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Poorly conceived legislation hurts N.Y. businesses

The ninth annual Siena College Upstate New York Business Leader Survey found a 15 point drop in CEO confidence. The survey showed that most in our region expect the same or worsening business conditions for 2016. Based upon feedback from Greater Rochester Chamber of Commerce members, I believe the poll accurately captures the sentiments of a majority of our CEOs. This is equivalent to what other chambers are hearing as well.

People who run businesses and organizations feel that they are in a valley with pressures running downhill on them from all directions. They have pressures with their markets and sales, they faced the recession of 2008 and may face another one in the next couple of years, and it seems like more often than not, new pressures are placed on them through taxes, mandates, regulations, and other new pieces of legislation. This creates an environment that no doubt makes business harder to conduct in our state.

In my four years as lieutenant governor, I worked on behalf of Gov. Andrew Cuomo to recruit and retain businesses in New York. I have heard hundreds of CEOs discussing their frustrations about conducting business here. Their top concerns are taxes and regulations that exist across federal, state, and local agencies that make doing business harder here. These business leaders often express the feeling that they are doing something wrong and find themselves in situations where they’re being recruited out of state. I have a very good friend who moved his business from Rochester to South Carolina. Based on what he saved in the first year, he was able to hire two additional people for his staff. We have to understand that every day, the competition out there is in our backyard. Out of state entities are constantly contacting and recruiting our companies, trying to lure them away.

The situation between New York State and local governments and business is equivalent to a marriage or a relationship. If there is not sufficient communication, at some point one person walks away. We’re seeing that right now with business. I find it fascinating that sometimes  people who have been in business for decades have never had a personal visit by someone in government just asking how they can help. When visits come, they are usually for punitive or enforcement purposes as opposed to showing up and asking what they can do to make things better. The first question I ask when visiting Rochester Chamber members across the nine-county Finger Lakes region is, “how can we better serve you?” Government at all levels has to do that same thing.

Gov. Cuomo has taken many positive steps in the forms of a property tax cap, small business tax reductions, and the easing of some regulations. While many are quick to blame him and the current Legislature for the problems facing business in New York, it is important to keep in mind that the troubles started decades ago. Some ill-advised decisions that on their face looked great have created many severe and unintended consequences for business owners over the years.

We all share a role in changing the state. A suggestion that I have is that before any legislation that may negatively impact business is brought to the floor for a vote, legislators from around the state should convene not only public hearings, but also private meetings with business leaders to ask for their feedback. Public hearings are often for show. I think it’s much more effective to go to people and ask them privately how they believe a piece of legislation would impact them. What may not impact downstate may have dramatic negative implications upstate. You have to look at things regionally. We have to do a much better job of getting people’s input.

Rochester Chamber recently held an employer forum on the proposed $15 minimum wage. No one argues that making more money can help people pull themselves out of poverty and raise their quality of life. However, you can’t do it artificially. At the forum, we heard from business owners who clearly care about their employees, but they said if an employee’s skill is worth nine dollars an hour, they can’t afford to pay them $15. Where is that going to come from?  Many of these employers already struggle week to week to make payroll. You can’t advantage a small number at the disadvantage of the majority. Many of these government decisions do just that. Often, various pieces of legislation are put forth to garner favor for support in future elections.

The burdensome business climate in New York State did not happen overnight and it’s not going to change overnight. Things like health care costs, workers’ compensation, minimum wage, the antiquated Scaffold Law, and other regulatory pressures are leading to businesses leaving, fewer jobs for our residents, less revenue generated, and less philanthropy.  Let Tom Golisano’s move to Florida be a lesson to us all. A man who has put countless millions of his own money into charitable organizations moved south for the majority of the year to escape New York’s tax burden and to make a point. Had New York listened and acted years ago, that move may have never been necessary.

It is outreach. It is communication. It is gathering real input before rushing to pass a law and holding a news conference claiming credit. After news conferences, back slaps, and kudos fade away, we are often left with some dire economic situations across our state and nation.

Robert J. Duffy is president and CEO of Rochester Business Alliance Inc. Contact him at rduffy@greaterrochesterchamber.

2/19/2016 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

One comment

  1. Some fair points from the former Mayor and Lt. Governor. But his proposal for “private meetings” between business mavens and Legislators brought a smile. You mean this isn’t happening already? Is Mr. Duffy unaware of the ethics issues here in NY State?
    It smacks of the backroom dealing all too familiar to us citizens, business people or otherwise. Who determines who’s at the table? The big corporate guys and their lawyers? What about legislation that positively impacts a business sector e.g. energy but negatively impacts all of us? Who speaks for us other than legislators beholden to their contributors?

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