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TESTIMONY BY THE BUFFALO NIAGARA PARTNERSHIP TO THE NEW YORK STATE COMMISSION ON STATE ASSET MAXIMIZATION

Public Hearing – Buffalo, NY
November 20, 2008

On behalf of the 2,500 employer members of the Buffalo Niagara Partnership, thank you for the opportunity to be involved in a discussion that is probably more important now than ever before. One only needs to watch the evening news to understand that the sustainability of governments at all levels is going to necessitate creative solutions going forward.

By no means are public-private partnerships the “silver bullet” answer to financial instability, but they are certainly an example of a creative solution. I first must add, however, that as we discuss relationships between the public and private sectors, it is also imperative that New York State join the business community in the ultimate public-private partnership – elimination of the regulatory burden and taxes on employers that continue to make our state uncompetitive. One of the most productive partnerships that we can possibly enter into is the lessening of regulations – such as Wicks Law and Scaffold Law, for examples – that burden our businesses with costs that do not exist in other states.

With that being said…

Buffalo Niagara as a region has already taken leaps forward in the quest for the creation of a proactive and effective system for P3s with the planning surrounding the UB2020 program. In reality, the success of UB2020 depends in large part on the university – with the State’s help – being able to succeed in instituting long-term partnerships with the private sector. Which is why UB2020 is not simply a plan to grow a university – it is an economic development initiative the likes that this part of the State has not seen before.

The good news is that these partnerships are already underway. UB is already working with employers such as Hauptman-Woodward Medical Research Institute, Kaleida Health and Roswell Park Cancer Institute… Not only from a research and scientific point-of-view, but in building an economic entity in downtown Buffalo called the Buffalo Niagara Medical Campus. These partnerships have helped not only grow one of our region’s target industry sectors, but have sparked important investment in downtown Buffalo and the rebirth of the surrounding neighborhood. But there are many more opportunities that exist.

Next week, the Partnership – in conjunction with the cities of Buffalo and Niagara Falls and Erie and Niagara Counties – will release the 2009 Regional Agenda, a list of the Buffalo Niagara region’s top economic development funding and policy requests to our state and federal delegations. The top priority in that list – agreed to unanimously by those partners mentioned – are regulatory reforms the UB2020 program is seeking that would provide the partnership between the university and the community greater flexibility to thrive. We believe that the opportunity exists within UB2020 to create a model for P3s that can be emulated throughout the state.

That’s not to say that this creative strategy is relegated solely to UB2020. With funding streams for transportation investment and other essential governmental services failing, we must explore alternative sources to ensure that the needs of the public are being met. With looming budget cuts, in many cases the implementation of P3s could mean the difference between programs and services existing into the future – or dying a slow and political death.

Vital to successful implementation of P3s are some parameters:

• A set of standards must be developed for potential partnerships, so as to avoid much of the politics that have put our state into the position it is today;
• Among those standards should be a procurement process that is clear, fair and predictable; and
• As you’re doing here today – continue to involve stakeholders in the discussion, as a P3 program that works for both the state and for those with whom the state will be doing business offers the greatest opportunity for success.

Unfortunately, we are here today in the shadow of a national and state financial crisis. It is important that the discussion surrounding P3s not take place simply in an effort to rescue the state from trying fiscal times – which would leave the door open for the implementation of hurried and incomplete policy. We’ve seen other programs such as Empire Zones and the Brownfield Cleanup Program instituted hastily, and then requiring repair. It is imperative that P3s be implemented in a thoughtful, proactive manner, engaging stakeholders with the focus solely on maintaining necessary government services.

In that same line of thinking, it is also important that state revenues derived from the implementation of P3s not be used for anything other than the service to which they are attached. At this point, there would be great temptation to view P3 revenues as an option to decrease the state’s budget deficit. That tact would be ineffective. If the partnership is related to transportation, then any funds derived should benefit transportation. If the partnership is UB2020, then any revenues should be reinvested directly into that program. Proper management of P3s will be the piece that helps the state once again reach fiscal stability – not the promise of new dollars for Albany to corral and spend elsewhere.

In conclusion, once again on behalf of the 2,500 employer members of the Buffalo Niagara Partnership, we believe that public-private partnerships are an avenue that the state should be seriously discussing, and that properly implemented – including clear standards and stakeholder involvement – they can be a valuable tool in restoring fiscal stability to New York State.

Thank you for your time.