Kenneth Adams
President & CEO
The Business Council of New York State, Inc.
Thank you. It is a pleasure to be here this morning to speak to you in beautiful Saratoga County. I want to thank Peter for inviting me and for the support he and this Chamber have shown to the Business Council in our efforts. I especially want to thank you for supporting our campaign to stop the Paid Family Leave mandate.
This is a very exciting time in this county with Global Foundries project beginning. It is also the peak of this county's strong tourism and recreation season.
This county's mix of high tech development, strong companies that make their home here and the tourism industry is in many ways a model for other parts of upstate.
Despite the problems of our state and national economies, Saratoga County continues to do better than many areas upstate. Saratoga County enjoys one of the lowest per capita local tax burdens in the state. Making this a good place to live and do business.
Despite all the success here, the decisions made down the Northway in the State Capitol do have an impact on your businesses and lives. State-wide economic policy developed and put into law in Albany matters as much here in Saratoga County as it does in Broome or Erie or my home of Brooklyn.
And that's where the Business Council comes in. The Business Council is the leading state-wide business association in New York. We are the voice of the business community in Albany. We are your voice in Albany.
Our 3,000 member companies represent a broad cross-section of the state's economy.
Seventy-percent are small businesses; one-third are manufacturers.
Most of New York State's great companies IBM, GE, Corning, Kodak, Pfizer are on our board of directors.
And our members include many major employers right here in Saratoga County, including Stewarts, Ball Container Corporation, Quad Graphics and many others.
Our board chairman is Kevin Burke, Chairman and CEO of Con Ed.
Our mission is to advocate for policies in Albany that create economic growth, good jobs and strong communities all across our state.
We work from the assumption that the private sector is the source of wealth.
The private sector enables government to provide the services our communities need.
While obvious to all of you, this basic economic fact -- that the private sector economy comes before government -- is not always appreciated in Albany.
At the Business Council, we judge every public policy proposal with one simple question: Will the proposal in question help create private sector jobs? If the answer is yes, we get involved. If the answer is no, we don't.
Why this focus on private sector job creation?
Let's take a look at the numbers.
The June unemployment data shows this recession is proving to be deep and lasting. The employment situation out there is terrible.
Most economists believe unemployment will continue to rise and then stay high for a long time, even as the economy starts to recover and businesses' bottom lines improve.
The NYS unemployment rate rose last month to nearly 9%, the highest rate since 1993.
More than 850-thousand New Yorkers were without jobs in June, that's the biggest number on record going back 33 years to 1976.
Fortunately the numbers are better here in Saratoga County, but still troubling. The 6.7 percent rate here is nearly two points below the state average, but still well above what it was in June 2008.
Today there are more than 8-thousand unemployed people in Saratoga, compared to just over 5-thousand a year ago.
Of course there are other key indicators beyond unemployment rates.
Most economists suggest that a good measure of a region's economic performance is personal income growth.
Here Saratoga County has done well. With average per capita income of just over 40-thousand dollars it ranks third in upstate New York and tenth in the state.
Unfortunately our state as a whole has not done well in this area.
In terms of income growth, from 1997-2007, New York State ranked 43nd in US. That's right, 43nd out of 50 states.
Even with a booming NYC economy at the time, the empire state -- was among the eight worse-performing economies in the country, falling in line between Kentucky and Tennessee.
What has happened to New York? Business owners, like you, know the answer.
New York is one of the most anti-business states in the country.
Back in March, CEO magazine's annual survey of 543 CEOs again placed New York behind California as the second worst state to do business in America.
Talk about obstacles to business growth and job creation
Here's what you need to know about New York State:
Personal income taxes in New York are the highest in the U.S. -- 123% above the national average.
Local property taxes are the highest in the country -- 79% above the national average.
We have the second worst business tax climate in the country.
Government in New York collect all these taxes for a reason: Per capita state and local spending is the second highest in the nation, 47 percent above the national average but with only average results in education and health care outcomes to show for it.
And we also have some of the most extensive, complicated, burdensome business regulations in the country.
Finally, here's a real problem few people like to talk about: prior to this recession, we led the nation in the loss of our population to other states, according to U.S. Census data. You are fortunate to live in one of the few upstate counties to see population growth.
From 2000 - 2005, we suffered a net loss of more than 200,000 New Yorkers every year. Basically, we were losing another Syracuse every 12 months.
While Saratoga County has been one of the few bright spots in upstate with a growing population, the population loss elsewhere in the state is staggering.
And it is especially tragic when you consider that so many who move away are our best and brightest young people.
With all this, no wonder it's so hard for businesses to survive in New York. No wonder it's so hard to convince companies to move here or for new companies to start up here.
No wonder it's so hard to create the new jobs we so desperately need right now.
Enough about the problems-- Let's talk solutions.
The driving question is: What can we do to create a more supportive business environment in New York?
At the Business Council we believe that we must leverage this crisis to achieve long-term reforms in government spending and fiscal policy.
We have to make key reforms now so that New York State will be prepared to succeed when the broader U.S. economy starts growing again.
Recently we announced our support for a package of four essential reforms – we call this set of proposals – Affordable New York.
Each idea stands on its own in helping to improve the business climate; together they add up to a transformational strategy for fiscal reform and economic recovery in New York.
And, yes, they will help make New York affordable again.
- A state spending cap: The state spending cap proposed by Governor Paterson would limit the annual growth in State Operating Funds to the average rate of inflation from the previous three years. It is estimated that if a cap like this had been in place from 2003 to 2008, state spending would have been $17 billion less.
- A property tax cap: The Commission on Property Tax Relief, chaired by Tom Suozzi, made its recommendations last December, the most important of which is a cap to limit the growth of school property taxes to 4 percent or 120 percent of the Consumer Price Index, whichever is less. Sky-high property taxes are a huge issue outside of NYC, and the idea of capping their annual growth has wide-spread support.
- Local government consolidation: There are currently more than 10,500 local government entities across New York State. Progress was made on this issue this year when legislation proposed by Attorney General Cuomo and supported by The Business Council was signed into law making it easier for municipalities to consolidate if it makes sense. Consolidation is meant to cut duplicative, wasteful government services and give taxpayers better value.
- Pension reform: Both Governor Paterson and Mayor Bloomberg have called for the creation of a new pension tier for new hires into the government workforce -- called Tier V. The state Division of Budget estimates that this proposal will save nearly $50 billion over the next 30 years. We must have pension reform for both the city and state workforce. Current benefit levels are unsustainable. Without reform, future public pension costs will destroy our economy. Our GM moment is here and now.
All four of these reforms will help reduce the cost of government, lead to lower taxes (or at least lower annual increases in taxes) and put New York on a path to economic recovery. They will make our state more competitive, and help us attract new business investment and jobs.
We must not waste the opportunity our current economic and fiscal crises present to make fundamental reforms in the way our state and local governments do business.
Now is the time to make the bold reforms our state so desperately needs. To use policy, not just projects, as economic stimulus.
To create the conditions that will lead to new job creation and an accelerated and lasting recovery for New York.
Peter, I hope you and the members of the The Chamber of Southern Saratoga County will join with The Business Council to help us move this agenda forward.
Thank you all for your time and attention.