Category Archives: Economic Development

Business Council rebuts claims in Times Union Editorial

The below letter to the editor was submitted to the Albany Times Union last week. 

New York’s so-called “scaffold law” may be the most misunderstood, or at least most mischaracterized, section of New York State statute. And based on your September 24 editorial, “An attack on worker safety,” the Times Union editorial board has never read New York State Labor Law Section 240 or Congressman Faso’s proposed legislation. We have attached copies of both for your review. Upon review, the board will see the Faso legislation does not change a word in existing NYS labor safety standards. Furthermore, in no way does the Faso bill, or similar state-level proposals, “erod[e] worker protections.” Likewise, your editorial is simply wrong in asserting that contractors and property owners are only liable under court interpretations of Section 240 “if property safety measures weren’t in place.” Courts developed the strict liability standard for property owners and contractors for such injuries, even if workers ignore safety standards or safety equipment.  

The reforms proposed at both the state and federal level simply apply the exact same liability standard – contributory negligence – to Section 240 claims that apply to all other types of tort claims under long-standing New York State law. In doing so, New York also matches the approach of every other state. There is no doubt the current tilted 240 liability standard adds significantly to the direct cost of public and private construction in New York State, and impacts the state’s economic competitiveness with other states.

Ken Pokalsky
Vice President
The Business Council of New York State
Albany, NY

The story of Richard Katzman

For those who are unaware, or simply don’t remember, Richard Katzman was the CEO of Kaz Inc., once a major Columbia County employer. Way back in 2005 Richard Katzman–in a fit of extreme anti-development NIMBY-ism that’s become all too common– cheered when a plan to create a $300 million cement plant in Greenport was blocked by New York’s secretary of state, Randy Daniels. At the time, The Albany Business Review quoted Mr. Katzman as saying he was “delighted” by the decision. Mr. Katzman went on to say, “”My feeling and the feeling of other business people in the community is that this project was so out of scale with the existing mix of businesses and industries in the area that it would seriously hurt the quality of life and therefore hurt all our businesses.”

Mr. Katzman’s joy became all the more ironic when just three years later he announced his company was shutting down it’s manufacturing in Hudson, eliminating 300 jobs along the way. In announcing the closure, Mr. Katzman’s “delight” went away, instead he said this was a “hard decision” and “we’re not the bad guys here.”  To add insult to injury, press reports at the time noted that Kaz’ manufacturing activity would be taken over by a Spokane, Washington-based business that “does the majority of its manufacturing in Mexico.”

So, why are we bringing this up now? Well, we couldn’t help but notice that incoming Senate Minority Leader Chuck Schumer held a news conference in Hudson touting a new development plan for the still vacant former Kaz Inc. site. That’s right, nearly a decade later, Mr. Kaz’s property that he was at one time “delighted” to protect, has been left to rot since he moved on to greener pastures. Unfortunately, stories like these are all too common in New York State.

Hard to find logic in DFS move

Much has been made recently about Howard Zemsky, the chief executive of Empire State Development, and his recent defense of Start-Up New York’s advertising campaign, which he said was “…paying dividends to New Yorkers in more intangible ways, including reversing…the state’s decades-old reputation as a place unfriendly to businesses.” Millions of dollars in advertising notwithstanding, we are very concerned with communications from other members of the administration, whose recent activities send a very chilling message to employers in New York.

In a recent letter regarding Anthem’s proposed acquisition of Cigna, Superintendent of Financial Services (DFS), Maria T. Vullo, took some unprecedented steps that highlighted the department’s inconsistent philosophies regarding the cost of healthcare in New York. Moreover, the letter sends a very strong and negative message to employers desiring to expand operations in New York, which is especially disconcerting given the significant longstanding economic presence these businesses already have in the state. Such actions should concern any of us trying to do business in New York.

As a representative of New York’s employers, I find it especially troubling that DFS dedicated much of their professed concern discussing the future market share of the commercial self-insured market. These are companies that opt to insure their employees out-of-pocket, rather than purchase insurance. Such insurance arrangements are typically entered into by sophisticated businesses in a very competitive and price sensitive market, and this is a market already regulated by the federal government through ERISA. While tensions between the state and the federal government over ERISA plans are not new, this letter signals a new attempt by a state agency to regulate employers in matters that fall far out of its jurisdiction.

Also deeply concerning is the DFS’ confusing logic on controlling the costs of healthcare for consumers in the state.  DFS simply assumes that a carrier’s increased market share will somehow have a negative impact on the value-based payment model being promoted by the state, leading to higher costs for consumers, despite the fact that there is no evidence to support such an assumption.

This logic is flawed in several ways. The letter says that competition in the health insurance industry is needed so that providers (doctors, hospitals, etc.) can negotiate with various insurers to maximize their income. Perversely, this will naturally lead to an increase in health care premiums, an issue to which the DFS should be particularly sensitive. The fact that increasing the income of healthcare providers is not part of the mission of the Department of Financial Services aside, this statement simply misses the point. While the verdict on the cost-savings of the value-based payment model is not yet in, such a model never envisioned a marketplace where healthcare providers are given endless leverage to negotiate universally higher fees.

Further, the letter fully ignores the reality of healthcare provider mergers and acquisitions in the state. Last year alone there were 940 healthcare service transactions in New York, up from about 480 in 2010. This increase is at an unprecedented pace in New York; one which is likely to only accelerate. Numerous recent studies show that such mergers create upward pressure on healthcare costs. If the Department of Financial Services is concerned with the cost implications of diminished competition, why isn’t this side of the equation being considered?

Employers in New York are saddled with some of the very highest costs of doing business in the nation. Everything from property taxes to workers’ compensation costs to the price of health coverage. In order to change New York’s poor business reputation, we need more than advertisements; we need policies that work to lower these costs for employers. We need consistency in policy across the state’s many regulatory agencies and we need regulators that stay within the jurisdictional limits set by law. It’s time that all of New York’s regulating agencies get on board to building a better economy for all of us.

New York’s Economic Outlook: Dead last

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.

A closer look at Buffalo job numbers

Perhaps you’ve seen the news recently about a rather startling revision of employment  numbers in the Buffalo/Niagara region. In case you missed it, here is the gist: preliminary numbers said the region added 8,900 jobs in calendar year 2015. That figure represented a 1.6 percent increase that would have been the strongest job growth the area had seen since 1999. However, when the revised figures came out, what was once 6,100 new jobs, turned into 2,900 new jobs. And that 1.6 percent job growth rate we just mentioned, it plummeted to a disappointing 0.5 percent, well below the statewide and national growth rates.

Further adding to the confusion, John Slenker, the labor department’s regional economist in Buffalo, thinks the newly announced fourth-quarter slump is overstated, and the numbers will be revised AGAIN a year from now.

That same story suggested that Slenker’s more optimistic view is backed up by local unemployment data, which shows that the Buffalo Niagara jobless rate has steadily declined for nearly four straight years since peaking at 9.4 percent in February 2012. It dropped to 5.7 percent in January.

And while those numbers are accurate, they do not tell the full story.

Consider the following, from 2012 thru 2015:

  • Erie County’s unemployment rate fell from 8.3 percent to 5.4 percent
  • At the time the county’s labor force fell by 12,000, from 461,000 to 449,000, a drop of 2.6 percent.
  • Total employment grew by just 1,800 positions, or 0.4 percent.
  • Compared to 2008 job figures, jobs in 2015 were DOWN by 22,000, or 5 percent below pre-recession levels.

Adding all that together and saying it a different way, of the 38,400 Erie County residents unemployed in 2012, only 1,800 got jobs, 12,000 left town or quit looking, and 24,000 remain jobless.

These data show a continuing story of slow economic growth in upstate New York. New York needs to make its economy more competitive for investment and job growth statewide. Small business tax cuts, elimination of energy assessments, and meaningful workers’ compensation reform are all part of the economic remedy. The last thing New York needs is a massive increase in wage costs, which is what the proposed $15 minimum wage, and its accompanying $15.7 billion dollar statewide price tag, would bring.

CEO survey shows confidence waning

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.

Uber release highlights economic impact

Officials from the car-sharing service Uber were joined by Business Council President Heather Briccetti, elected officials, and local stakeholders at a news conference in the New York State Capitol yesterday.

Business Council President Heather Briccetti joined by Uber, elected officials, local stakeholders.

The news conference was called to highlight a newly released economic impact study that, among other findings, states Uber would create as many as thirteen thousand jobs in its first year of operation in upstate New York.

The full study, which can be read here, goes on to say that 350 thousand New Yorkers in areas not currently serviced by Uber have downloaded the app. Uber NY General Manager Josh Mohrer says this shows people throughout upstate New York are clamoring for the service.

In addition to yesterday’s news conference and study release, Uber has also launched an online petition giving everyday New Yorkers the chance to voice their approval of bringing Uber to all of New York State. You can sign the petition by clicking here.

How are high energy costs affecting job growth?

The U.S Chamber of Commerce is out with a terrific piece highlighting the negative effect high energy costs are having on job growth throughout New England. The story is familiar to anyone who has tried to own and operate a business in New York.

One of our own member companies, Kinder Morgan, which is in the process of securing approvals for a natural gas pipeline which would run through portions of New York State, receives a mention in the post.

“Pipeline companies are itching to extend their lines to bring plentiful gas into Massachusetts; Kinder Morgan KMI +0.87% has already signed up long-term buyers for the gas it would haul in via its stalled $3.3 billion Northeast Direct line.

But that’s not going to happen, at least not anytime soon. Despite the fact that Western Massachusetts’ GDP plunged 3.6% from 2007-13 (while the U.S. overall expanded 5.6% over the same time), opposition by small, well-organized groups to any new pipeline remains as ferocious as it is irrational. “We want to prevent the overbuilding of gas infrastructure and overreliance on gas, for economic reasons and climate reasons,” says Kathryn Eiseman, head of Massachusetts PipeLine Awareness Network advocacy group. Yet thanks to her group and others like it, in January 2014 New England’s power companies, lacking gas to make electricity, resorted to burning 2.7 million barrels of emergency fuel oil–more expensive and far more toxic, pumping out twice as much carbon dioxide as natural gas. So much for “economic and climate reasons.””

New Yorkers know all too well the negative impact NIMBY-activism can have on economic growth. We encourage you to take the time to read the entire piece and let us know what you think.

It’s time to make way for a sharing economy

It is rare that New York State moves to pass legislation that would have an immediate and positive impact on the Hudson Valley economy. It is even rarer that the bill would not cost taxpayers a penny and has bipartisan support in both houses. Fortunately, such a piece of legislation (A.6090/S.4280) exists and is supported by a number of organizations, including The Business Council of New York State. This particular piece of legislation, which would help regulate the growing “sharing economy,” specifically as it pertains to automobiles and insurance companies, should be passed before the end of the year.

The “sharing economy” is perhaps best exemplified by companies like Lyft and Uber, but there are a whole host of businesses just waiting for New York State to give them the regulatory tools necessary to open up shop. Passing this legislation, sponsored by Assemblyman Cahill, would give New Yorkers the services they want while at the same time giving insurance companies the assurances they need.

Anyone who has lived and traveled in cities like Poughkeepsie, Albany, Syracuse, Rochester and Buffalo knows that the current transit options are woefully inadequate. The lack of consistently reliable public transportation stifles economic development and leaves visitors with a negative impression of our communities and our state.

Ride sharing and other “collaborative consumption” innovations have several benefits to consumers and the economy as a whole. The utilization of underused assets allows ride-sharers to spend less money and moves more people with fewer vehicles. Ride-sharing saves resources, energy and physical space.

The growth of the “sharing economy” is indisputable. A recent report in Forbes Magazine estimated that the revenue flowing through the “sharing economy” surpassed $3.5 billion, with growth expectations that exceeded 25 percent. New York should be at the forefront in encouraging new economic models in a safe and responsible manner. By requiring that group policy insurance be in place for vehicles taking part in ride sharing, the Cahill bill provides a balanced approach to the necessary protections for consumers, insurers and the public at large.

New York has a history of leading the nation when it comes to adopting legislative policies that affect real change in the way we all live and work. Unfortunately, when it comes to the so-called “new economy”, New York’s policies are falling woefully behind. It is time for the Empire State to show true leadership and allow its citizens to take advantage of the benefits technology is affording us all.

Heather C. Briccetti Esq.
President and CEO of The Business Council of New York State, Inc.

*a version of this OpEd ran in the Poughkeepsie Journal on 6/17/15

Rochester tops summer jobs list

How about this for some great news? Forbes magazine is out with an article today highlighting a recent survey by the ManpowerGroup that finds that Rochester, NY has the best job outlook of any U.S. city this summer.

Overall, the study found that employment opportunities are improving nationwide. According to the Manpower Group survey and Forbes, the net employment outlook is 16%, which is an improvement of 2 percentage points from the same point last year.

Getting to Rochester specifically, the state’s third largest city has a net employment outlook of 35%. Forbes spoke directly with Bob Duffy, the former Lieutenant Governor and current CEO of the Rochester Business Alliance, to find out why things are looking up in Rochester.

“According to Duffy, the precision manufacturing industry in Rochester is particularly strong at the moment with companies like Gleason, a machine tool builder, adding employees. Kodak is also on the upswing. Plus Rochester has its share of growing startups. One, data backup and recovery outfit Datto, has plans to have 100 Rochester-based employees by October. The call center company Sutherland is also expanding—so quickly, in fact, that it cannot build new buildings fast enough to house all the new workers that it wants to hire, Duffy says. “We have the highest per capita concentration of patents in the United States and 19 colleges and universities that contribute tremendous brainpower,” he says.”

Rounding out the rest of the list are: Nashville, TN; Provo, UT; and Tucson, AZ.