Governor Spitzer Budget

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Governor Spitzer's Proposed Budget

Nothing that amounts to $120.6 billion can be uncomplicated, and that's certainly the case with the state budget proposed by Governor Spitzer this week. We support a number of the governor's proposals, and applaud his continued attention to Upstate.  That said, his budget also includes items that have raised our eyebrows - and we suspect the eyebrows of some of our region's employers.

Let's start with the items that address our state business climate concerns (and which fall under the umbrella of Unshackle Upstate):

The governor recognizes the burden property taxes place on New York's residents, particularly those of us who live Upstate.  In fact, his budget PowerPoint presentation had a few slides about New York residents bearing the burden of the nation's highest state and local tax burden that might as well have been lifted right out of the Unshackle Upstate presentation we've been giving around the state.

Governor Spitzer's budget includes some strong proposals to deal with many of the state-imposed mandates that drive up taxes here.  They include good first steps (more than $1 billion in savings) to bring down Medicaid costs, and to lift the Wicks law threshold Upstate to $1 million (Wicks law currently requires municipalities to hire multiple contractors on projects larger than $50,000, and as a result, taxpayer-funded construction costs are driven up by as much as 20 or 30 percent). These are both key items on the Unshackle Upstate agenda.

Another focus of Unshackle Upstate is workers' comp, an item not dealt with it the governor's budget, but something we've been consistently reassured will be "coming soon" by his administration.  We're anxiously awaiting what we hope will be a proposal that would impose a time limit on benefits for injured workers with permanent partial disabilities, form a joint labor-management "Return to Work" task force, and raise weekly benefits for injured workers (though employers pay among the nation's highest workers' comp rates, injured workers in New York receive among the nation's lowest weekly benefits.  Increasing the benefit, while capping permanent partial disability will, we hope, be a compromise that can win labor - and thus the state legislature's - support.  It's a combination that can save employers considerable expense).

We have some outstanding questions about the municipal and school aid proposals in the governor's budget.  Each of these contains pieces we would be strongly supportive of, but we need to reserve judgment until we learn more about the "increased accountability" the governor plans to tie to more funding.

The part of the budget that worries us most at the Partnership, deals with what the governor calls corporate "loopholes," but which we know many of you would call "more costs."  We are gathering input from our members about how these items - which would generate $600 million in new revenue for the state - will affect their business (please let me know) and will work to make sure these concerns are heard, and addressed, by the executive office and the legislature.

Enjoy your weekend.  Stay tuned.

Andrew J. Rudnick

President & CEO