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State budget aftermath and moving forward
April 21, 2009

The dust is settling from the 09/10 New York State budget, and we’re now able to begin to confirm the damage. Last Friday, the Partnership participated in a press conference with Buffalo Coca-Cola announcing that the new “Bigger Badder Bottle Bill” – another “cash-grab” in the budget – will cause a 30% reduction in its Buffalo Niagara workforce. Also last week, a leading volunteer of our Unshackle Upstate coalition said he will be relocating his company from Binghamton to Pennsylvania as a direct result of the increase in the personal income tax. We fear that more announcements like these will result from this incredibly irresponsible budget.

That being said, the budget is passed, and we already have begun to take two simultaneous courses of action: (1) holding accountable those responsible for the damage this state budget will cause; and (2) continuing to push for reform of state government – including reversal of several items that were just passed in the budget.

Following passage of the annual state budget – particularly in a non-election year – often comes taxpayer apathy. This year, however, that has been replaced by anger, coming from all corners of the state (except the Working Families Party and its supporters, who are popping champagne corks at employers’ expense). It is imperative that that anger carry over to next year’s elections, and the Partnership, with Unshackle Upstate and hopefully other statewide groups, will be very aggressive in the next 18 months to ensure that happens. Details to follow...

From our point-of-view, this irresponsible budget is the direct result of Albany’s unwillingness to reform itself. With that in mind, for the remainder of the state’s legislative session, here are the priorities which can mitigate the extent of the burden on business and citizen taxpayers:

• Implement the Tier 5 pension program recommended in Governor Paterson’s budget proposal.  With a projected savings of roughly $48B over 30 years, the new tier of the pension system would only affect people who are not even state employees yet.
• Advance Unshackle Upstate’s proposal to create a Temporary Medicaid Reform Commission.  To realize meaningful long-term savings and use the federal funds appropriately, New York must examine its health policy in terms of who receives what coverage and at what level. The commission will be charged with identifying Medicaid reforms that will keep state spending on Medicaid, including Federal stimulus funding, flat over the next five years.
• Personal Income Tax (PIT).  Any increase in NYS's already onerous taxes on employers will further erode the state's deteriorating economy. As a starting point, legislation should be introduced as soon as possible which will carve out all businesses that are affected by this new increase. 
• Roll back the assessments on health insurance and energy in 2010-11. Every effort should be made to eliminate the health insurance and energy assessments that were included in the 09/10 budget and utilize the federal stimulus money to replace the lost revenue.
• Wick’s Law.  In the governor’s original budget proposal, he called for all school projects in New York to be exempt from the application of Wick’s Law. Allowance of a time period where the law is not applied will show its effect on the cost of projects statewide.
•  IDA Legislation.  At a time when we should be doing everything in our power to make New York State more attractive for private sector investment, we must protect our state’s job creators from the burdensome regulations outlined in the IDA “reform” bill that would do just the opposite. At the same time, the state must re-open the door for the IDAs to incentivize schools, hospitals and nursing homes allowing over $2B in projects to kick off statewide.

These are our reform priorities for the remainder of the 2009 legislative session. If they had been acted on prior to the passage of the 09/10 budget, they would’ve allayed the need for new and increased taxes.

I urge you to help us focus our state delegation and the administration during the last 10 weeks of the state legislative by sending an e-mail of support today.

Andrew J. Rudnick