What's New

Zack Hutchins
Director of Communications

September 27, 2007

Remarks from 2007 Corning Award Winner
Alair Townsend

Thank you very much, Linda. Having grown up in Elmira and knowing the role that Corning plays as an employer and as a community-spirited company, this award has special meaning for me. I am very grateful to Corning and to The Business Council for presenting it to me.

As you have heard, I have worked in both government and in business. That experience has given me an interesting perspective. I have found that businesspeople and elected officials often see the world so differently that we talk past each other rather than with each other. The result, frequently, is government policies that make it more difficult and more costly for business to create jobs. And that hurts everybody.

Government—federal, state and local—is a large employer in our state, accounting for 17 percent of all non farm jobs. But the private and voluntary sectors account for the overwhelming majority of jobs—83 percent. So policies to keep these sectors healthy seem to me to be job one for state government. Why isn't this the case? Why are we talking past each other?

One reason, I believe, is that we have never walked in each others' shoes. Virtually none of us has held elective office, and many legislators have no business background.

Another reason is the unequal power in Albany of business and labor, especially public employee unions. There are caps on what individuals and businesses can give to candidates for state office. There are no caps on union giving. When there are proposals to raise business or income taxes, or municipal workers press for costly pension sweeteners, who has the money to oppose them? Who will push for tort reform, tax cuts and Medicaid overhaul?

Business groups, including this one, raise their voices but have found it difficult to raise money to join the fight.

You can see some of the worst results of the role of money by looking at pensions for state and local employees. State laws govern pensions for both state and local employees. The state does not pay for local pensions; local taxpayers do. So there is a terrible disconnect between the ability to impose costs and the requirement to pay for them. Public employee unions are huge contributors in Albany, and they have gotten favorable action on many of their requests.

Compared to most of our employees, public employees can retire after far fewer years on the job, having made smaller personal contributions to their pensions, and they enjoy larger benefits, cost-of-living adjustments and the presumption that any of a host of ailments is job-related.

These kinds of benefits have created an enormous unfunded public pension liability—as high as $49 billion for New York City alone. They help to account for high local taxes, especially property taxes. Despite this burden, every year the legislature passes new measures to sweeten pensions.

Another example of the failure to consider consequences relates to health care, a subject we're all grappling with as the costs of coverage escalate wildly. There are about 1.4 million working New Yorkers who don't have health insurance. Some employers don't offer coverage and some employees don't accept coverage because it's too costly. It seems to me the policy prescription is obvious. If we want more working people to have insurance, we should make it as affordable as possible. Bare-bones are better than nothing.

But Albany players won't permit that. Lawmakers too often succumb to pressure to add mandatory benefits that must be included in any insurance plan. These mandates add $500 to individual policies and more than $1,000 to family policies every year, according to one study. As costs rise, coverage of people through their employers falls. The desire to have everything means more workers have nothing. And when employers and employees drop coverage, public insurance programs are expanded to fill the gap. In short, we create problems then spend public money trying to solve them. It makes no sense.

Bigger companies with multi-state operations can—and do—self-insure. They adjust employee premiums, deductibles, co-pays and covered services to constrain costs. They decide, not the state, whether to offer such things as infertility treatments and generous mental health coverage.

It's the smaller companies and their employees that suffer, along with all the rest of us who finance the public healthcare programs to cover the uninsured.

These are just a few examples of actions that raise costs and taxes and impede growth in our state. Combined with all the other competitive factors we face, they have had a deleterious effect on our economy. Nationally, jobs grew by 12.2 percent between 1995 and 2005. Jobs in New York State grew by about half that—6.8 percent. The figure for upstate was a meager 2.3 percent.

What can we do? Joining and supporting The Business Council is a good first step. The work the Public Policy Institute does in explaining policy choices and consequences is first-rate. Our advocacy efforts make a difference.

But each of us can do more. We need to reach out more effectively to our local representatives on a routine basis, not just when we're fighting against some piece of legislation. We need to have them visit our businesses and understand our issues. We need to give them frequent feedback—thanks when thanks are warranted and criticism when that is warranted. We also need to write checks to support those who support us, whether they are incumbents or insurgents.

We need to press for:

  1. Campaign finance reform to make unions subject to the same rules as businesses.

  2. Enactment of a more affordable pension tier for all new government workers, and elimination of the power of the state to liberalize local pensions.

  3. Tort reform, which among other things will reduce health care costs.

  4. Medicaid reform, so that New York no longer spends more than twice the per-capita average for the country.

  5. Giving a nonpartisan commission, rather than the legislature, the power to draw the boundaries of legislative districts.

  6. A more transparent and democratic budget process.
  7. Reform of state labor law, so that the Taylor law and Triborough Act no longer make it impossible for local officials to negotiate contracts for municipal workers that are fairer to taxpayers.

  8. Reform of the Wicks law, so that public construction projects can be managed more cost-effectively.

One of the things I have learned over the years is that businesses and businesspeople are expected to carry a lot of water. In addition to providing jobs, we are expected—and do—contribute generously to universities, hospitals, cultural institutions and social service programs of every kind. We carry this water because it's the right thing to do. I have also learned that nobody else will carry our water and represent our interests. So we have to be prepared to do it ourselves……

Ed Koch was fond of saying that the best social program is a job. He said that with a job, most people can solve their problems on their own. He was right then and he is right now. No government agency can provide what we do. What we ask is a reasonable climate in which to do it.

New York State has so many advantages—natural resources, a skilled labor force, world-class universities, a muscular financial services sector, a vibrant tourism industry and innovative companies—just to name a few. We can and must unlock the full potential of these many advantages for creating jobs and opportunities for our people.

I thank The Business Council for all it does to help employers and their employees. And I thank them and you for this wonderful award.