Zack Hutchins
Director of Communications

For Release — Tuesday, December 19, 2006

New Business Council survey:

ALBANY—New York State employers responding to a Business Council survey have overwhelmingly identified employee health care as their top cost-of-doing-business concern. The new survey also showed strong employer concern about costs of workers' compensation, energy, and business taxes.

Kenneth Adams, President and CEO of the Council, said the findings will determine the priorities the Council will work on with the new Governor and Legislature in 2007.

The survey, which the Council conducted in November and December, asked individuals at member employers to rank various public-policy issues within each of three areas: cost-of-doing business issues; economic development issues; and governmental reform issues.

The Council received some 1,080 responses, which is nearly twice the number of respondents from any previous Council survey of its members. The returns were broadly representative of the Council's membership in terms of size, type of business and location, and cross-tabulations found that the issue rankings were broadly consistent regardless of the size or type of company represented in responses.

"We have a mandate because of a high level of response," Adams said. "And because we asked our members to rate things and make tough choices on their recommendations for what we do, I think we have a very clear direction. So not only do we have a mandate, but we have clarity, too."

Cost-of-doing-business issues

Members reported that cost-of-doing business issues were far and away the most important advocacy area for them. Almost two-thirds of members said this was the most important area on which The Business Council should concentrate, and 80 percent said it was one of the top two. Economic development issues were next, followed by governmental reform issues.

Health care: Thirty percent of respondents said health insurance for themselves or their employees was their top cost-of-doing-business concern, and more than 65 percent of respondents ranked health insurance as one of their top four issues.

"Hidden taxes (surcharges) on health insurance and health care are passed on to businesses of this state, thereby increasing their overall tax burden and increasing their cost for health coverage," one respondent wrote in the comments portion of the survey. "Benefit mandates for health insurance also increase insurance premiums, and add to the overall cost of providing business-based health insurance. All of these mandates are implemented without regard to what effect they have on outcomes, quality of care, overall cost health care."

Workers’ compensation: About 16 percent of those who took the survey said workers’ compensation assessments and premiums are the single most important cost-of-doing-business issue. And more than 54 percent rated comp as one of their top four. The Council has been working closely with the new Spitzer administration, and the state AFL-CIO, to produce a compromise reform plan for workers' comp.

"Please continue to fight for reform of the workers' compensation system!" one respondent wrote The Business Council. Many other companies reiterated in open-ended portions of the survey that they are concerned about comp; one company specified that the lack of a limit on permanent partial disability benefits had a significant impact on its bottom line.

Energy costs: Energy costs were rated by 9.5 percent of respondents as their number one cost-of-doing business issue. Over 41 percent of respondents ranked the issue in the top four.

New York's state taxes on business: More than 40 percent of respondents ranked New York State taxes on business as one of their top four cost issues.

"Government must find ways to make companies stay in NY whether by reducing taxes or other major incentives and there shouldn't have to be restrictions - it should be available for all companies," one respondent wrote.

"Just lower the cost of government in NY and taxes will decrease and businesses will prosper," another respondent said.

Liability insurance and lawsuits: More than 40 percent said the issue was in their top four.

Economic development

The top three issues selected by members as the most important under economic development were:

Economic development programs and incentives: One out of every five members listed economic development programs and incentives as their top economic development priority. Nearly half ranked economic-development programs within their top four priorities in this category.

"Economic development reform needs to include a new model, with more collaboration with regions and effective regional partnerships," one respondent said.

"The Empire Zone Program is a bureaucratic nightmare of paperwork and confusion," another respondent said. "How about developing a simplified economic development tax credit incentive program for all businesses who make capital investments and create jobs?"

Workforce development and training: Some 47 percent of respondents said worker training and enhancement was one of their top four concerns in this area.

"Trade skills are disappearing," one respondent said. Another company said it was having problems "finding good workers with vocational skills."

Innovation, science and technology: More than a quarter ranked innovation, science and technology as one of their top four economic development issues.

Some respondents said red tape and regulation stifled the state’s technological growth. "Price controls on the biotechnology and pharmaceutical sector in New York State have the greatest negative impact on innovation and job growth in NYS," one respondent remarked.

Government reform

Consolidation of local government or local government services: Nearly 28 percent of respondents selected consolidation of local governments or local government services as their top reform priority. Almost half said it was one of their top two concerns.

Governmental debt and public authority reform: More than 43 percent said this was one of their top two reform issues.

"New York State's organization is inefficient and bloated," one respondent said. "There needs to be an effort to streamline administration. Our organization has seen unit price increases at half the rate of inflation for 20 years, and we have prospered through productivity improvements. This needs to be applied to state and local governments. The political choice is not only higher taxes or lower services, but lower governmental costs per unit of service."