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.