We’ve made no secret of our support of the two percent Property Tax Cap, in our opinion, the tax cap – coupled with the self-imposed cap on state spending, have been the signature achievements of the Cuomo administration and have helped correct years of outrageous spending increases and rising property taxes. Despite these achievements, the voices calling for a weakening of the tax cap continue to grow louder.
In today’s Newsday, school officials are quoted as saying the two percent cap is putting the squeeze on their budgets, and they argue the two percent cap is really more like .2 percent, since inflation continues to be so low.
The change they are asking for is subtle, but substantive. They want lawmakers to make the tax cap a hard two percent, instead of currently capping increases at the lower of two percent, or the consumer price index (CPI). They say the lack of growth in the CPI is putting a strain on school budgets and forcing them to tighten their belts in ways the law never intended. It is our belief that the real “strain” does not come from the fact that the CPI has kept the tax increases significantly below two percent, it’s that municipalities continue to be held hostage by antiquated laws that make it far too easy for the teacher’s unions to achieve sizeable yearly pay increases well above the rate of inflation.
At a time when regular worker salaries remain stagnant, and overall economic growth is weak, it makes all the sense in the world that unions should play by the same rules. We hope lawmakers continue to recognize that the tax cap is a tremendous achievement and resist calls to weaken it.
Crain’s New York recently published a terrific article laying out the reasons how and why Health Republic turned into such a catastrophic failure.
From the article:
“On Sept. 25, 2015, Health Republic was ordered to shut down by the same state and federal agencies that had given the insurer their regulatory blessings just two years earlier. In 20 months, from January 2014 through August 2015—when it became clear the insurer couldn’t survive—Health Republic had accumulated tens of millions of dollars in losses. The company was ordered to close its doors effective Nov. 30, leaving 209,000 enrollees to scramble for new coverage.
A three-month investigation by Crain’s New York Business shows that, from its conception in 2012, Health Republic was on unsteady ground. Crain’s found that management deliberately set low premium rates as a marketing ploy to attract customers. Regulators approved those rates but then wouldn’t let the company raise them after it became clear that the prices jeopardized the company’s solvency.
To put it more bluntly; Health Republic’s failure was the result of negligent leadership and incompetent government oversight.
Again, from the article:
“By several accounts, DFS did not monitor Health Republic closely, aside from handling initial consumer complaints. It wasn’t until early 2015 that DFS began demanding monthly financial reports from Health Republic instead of only quarterly and year-end financial statements. By then, the company realized it had lost $77.5 million in 2014, an amount it had still hoped would be covered by the federal backstop. Meanwhile, Health Republic’s executives tried to reduce losses. They stopped selling policies in several upstate counties where claims were particularly high. The company also tried to interact directly with providers to manage patient care that generated expensive claims but was blocked by the restrictive contracts that had been signed with MagnaCare.”
Even now, months after the failure, the fallout continues. The real question is: What will New York State lawmakers and policy officials due to ensure that the regulators accomplish their primary mission of maintaining carrier solvency so this doesn’t happen again?
A new report by the American Legislative Exchange Council (ALEC) finds New York ranks dead last in economic outlook among the 50 states.
From the report: “Rich States, Poor States examines the latest movements in state economic growth. The data ranks the 2016 economic outlook of states using fifteen equally weighted policy variables, including various tax rates, regulatory burdens and labor policies. The ninth edition examines trends over the last few decades that have helped or hurt states’ economies.
Used by state lawmakers across America since 2008, Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, is authored by economist Dr. Arthur B. Laffer; Stephen Moore, distinguished visiting fellow at the Heritage Foundation; and Jonathan Williams, vice president of the ALEC Center for State Fiscal Reform.”
This is the third year in a row that New York came in last place.
On the same day dozens of small business owners from across New York rallied at the state Capitol, Comptroller Thomas P. DiNapoli released a report highlighting the nearly $1 trillion in annual revenues small businesses generate for the state.
According to the report: “New York’s small businesses generated $954 billion in receipts in 2012, the latest figures available, accounting for approximately 43 percent of all business receipts in New York, according to DiNapoli’s report.
Among the more than 455,000 businesses in New York, more than 451,000 are small businesses. Almost two-thirds of small businesses have fewer than five employees. More than 80 percent have fewer than ten employees.
Firms with 20 to 99 employees comprised approximately one-third of the total small business employment with over 1.2 million employees. The larger firms (those with 100 to 499 employees) had the highest average payroll per employee, nearly $56,000 per year.”
This report should serve as a stark reminder to lawmakers of the myriad of benefits small businesses bring to their communities as they contemplate a 67 percent increase in the state’s minimum wage.
That wage increase would cost anywhere from 200k to 600k and further erode the job prospects and opportunities for growth among our state’s poorest citizens.
Please visit www.minimumwagerealitycheck.org to learn more about this misguided proposal and to join our growing coalition against the $15 an hour minimum wage.
The U.S. Chamber of Commerce, of which The Business Council of New York State is a member, filed a lawsuit in U.S District Court for the Western District of Washington earlier this week to “challenge a Seattle ordinance that authorizes union organizing of for-hire drivers working as independent contractors, highlighting that the ordinance will burden innovation, increase prices, and reduce quality and services for consumers.”
According to Amanda Eversole, president of the Chamber’s Center for Advanced Technology & Innovation, “this ordinance threatens the ability not just of Seattle, but of every community across the country, to grow with and benefit from our evolving economy. Technology companies are leading the charge when it comes to empowering people with the flexibility and choice that comes with being your own boss, and that is something to be championed, not stifled.”
Now, this of interest to us here in New York for two reasons: first, Uber and Lyft are currently operating as for-hire vehicle service companies in New York City and second, they are actively trying to expand to the rest of New York State. Whatever happens with this suit would set a precedent that could then be applied here. The Business Council has been vocal in its support of for-hire vehicle companies like Uber and Lyft. We believe they would be an economic development tool for many upstate communities that lack reasonable and robust public transportation options.
This litigation, and the issues it brings up vis a vis the definition of “independent contractors”, was the subject of one our recent Labor/HR webinars. You can learn more about this series here, and sign up for our March 17th webinar focused on “Paid Family Leave”.
The New York State Senate today passed a resolution commemorating the 100th Anniversary of Wegmans Food Markets, Inc. Wegmans, based in Rochester, NY, is a longtime member of The Business Council of New York State, Inc.
The resolution, sponsored by Senator Richard Funke (R, Rochester) said, in part, “Since 1998, Wegmans Food Markets, Inc. has consistently been ranked on Fortune magazine’s 100 Best Companies to Work For list, and was rated No. 9 on Forbes magazine’s 2015 list of America’s Best Employers. In addition, it was named the best for corporate reputation among the 100 most visible companies nationwide according to the 2014 Harris Poll Reputation Quotient study. Wegmans Food Markets, Inc. prides itself on raising the bar on the shopping experience by providing the best quality, a spectacular abundance of choice, restaurant-quality prepared foods, beautiful stores and displays, and an exceptional level of customer service.”
This is a tremendous achievement for the company and the entire Wegman family. We would like to offer a special note of congratulations to Paul Speranza, the Vice Chairman, General Counsel and Secretary of Wegmans Food Markets, Inc., and the Vice Chair and Treasurer of The Business Council of New York State.
A new film about the Commercial Division of the New York State Supreme Court explains why the court has become the premier forum for business litigation.
In less than 15 minutes, the film describes the origins of the court and the reasons why it has transformed New York from a dreaded venue for the resolution of business disputes, to the preferred setting.
The professionally filmed video, produced by the Historical Society of New York State and the Commercial Division Advisory Council, comes on the heels of a special event last spring when the Business Council hosted a breakfast spotlighting the business benefits of the Commercial Division (see July/August issue of Connect). At the breakfast, Heather Briccetti recalled the “bad old days” when it would have been inconceivable that the New York courts could be viewed as an attraction for businesses seeking to relocate to New York.
Those days, as the new video makes clear, are gone.
Featured speakers include:
Gregory Palm (Goldman Sachs), Joseph Wayland (ACE Limited), Michael Fricklas (Viacom, Inc.), Michele Mayes (New York Public Library), Daniel Jonas (ConMed Corporation), Stephen Cutler (JPMorgan Chase & Co.), Elizabeth Moore (Consolidated Edison, Inc.), Richard Walker (Deutsche Bank AG), Douglas Lankler (Pfizer Inc.) and David Ellen (Cablevision Systems Corp.).
The video is available on several sites, including the court system’s YouTube channel. A full transcript is available on the court system’s website.
The Siena Research Institute’s 9th Annual Upstate New York Business Leader Survey, sponsored by The Business Council of New York State, Inc., shows business leader confidence has dropped across upstate.
Following a record-breaking confidence level last year, business leaders are again worried that the tax and regulatory policies of New York State will have a negative effect on their businesses’ ability to grow. Combine that with the push for a $15 minimum wage and paid family leave, both which are nearly universally panned by the survey’s respondents, and there are some real headwinds for the upstate economy.
As sponsors of the survey, we were able to get an early look at the findings and we were pleased to see how well the results lined up with our own legislative agenda. For us, it was further proof that our members and our own policy priorities are well in-line with the broader business community.
To view the full survey results, click here.
And here are some links of coverage the poll’s release received around the state.
Albany Times Union: CEO poll: $15 minimum wage plan is wild card in New York
Buffalo News: Siena poll finds WNY business leaders less optimistic about economy
Rochester Democrat and Chronicle: CEO confidence dips in Rochester, upstate
Rochester Business Journal: Optimism fades among area’s business leaders
As part of the rollout The Business Council and Siena are traveling the state to speak directly to each region’s business leaders. Our next presentation is this Wednesday, February 3 at the offices of the Buffalo Niagara Partnership, register here.
Congratulations to our member companies who were recognized this week as among the best employer’s in the country for workers with disabilities.
The list is compiled by Careers & the disABLED magazine, the only national career recruitment publication for people with disabilities.
We are tremendously proud to have these companies as our members and congratulate them on this honor.
*Denotes that this company is a member of The Business Council of New York State, Inc.
TOP 50 EMPLOYERS
2015 Readers’ Choice
- State Farm Insurance*
- Merck & Co., Inc.*
- Lockheed Martin
- American Express*
- Boston Scientific
- General Dynamics
- Kellogg Company
- Comcast NBCUniversal
- Ford Motor Company
- CVS Caremark*
- General Motors*
- Liberty Mutual*
- Johnson & Johnson*
- Wells Fargo
- Northwest Mutual
- Ball Aerospace & Technologies
- CA Technologies
- Grant Thornton
- T. Rowe Price
- Reynolds America
- Life Technologies
- Owens & Minor
- Capital One
The Buffalo News has a terrific piece in today’s paper examining the ways restaurateurs are preparing for the significant worker wage increase coming into effect next year. Tipped worker wages are set to rise by 50 percent, from $5.00 an hour all the way to $7, come January 1st. That’s squeezing already tight profit margins and forcing management to cut hours, raise prices and consider more upcharges.
From The Buffalo News: “Betty’s is a long-established neighborhood favorite on Virginia Street in Buffalo. In anticipation of the new wage law, it has increased prices by between 50 cents and $1.50 per item, and will probably do it again in a few months. The strategy is to soften the blow with two smaller, separate increases, said Carole Simon, a Betty’s co-owner.
The price increase would have been steeper, but the restaurant tried to avoid that by cutting costs elsewhere. It has altered its hours to cut down on payroll costs, opening a half-hour later and closing a half-hour earlier. It has removed two popular but time-consuming dishes from the menu – the jibarito plantain sandwich and the spinach potato pancakes. And it has pared dishes down to their basic elements, listing them with upcharges for extras. That way, customers have the option of ordering the basic eggs, home fries and toast for $5.50, or they can upgrade to vegan sausage and gluten-free bread if they’re willing to pay more.”
Remember this when advocates for a $15 an hour minimum wage for all workers say The Business Council and other business groups are wrong when we predict wage increases will negatively impact the economy and cost jobs.
Learn more about our fight against a $15 an hour minimum wage by visiting www.minimumwagerealitycheck.com.