The 2012 Fix New York Agenda

Advocating for Business... Working to create economic growth, good jobs and strong communities across New York State

The 2011 session was generally a positive one for the state’s business community. By controlling spending and avoiding new business taxes, New York has set the stage for restoring its economic competitiveness.

In 2012, The Business Council’s legislative agenda focuses on maintaining and building on the state’s fiscal discipline, improving the state’s overall business climate and reducing state-imposed business costs and barriers to new investment and job growth. Our agenda for the upcoming legislative session will focus on:

• Imposing limits on new spending growth, and adopting additional fiscal reforms including a new pension tier
• Rejecting new or increased business taxes, fees and assessments in the state budget
• Instituting real mandate relief for localities to allow them to manage their own spending levels under the real property tax cap
• Reforming the state’s SEQRA, permitting and other programs to provide predictable, workable time frames for the approval of new investment projects
• Finalizing regulations to allow for the safe and timely development of the Marcellus Shale
• Adopting broad reforms in the state’s business taxes to reduce compliance costs and make the state’s tax code more supportive of in-state investment and job creation
• Reforming the state’s rigorous, expensive regulatory climate to eliminate unnecessary and inefficient compliance mandates
• Opposing new group health coverage mandates, which drive up employer and employee costs and make group health plans increasingly unaffordable
• Reducing lawsuit costs, including adoption of long-needed reforms to the state’s so-called scaffolding law, and rejecting expansion of the state’s “Martin Act”
• Promoting public-private partnerships and other procurement innovations such as design build to promote, and get the most out of, new investment in public infrastructure
• Reforming education funding programs to incentivize improved outcomes in K-12 and higher education, to assure that New Yorkers can meet the skill needs of a technology-based economy
• Supporting a constitutional amendment to allow casino gaming

We made great strides in 2011 by working together to improve the business climate in New York, and promoting private sector investment and job creation.

I look forward to partnering with Governor Cuomo, the Senate and Assembly and, most importantly, our members, for an even more successful – and job filled – 2012.

Heather C. Briccetti, Esq.
President and CEO
The Business Council of New York State, Inc.

New York's Jobs Deficit Construction Contract Procurement Corporate Governance Economic Development Energy Environment Financial Services Fiscal Reform Health and Health Insurance

Labor Mandate Relief Taxation Telecommunications Tort Reform Transportation Travel and Tourism Unemployment Insurance Workers' Compensation Workforce Development

New York's Jobs Deficit

Going into the 2012 legislative session, almost everyone’s focus will be on jobs.

While New York can do little to change national and international economic trends, it can have a dramatic impact on the state’s economic climate. Changes must be adopted to make New York’s economic climate more competitive and encourage future growth.

New York has many economic advantages, including a skilled workforce, strong higher education, ample natural resources, and proximity to major markets.

But New York’s economic performance has been unacceptable. Private sector job growth has lagged behind national levels for more than a generation. Since 1960, U.S. job growth has been four times that in New York State. Furthermore, we have done poorly in both the number and quality of jobs. In the last decade, New York lost 496,000 jobs in the state’s eight top paying private sector industries - finance/insurance, management/administration, utilities, information, professional/tech service, wholesale trade, construction and manufacturing. These sectors pay high salaries and produce significant tax revenues and economic spin-offs.

In contrast, virtually all job growth in New York in the last ten years has been in below average wage sectors, including health and social services, which rely on significant government funding.

New York is replacing high paying jobs with lower paying jobs. It is replacing jobs that compete in the international economy with jobs that are tied to local markets and state and local government funding.

New York has a high state and local business tax burden; among the highest energy costs in the nation; stringent, complex and expensive regulatory requirements; an adverse labor law and liability climate; and other state-imposed barriers to new investment and the creation and retention of private sector jobs.

Based on this experience, it is obvious that we need to improve the state’s overall economic climate. Economic growth is the only long-term means to improving the well being of New Yorkers and assuring adequate and appropriate government services and public infrastructure.

Highlights of The Business Council’s legislative and regulatory agenda for 2012

Construction

New York has lost thousands of construction jobs due to the economic slowdown and a poor in-state climate for new capital investment. To reverse these trends, the state should:

• Authorize innovative methodologies including Construction Manager at-Risk, Design-Build, and Public-Private Partnerships. Enacting the Innovative Infrastructure Development Act (S.5445/A.8487) is a good start.
• Reduce the cost of construction by repealing the Wicks Law, reforming the Scaffold Law, and enacting the Public Construction Savings Act.

Contract Procurement

The process of selling goods and services to state government is increasingly cumbersome, with more businesses, including M/WBEs, bypassing this significant business opportunity. New York needs to make the procurement process more efficient, while assuring fair and reasonable bids. New York should:

• Provide “rules of engagement” for the business/vendor community on Strategic Sourcing which will enable them to adequately plan for new bids
• Work with the Administration to ensure necessary information exchange between vendors and the Administration
• Promote piggybacking on GSA schedules by municipalities and school districts, as authorized by 2011 mandate relief procurement reforms
• Streamline M/WBE certification process to encourage more New York State businesses to become certified
• Adopt reasonable regulations for use of placement agents in dealing with the state retirement funds

Corporate Governance

It is critical that the State promote public confidence in corporate governance while avoiding mandates that make New York uncompetitive with other states. New York should:

• Oppose mandates that corporations obtain majority shareholder approval for political donations or communications on public policy issues
• Oppose mandates for remote shareholder participation and proxy voting at shareholder meetings

Economic Development

As New York improves its business climate, we support measures that open new investment opportunities and effective, targeted economic incentive programs to support investment in strategic industries. We need to:

• Support reasonable/appropriate environmental safeguards for timely development of the Marcellus Shale
• Adopt a new, refundable research and development tax credit for R&D related capital investment, qualified research expenses, and other directly related R&D expenses efforts
• Extend and expand the “qualified emerging technology company” tax credit for capital, operational and training investments
• Adopt legislation broadening the list of eligible projects for “tax increment financing” and allow school districts to opt into these local funding mechanisms

Energy

Reducing energy costs and promoting adequate and diverse energy supplies will help support economic growth. New York should:

• Repeal the recently enacted increase to the Public Service Law 18-a assessment and avoid new energy taxes and assessments
• Assure the cost-effectiveness and need for any programs financed by state imposed charges before such charges are reauthorized or increased
• Oppose state-level, economy-wide GHG emission reduction mandates
• Support relicensing of Indian Point Power Plant
• Promote investment in transmission and distribution infrastructure necessary for system reliability and to support deployment of renewable generation

Environment

New York has a stringent environmental regulatory program that imposes costs and operational restrictions on business and impedes capital investment and job growth. The state needs to:

• Improve SEQRA and permitting programs to give business a more certain, workable timetable for the environmental review of major investment projects, including a more appropriate standard for adjudicating issues in DEC permit hearings; assuring that regulatory timetables for project reviews are adhered to; creating an expedited process for applications that meet certain criteria (e.g., replacement projects, pollution reduction, etc.); and integrating coastal zone reviews with other state environmental review requirements
• Amend its new source review regulation to eliminate unnecessary restrictions on investments that improve efficiency and competitiveness and/or reduce emissions and energy use
• Expand the brownfield program to extend eligibility to Class 2 state superfund sites and RCRA sites, for cleanups proposed by non-responsible parties

Financial Services

New York needs to support and encourage its largest economic sector (by share of gross state product and total payroll) in the face of the ever-growing global competition. It’s imperative that we:

• Modernize the regulation of commercial insurance markets in New York State, including allowing qualified insurers to write insurance without filing policy forms and rates; establishing special license privileges; and defining and setting standards for a “large commercial insured”
• Reject proposals subjecting publicly traded companies to the provisions of New York’s broad Martin Act
• Oppose new state-imposed mandates until federal financial services reforms are fully implemented and assessed

Fiscal Reform

New York needs to build on its 2011 fiscal reform progress to:

• Adopt a spending cap on all state expenditures, based on economic performance and growth
• Adopt a new Tier (VI) of the current pension system model which reinstates the employee contribution of 3 percent, lengthens the number of years of service required to reach maximum benefit levels, and makes other changes to limit the cost of the benefits to be provided

Health and Health Insurance

The ever-rising cost of health care remains the number one concern among all Business Council members. New Yorkers pay among the highest costs for health insurance in the country. We will:

• Focus on state “health exchange” legislation, as mandated by federal health care reform, to assure that it does not exacerbate existing market problems or impose significant cost shifts
• Push for the definition of “essential benefits” for plans to be offered through health exchanges; under recent federal rules, defining coverage mandates for these plans is being shifted to the states
• Reject new coverage mandates for group health plans
• Push for the appointment of members to and the convening of the New York Health Care Quality & Cost Containment Commission. This commission was authorized in 2007 and is an ideal means through which to conduct the reviews of existing insurance coverage mandates
• Avoid additional cost shifting to private sector plans in any additional Medicaid reforms

Labor

New York’s labor law includes a number of antiquated, inefficient provisions that impose additional compliance costs or operational restrictions on employers without providing any significant public benefits. The Business Council will work to:

• Adopt legislation allowing a broad range of voluntary payroll deductions for expenses such as cafeteria and store purchases, parking, and other items for the “convenience and benefit” of employees
• Repeal the requirement for annual pay notices to, and annual certifications from, all private sector employees under the Wage Theft Prevention Act, whose first compliance date is February 1, 2012
• Avoid any mandated wage rates for private employers, especially in the area of prevailing wages. Reverse the trend of expanding the definition of “public work” for the purpose of prevailing wage mandates, whether through legislation or administrative/enforcement actions

Mandate Relief

The Business Council is a member of the “Let NY Work” coalition, and supports its local government mandate relief package, which aims to:

• Institute additional state pension reforms
• Mandate consideration of “ability to pay” and make other reforms in compulsory arbitration on municipal labor contracts
• Reduce the costs of public construction by repealing the Wicks Law, reforming the Scaffold Law, and adopting the Public Construction Savings Act
• Modify the Triborough Amendment to freeze step increases when public workers’ contracts expire
• Establish minimum health insurance contribution levels for employees and retirees

Taxation

New York’s state and local business tax burden consistently ranks among the nation’s worst in tax climate rankings. To address these issues, we need to:

• Restructure the corporate franchise and bank tax to simplify compliance, and support new investments and jobs in New York State
• Modernize real property tax administration to assure more fair and equal tax treatment of commercial and industrial properties
• Adopt a new, refundable research and development tax credit for capital and qualified non-capital research expenses
• Extend the state’s “qualified emerging technology company” tax credit for capital, operational and training investments that expired at the end of 2011

Telecommunications

This is the new economic infrastructure of the 21st century, and the state needs to maintain an environment conducive to additional private sector investment. The state needs to:

• Avoid any new or additional state or local tax or fee on telecommunications services
• Adopt legislation to prohibit state regulation of Voice over Internet Protocol (VoIP) technology
• Review and repeal unnecessary, costly and burdensome state regulations on telecomm service providers

Tort Reform

New York’s legal environment consistently ranks as one of the worst in the nation. The state needs meaningful legal reform that respects the rights of all parties and helps reduce the state’s hidden “lawsuit tax.” We should:

• Adopt a comparative negligence standard to be used for actions brought under Labor Law Section 240/241, which currently imposes strict liability on employers and contractors for injuries related to falls, regardless of whether the worker refused to use safety equipment or was impaired by drugs or alcohol
• Adopt a cap on the size of appeal bonds, to allow employers a fair chance to appeal significant potential bankrupting judgments

Transportation

The enormous task of rebuilding New York’s aging infrastructure is complicated by a sluggish economy, burdensome state laws and regulations, and already unsustainable state spending levels and rising taxes. Alternatives are needed. We need to:

• Pursue public-private partnerships to promote and expedite investments in and development of crucial public infrastructure projects
• Enact measures to reduce the costs of construction and spur building and development such as supporting alternative project delivery methods like design build, increasing the Wicks Law threshold across the state, enacting the Public Construction Savings Act (S.4121/A.7855), and making common sense changes to the antiquated Scaffold Law

Travel and Tourism

Tourism is vital to New York’s economy, and improvements in the state’s marketing efforts would result in significant benefits to the state. The Business Council will work to encourage sector-specific strategies to:

• Assure that state advertising and marketing investments are focused on developing long term strategies and goals, and that the industry is engaged in their development
• Support tourist visa policy changes so that New York State can adequately compete for international tourists and take full advantage of its position as a major international gateway to the United States

Unemployment Insurance

The insolvency of New York’s unemployment insurance trust fund continues to impose significant additional costs on New York’s employers. The state needs to adopt a more sustainable UI tax system and avoid shifting significant additional tax burdens to stable employers. New York needs to:

• Develop a plan to make repayment of some $3.2 billion in borrowing from the federal UI system more affordable, including evaluation of bonding
• Avoid any benefit increases until trust fund solvency is addressed and achieved
• Explore new approaches such as a wage insurance component, giving employees the option to obtain additional coverage above baseline UI benefits

Workers’ Compensation

The state’s workers’ comp system is less competitive now than before the 2007 reform legislation, due to a near doubling of maximum weekly benefits and slow and ineffective implementation of reforms intended to improve the program and reduce costs. New York needs to:

• Modify its scheduled loss of use awards to reflect current medical knowledge and practices
• Repeal the aggregate trust fund mandate for permanent partial disability (PPD) claims against commercial carriers
• Conduct a thorough review of Board processes (including, but not limited to, those adopted as part of the 2007 reforms) to identify whether they have created additional frictional costs, or in fact have streamlined processes to allow for better efficiencies within the system
• Provide a clear path to classification of PPDs, assure reasonable methods to classify PPD claimants, and ensure administrative processes for classification brings New York State closer to the national average of maximum medical improvement (about 19 months) from current levels of approximately 48 months

Workforce Development

New York State’s economic competitiveness is inextricably linked to the success of our education and workforce preparation system. However, the lack of a cohesive vision for these resources across state agencies has resulted in ongoing investments that are not aligned with state or regional goals, or the particular needs of employers. New York needs to:

• Better align existing state and federal workforce training resources with regional economic development demand and need
• Design metrics which measure the effectiveness of existing state workforce training investments in meeting regional workforce needs
• Streamline organization and oversight for the myriad of state and federal investments to provide a “one-stop” shop for end users (businesses and individuals)