Zack Hutchins
Director of Communications

For Release — September 23, 1999

Business Council's top priorities focus on stronger schools, reducing New York's tax burden, liability reform, and workers' comp reform

ALBANY—New York's top business leaders have selected six priorities for 2000: education reform; workers' compensation reform; state fiscal restraint; a reduction in the gross receipts tax (GRT) on consumers; property tax reduction; and liability reform.

The priorities were identified by the board of directors of The Business Council of New York State at The Council's Annual Meeting in Bolton Landing. The three-day meeting ends Friday.

These priorities include all issues identified as priorities for the upstate economy by a coalition of business interests called Advance Upstate New York, with which The Council has been working closely, Business Council President Daniel B. Walsh said.

"New York, and upstate in particular, can and should be more prosperous," Walsh said. "The last few years, New York's lawmakers have improved our business climate. By addressing these priorities, they can do even more to bolster the economy—not just upstate but statewide."

Education reform: The coming year will see the first step in implementing the state's higher standards for high-school graduation. "New York is saying: We can't give you a high-school diploma until we've given you a genuine high-school education," said Walsh. "That's the right message, and the business community will support the Regents' requirements against every call to postpone or weaken them."

Fiscal restraint: saving the surplus for tax cuts: The Business Council will support a new state budget that keeps spending increases at or below the level of inflation, to ensure that the economy will benefit from new tax cuts and from the full implementation of tax cuts already on the books.

Workers' compensation reform: Despite landmark workers' comp reforms in 1996 that helped drive rates down, rates are poised to increase again. Moreover, New York's workers' compensation costs remain uncompetitive, mainly because other states have been at least as aggressive as New York in trying to reduce employers' costs, Walsh said. He cited a recent study showing that New York manufacturers workers' compensation costs in 1999 remained 20.9 percent above the national average, and were losing ground to the national average.

The Council supports Governor Pataki's proposals last year to cap permanent partial disability payments, and to use objective medical guidelines to determine the degree of disability in these cases. Permanent partial disability payments now account for over half of New York's workers' compensation costs. New York is one of few states that pays these benefits indefinitely, even years after the injured worker has returned to work.

Reduction in the gross receipts tax (GRT): The GRT adds some $1.2 billion to energy and telecommunications bills for businesses and residences statewide. In recent years, lawmakers have reduced the GRT rate from 3.5 percent to 2.5 percent, a reduction of more than one-quarter, but the tax remains a key reason energy and telecommunications costs are so high. Moreover, increasing competition for both utilities and the telecommunications industry put New York at an increased competitive disadvantage against companies in other state that pay a lower GRT or none at all.

Property tax reduction: Local taxes, especially property taxes, are New York's biggest competitive disadvantage. The Council's research affiliate, The Public Policy Institute (PPI), has shown that New Yorkers pay $9.4 billion more in property taxes than they would pay if New York merely matched the national average.

The Council's property-tax agenda will focus on reducing taxes through mandate relief, ensuring fairness in property-tax assessments (in part by sharply limiting the assessment difference between "homestead" and business tax rates), and returning the tobacco-settlement dollars to taxpayers.

Liability reform: The Public Policy Institute published a landmark 1998 report on New York's lawsuit industry, 'An Accident and a Dream,' demonstrating that the tort system now costs $800 a year for every New Yorker. The Council favors reforms that will lay out basic guidelines for juries in liability cases.

The upstate economy: Walsh said the gross receipts tax, workers' costs, and mandates are often cited by upstate business leaders asked why the upstate economy lags both the downstate economy and the nation's economy.

He noted that The Business Council's 2000 legislative priorities are designed to bolster the upstate economy while simultaneously benefitting downstate.

"New York's progress improving its business climate has been necessary but not sufficient," Walsh said. "It is important that our lawmakers understand this and resist the temptation to declare victory and stop fighting. Because competing states won't do that.

"More progress toward a more prosperous New York is within our grasp. But we could just as easily backslide. If we abandon our pursuit of a better business climate, all New York and all New Yorkers will suffer."

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