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March 29, 2006

Full Text of Letter from Business Council President Daniel B. Walsh
To Assembly Speaker Sheldon E. Silver on proposed 2006-07 budget

 

Honorable Sheldon E. Silver
Speaker of the Assembly
State Capitol
Albany, New York 12248

Dear Speaker Silver:

Please don’t tell me this is the best Albany can do.

At your insistence, and that of the Democratic majority of the Assembly, the budget the Legislature is preparing to enact will do little, if anything, to create jobs and build prosperity in our state.

It contains no broad-based tax relief for business. Indeed, you have rejected every single proviso of the business tax reforms proposed by Governor Pataki and by the Senate Majority.

The budget is dominated instead by a huge spending increase, decorated with a few one-shot tax gimmicks designed to provide a false sense of real tax relief to our taxpayers, the most over-burdened in the nation. Its legacy will be huge economic and fiscal problems for the next Governor – and the threat of even higher taxes for years to come.

In Albany, who cares? But in the New York of the real world, we cannot afford a government that operates like this.

In the New York of the real world, we have yet to make back the jobs we lost in the 2001 recession. Meanwhile the rest of the nation soars along, with more than two million more jobs than it had when the downturn began.

In the New York of the real world, our excess tax burden is stifling employers’ ability to create jobs. The nonpartisan Tax Foundation reported just last month that the overall business tax climate in New York is the worst among the 50 states. This month, our own Business Council survey of employers across the state found that they overwhelmingly agree that their tax burden here hampers their capacity to compete and grow (but that if given tax relief, they would invest it in the future of their businesses here).

In the New York of the real world, study after study shows that employers in New York labor under heavier cost burdens than in almost all competing states, in almost every area – from taxes to workers’ comp to wages and energy costs. Your staff doesn’t have to get up from their desks and go out into the real world to see this; all they have to do is log on to:

www.ppinys.org/reports/JustTheFacts.html.

In the New York of the real world, we are facing competition for jobs and growth that gets more intensive every day. From your district, you can see the competition from retail stores over in New Jersey; hence the sales-tax exemption on clothing. Why can’t you see the technology companies, the manufacturers, the innovators all over our state who are facing even tougher competition, and who need action by this state to help them put their investments and their job growth in New York?

In the New York of the real world, conditions Upstate have reached the point where your own party’s leading candidate for Governor compares the region to Appalachia. Upstate has more than a third of our state’s population. Don’t they have any representation in the Assembly Majority conference?

In the New York of the real world, we lead the nation in only one important index – net out-migration to other states. We average a loss of 200,000 every year. Upstate alone had net out-migration of 400,000 people from 1990 to 2002, according to the Census Bureau.

In the New York of the real world, there is no end in sight to this hemorrhaging. In the last 15 years, Upstate has grown jobs only about one-fifth as fast as the nation (and only about one-seventh as fast as another cold, “Rustbelt” state – Wisconsin). The 2000 Census found that Upstate’s population had grown only one-ninth as fast as Appalachia’s. Upstate’s population in the critical 20-34 age group fell by 377,000, or almost one-quarter.

In the New York of the real world, total employment in Upstate New York rose by 0.2 percent in 2005. Eleven of the 12 other states covered by the Appalachian Regional Commission had stronger job growth; employment in West Virginia, for example, rose by 1.4 percent.

Remedies for these problems may not be easy to identify, but you don’t have to think of them all on your own. The business community offered good ideas. So did the Governor. So did the Senate.

Each set of proposals would have made some modest use of the state’s current surplus to try to improve New York’s competitive posture. Each would have helped our people capture some share of the nation’s booming job growth.

The Assembly’s ideas are ... what?

Sincerely,

Daniel B. Walsh
President/CEO The Business Council of New York State, Inc.