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Efforts under way to return New York as the Empire State
By PAT FOYE and DAN GUNDERSEN

In his State of the State address, Gov. Eliot Spitzer spoke about a “perfect storm of unaffordablity” ­ a combination of high taxes, overregulation and burdensome costs that was driving businesses and people, especially young people, away from the state.

In July, the governor and state insurance Superintendent Eric Dinallo announced a $1 billion annual cut in workers’ compensation rates that will go a long way toward battling the high cost of doing business in New York. The 20.5 percent reduction translates to a billion-dollar savings to New York’s employers that doesn’t cost individual taxpayers a dime.

The magnitude of the cut is another signal that New York is open for business and that this administration has replaced talk with result-focused action.

After years of failed negotiations, this administration was able to bring together members of the business and labor communities to achieve this reform. It cuts costs to business owners, while increasing benefits to workers for the first time in more than a decade. It streamlines the claims process, increases fraud protection and implements improved diagnostic and treatment steps for doctors. Next, we will look to speed up the resolution of disputes, another measure that will help control costs.

The new rates move New York’s workers’ compensation cost from 9 percent above the national state mean to 14 percent below. Being below the national figure for a major cost of doing business sends a powerful signal to those who might consider investing in New York.

And the workers’ compensation agreement has not been the only attack on the perfect storm. During this year’s budget battle, the administration also won a $75 million tax cut for manufacturers along with a $75 million cut for corporations. These changes are especially a boon to upstate and its significant manufacturing base.

New York remains the 12th-largest economy in the world, but in recent years, the state has lost some of its reputation as a pioneer for business growth. Between 1995 and 2005, New York ranked 39th in private employment growth. Those are poor marks. It is why we and our entire new state economic development team are working aggressively to change the business landscape in New York.

The reduction in workers’ compensation rates and corporate taxes are one part of a comprehensive plan to return the state to its prominence as a business leader by bolstering existing strengths and focusing on growth industries that are part of the “innovation economy” that is transforming the global marketplace.

We are also strengthening links between downstate and upstate. For too long, these two regions ­ areas that naturally complement each other ­ have run on separate tracks, hurting the state as a whole. As Spitzer reminds us, we’re “One New York,” a state filled with dedicated private-sector employers, top research universities, a skilled work force of 9 million, and tourism attractions from Long Island to Manhattan Island and the Thousand Islands.

In making decisions, businesses often look at trends. With $150 million in corporate income tax reductions and a 20.5 percent cut in a major business cost, New York is trending in the right direction. Businesses should soon begin to take notice.

Pat Foye and Dan Gundersen are the co-chairmen of Empire State Development. Foy works in the Manhattan office and Gundersen is in Buffalo.

 

 

 

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