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As the state Legislature nears its scheduled end of activities
later this month, The Business Council is focusing on several priority
issues, including debt reform, workers' comp reform, renewal of
state's Power for Jobs program, a bill to impose a costly health
insurance mandate on employers, and a proposal to undermine the
effectiveness of the state's main job-creating entities, IDAs.
Debt reform: The Business Council is supporting
an approach to debt-reform that has been outlined by state Comptroller
Alan Hevesi and introduced in the Legislature as a Constitutional
amendment and enabling legislation. The bill that proposes a consitutional
amendment (S.8176/Libous-A.11516-Morelle) would:
- Define state-funded debt to include all debt supported by state
resources, which includes most debt held by public authorities.
- Limit outstanding state-funded debt to 5 percent of personal
income -- it is now 7 percent -- and limit new borrowing to 95
percent of the previous year until debt as a percentage of personal
income is below 5 percent.
- Create an independent debt management board which would conduct
an "annual debt affordability study." The study would
examine the state's debt level and analyze the state's ability
to issue new debt.
- Require voter approval for debt exceeding $1 billion and authorize
ballot initiatives to consolidate state-funded debt.
Workers' comp reform: New York State's workers
comp costs are the nation's second highest, 86 percent above average
on a costs-per-case basis, according to the National Council on
Compensation Insurance (NCCI). New York's costs remain high even
though maximum benefits available to injured workers are modest
at best.
New York's costs remain out of control because of the high costs
of claims in cases for which benefits are unlimited by statute.
These claims account for only 11.7 percent of claims in New York,
yet they account for 73 percent of the aggregate cost of workers’
comp. New York is one of only nine states that does not limit the
duration of awards in these cases.
The Council is supporting reform proposals that would impose limits
on the duration of these benefits while still providing a generous
benefit, and that would require the use of objective medical guidelines
to evaluate injuries in comp cases. The Governor has advanced one
such reform proposal in a program bill (S.6461/A.9561), and Assemblyman
Morelle and state Senator James Alesi (R-Monroe County) are expected
to soon introduce a reform bill that achieves the same result.
The Alesi/Morelle bill is also expected to reform the state's notorious
Scaffold Law, which holds property-owners and contractors absolutely
liable for worksite injuries regardless of their safety records
or worker negligence. The bill is expected to allow evidence of
worker negligence and employer safety to be considered in determining
liability.
Both bills would also provide for an increase in maximum benefits
offered to injured workers.
Power for Jobs: The Business Council is urging
lawmakers to approval a bill (S.6459C(legislative budget)/A.9559C(legislative
budget) to extend through 2007 the state's successful Power for
Jobs program, which offers reduced-rate power to employers that
pledge to use it to create or retain jobs.
The Legislature voted to extend the program as part of the state
budget, but Governor Pataki vetoed that provision, and has asserted
that the legislative override is invalid.
Regardless of how that disputed may be resolved, the Council told
Senate Majority Leader Joseph Bruno in a June 12 letter, the Legislature
should remove any uncertainty surrounding the future of the program
by approving the bill that would extend the program in a manner
that does not refer to future legislative appropriations, which
was the focus of the Governor's constitutional objections.
New health insurance mandates: The Council continues
to strongly oppose any and all proposals to require any employers
to offer health insurance benefits or pay a new punitive tax.
The most draconian of these so-called "WalMart" bills
(S.7090-Spano/A.10587-Gottfried) would impose these penalties on
employers with 100 or more employers, and would require a minimum
payment of $3 per employee on benefits.
The Council argues that it makes no sense to address a societal
problem stemming from high health-insurance costs with a policy
that will drive those costs dramatically higher for countless employers.
The Council also cites a study by a University of Kentucky economist
that has shown that the worst of the bills would eliminate at least
69,000 jobs in New York State, and possibly as many as 100,000 jobs.
Better health-care policy alternatives include giving individuals
and businesses that buy health insurance in New York State and exploring
a health-insurance policy innovation in Massachusetts that includes
some promising components.
IDAs: The Council is opposing a bill (S.7391A/Maziarz-A.10787/Sweeney)
that would undermine many of the state’s job-creation incentives
by penalizing companies that fail to meet in-state employment criteria
that have no link to the original economic-development agreements.
The bill would impose significant sanctions on employers with 50
or more employees that take advantage of many state tax credits
and financial assistance programs. Sanctions would be triggered
if the employer’s in-state job count fell below a baseline
level and then the business moved even one job out of the state—even
if the employer met its obligations to the state under the original
incentive program.
The bill would impose these job-count criteria even on programs
for which eligibility is based on other criteria, such as capital
investment.
New York State grew jobs at a rate of less than 4 percent between
1990 and 2005, even as the nation's job-growth rate was 20 percent.
That weak record is largely a reflection of high taxes and high
costs of job creation.
The Council has argued that, with such high costs and the resultant
record of weak economic growth, the last thing New York State should
do is enact a policy the main effect of which would be driving high
job-creation costs higher.
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