:

The Empire State Development Regional Direction will serve as the executive director of each REDC; state agencies will participate in and provide support to the REDCs.

In addition to the 10 REDCs, a Chairman’s Committee will be convened by the Lieutenant Governor at least quarterly to evaluate and advise on issues affecting multiple regions; better alignment of statewide assistance programs; and to strengthen communication between the state and REDCs. Membership on the Chairman’s Committee will include the vice chairs from each REDC, statewide stakeholders and state agency and authority heads involved with each council.

REDCs will need to have an aggressive schedule to meet a due date of November 14, 2011 for the submission of an initial strategic plan with clear metrics to measure progress and success. These plans will be reviewed to allocate the initial $200 million in capital funds and tax credits to be awarded competitively with the top four regions receiving up to $40 million each ($25 million in capital; $15 million in Excelsior tax credits). The balance of the remaining funds - $30 million in capital; and $10 million in tax credits - will be distributed among the remaining six regions.

REDCs are encouraged to use workgroups comprised of stakeholders and community members beyond the membership on the REDC; and each REDC must have at least two public forums in addition to Council meetings to solicit feedback and comment from the public on their plan development. A suggested timeline for the initial REDC work can be found on page 36 of the guidebook.

A summit is planned for September to convene the membership of the 10 REDCs and other interested parties and to provide further context around the consolidated funding application, available resources, and expectations.

More details on the process, REDC membership, and all strategic plans will be posted on a new website: www.nyopenforbusiness.com

Chapters and Vetoes

As of July 21, the Governor has signed 220 bills into law. Among the more recent chapters include Chapter 219, which conforms provisions within New York’s insurance law with provisions mandated in the federal Affordable Care Act; Chapter 195, which makes changes to the composition of the State Energy Planning Board and streamlines its planning process; Chapter 183 which extends through December 2014 health premium rate differential for sole proprietors; Chapter 162 which codifies in law the Centers of Excellence program and requires an annual plan from the centers for commercialization of their products/innovations; and Chapter 134 which extends through December 2013 the Self-Employment Assistance Program funded through the state’s unemployment insurance trust fund.

Vetoes thus far have been few and far between – a total of 26, including 22 related to state budget items.

Workers’ Comp Rates to Increase; Repayment of UI Trust Fund Borrowing Commences

Staff Contact: Lev Ginsburg

Although not unexpected, the UI Interest Assessment Surcharge bills have hit employers for the first payment on the interest owed on the $3.2 billion federal borrowing to maintain the state fund’s ability to continue benefit payments. Averaging about $21 per worker, the $95 million interest payment is due before the end of the federal fiscal year, September 30, 2011. The interest on any borrowing was waived in 2009 and 2010, pursuant to language in the federal stimulus bill. Interest on all outstanding balances started to accrue at the beginning of 2011, and repayment of the principal will commence at the end of this calendar year for all tax-rated employers. Given Congressional inaction on the President’s FY 2012 budget proposal to waive two more years of interest on outstanding UI loans, interest has resurfaced in whether the business community (which is statutorily obligated to repay both the interest and the principal) is interested in pursuing revenue bonds to repay the debt at a potentially lower overall repayment cost.

The State Insurance Department approved late last week a modified loss cost rate filing for workers’ compensation premiums, effective October 1, 2011, for products offered in the commercial market. Loss costs are the actual claim expenses, for workers' compensation coverage, established by the New York's Insurance Department, upon recommendation from the Compensation Insurance Rating Board. Based upon New York State employers' experience and future projections, the CIRB recommends a percentage increase or decrease in the loss costs to the Insurance Department each year. The approved rate for the new plan year is 9.1%, exclusive of any assessment surcharges.The Department’s decision can be found here.

Procurement Committee Hears from Administration Officials

Office of General Services Commissioner RoAnn Destito, Division of Budget Director Bob Megna and Division of Budget Deputy Director Ron Greenberg attended a packed meeting of The Business Council’s Contract Procurement Committee last Tuesday, July 12. The three discussed post session priorities related to implementing the strategic sourcing initiative and implementation of procurement mandate relief items contained within the Tax Cap law.

The hour and a half long meeting shed light on where the administration saw this initiative going and where they wanted to take it. The Administration is taking “enterprisewide view” with the strategic sourcing initiative being phased in. They stressed that this is a collaborative process with the agencies, not a top-down directive. Centralizing procurement activities is key to ensuring the state is maximizing its advantage in procurement of both goods and services. “Instead of agencies looking vertically, we need to look horizontally, across agencies” Bob Megna said. Their initial focus will be on real estate, IT, call centers and email management. As more “waves” are unveiled, the next set for October 2011, Commissioner Destito said that all services would be looked at the same as commodities in the first “wave” that was revealed in May 2011. All three said that they would implement these changes at a steady pace so when problems arose they would be better situated to adapt and change.

Tell Congress to Act on Debt Ceiling

The Business Council with our partners the U.S. Chamber have created a new action alert to send emails to lawmakers related to the debt ceiling debate. Our stance is that the ceiling must be raised in order to avoid a devastating default. The need to raise the debt ceiling provides leverage for meaningful, long-term, bipartisan action to rein in long-term deficit spending and entitlement reform. Financial markets would be reassured and we’d avoid a potential spike in interest rates, which will only stall our struggling economy.

Public Policy Institute Update

Based on data from a recent Marcellus Shale Coalition report, the Public Policy Institute (PPI) estimates that 250,480 jobs could be created if New York drilled 2,000 new wells.
The full PPI update can be found here.

Click here for the PPI’s full study on the economic benefits of natural gas drilling in the Marcellus Shale.

Finch Paper’s Raccuia Elected to Board of Directors

The Business Council’s Board of Directors is pleased to welcome its newest member, Joseph Raccuia, president & CEO of Finch Paper in Glens Falls. Mr. Raccuia was elected to the Board of Directors at its July 19 meeting at The Otesaga in Cooperstown. Finch Paper has been a member of The Business Council since 1914, and Joe has led the company since 2009. Finch is one of the largest employers north of Albany and a vital part of the Adirondack regional economy.

Business Council to Recognize Outstanding Chambers

The Business Council is seeking nominations for its Chamber of the Year Awards to be presented at the Annual Meeting in September. Three awards will be presented to those chamber organizations that make doing business in New York State a better experience for their members. The nomination deadline is close of business on Tuesday, August 16, 2011.