Dire straits
Economic gloom from Business Council
By LYNN WOODS

At the New Paltz Regional Chamber of Commerce’s luncheon on Oct. 3, hosted at the Locust Tree Restaurant, Ken Adams, president and CEO of The Business Council of New York State, delivered a distressing message: The state’s economic performance is dismal.

Blame can’t be laid on external factors, such as outsourcing, globalization and free trade, said Adams. Rather, the difficulty is rooted in the state’s governmental dysfunction. The way to begin fixing the perennial problems of sky-high taxes, exorbitant health-care insurance costs and soaring electricity rates is for the business community to “muster the political will” for change, Adams said.

Adams, who described his organization as a kind of chamber of commerce for the state, discussed these issues in the context of The Business Council’s first-ever economic growth index. This rated all counties and the state, as well as the other states, with a grade based on performance in five criteria related to job growth and wage increases, compared with the national average. Ulster County got an F and the state, which surpassed the national average only in growth of wages, a reflection of the high salaries in New York City, got a D.

The recent reform legislation that lowered the cost of workers’ compensation insurance while increasing benefits was a welcome development, saving businesses more than $1 billion in costs, Adams said. However, more reform legislation is needed. The scaffold law, for example, which makes employers absolutely liable for any injury on a construction site, even if it was due to the worker’s carelessness, needs to be overturned, with the standard of liability changed to negligence. Health insurance rates are high in New York because of more than three-dozen mandates imposed on health plans, along with taxes built into the rates, Adams said. To ease electricity costs, more power plants need to be built and a fast-track siting law, which expired in 2002 and whose reinstatement failed to pass the state Legislature in the last session, finally made into law.

“Our elected officials in Albany must accept the brutal facts,” said Adams, whose boyish charm somewhat belied his doomsayer’s role. “They have to admit there’s a crisis and make New York’s economic recovery their number-one priority. We have to judge their performance as politicians in the context of the economic crisis. Are they improving the state’s competitiveness or not?” Adams added that any kind of incremental change would be applauded. In next year’s index, “I’d like the state to move to a C or C-.”

The former head of the Brooklyn Chamber of Commerce ­ he still maintains a home and office in Brooklyn, commuting from Albany ­ Adams was appointed president of the council last November. Since then he has been spending much time on the road. New Paltz is the 18th chamber of commerce he’s visited so far of a total 86 chambers across the state.

The Business Council, which has a staff of 45, has 3,100 members, 70 percent of which are businesses with 50 employees or less. The group also has 70 major corporate sponsors. A third of the members are manufacturers, said Adams.

Despite being from the big city, Adams said the challenges faced by the Brooklyn chamber members mirror those confronting upstate businesses. Most of the members were small businesses that often felt at odds with the glamorous world of high finance across the river, he said.

The overall mission of The Business Council is to improve business conditions in the state to the point where it’s a place “businesses want to move to, not from, to bring it the point where there’s more reasons to say, ‘Yes, I want to stay in New York, employ people and support the community.’” Lobbying the government for changes to make this happen is a core activity of the council.

Adams is also working with Gov. Eliot Spitzer’s administration. He is an advisor to first lady Silda Spitzer’s “I Live New York” campaign, which is aimed at retaining young workers in the state. Despite gaining 100,000 new immigrants a year, New York is one of four states that is losing population, with a negative outflow in the year ending July 2006 equal to the entire population of Rochester and its neighboring small towns, Adams said. Many of those leaving are the state’s “best and brightest young people.”

Adams participated in the “I Live New York” kickoff event held last month in Cortland and attended by 600 young adults. “It was the first time people were brought together by young professional groups incubated by the chambers of commerce to revitalize the economy,” he said.

The state budgets $1.2 billion for work force development, which The Business Council would like to steer toward creation of more innovation and technology jobs, especially in the Hudson Valley. Other long-term goals are to improve the incentives offered through Empire State Development and lower the cost of government through consolidation. Within the council itself, Adams said he intends to strengthen government affairs, improve communications with the local chambers and strengthen the marketing and sales department to build up the membership.

 

 

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