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Negatives aside, new state budget bodes well for future

This year’s New York State budget includes positive items like middle class income tax breaks and major infrastructure investments for upstate. It also includes paid leave legislation and a minimum wage increase that have businesses deeply concerned about their impact.

It is important to note that where budget negotiations started on these topics and where they ended are in a much different place. Instead of upstate joining downstate with a mandated $15 an hour minimum wage phased in over five years, the upstate phase-in to $12.50 an hour is at a slower pace, with additional increases tied to future economic circumstances. That happened because of an acknowledgment by the governor and legislature of the differences between upstate and downstate. Now, our government leaders have shown that they’re willing to recognize those differences as evidenced by the minimum wage legislation. Any significant minimum wage increase is not the best case scenario for upstate employers, but it is a far cry from where the proposed legislation started. We have to recognize that through the budget negotiation process, a coalition of business organizations worked tirelessly as a team to point out the negative impact a $15 an hour minimum wage would have on upstate. Our state elected leaders listened and took action.

While many businesses understandably see the downside of the latest state budget, let’s look at the upside. Now that our elected officials have acknowledged the stark differences between upstate and downstate and woven that into legislation, we have an opportunity to push this opening even wider and further by including that vision in worker’s compensation, the scaffold law, and other regulations that inhibit business.

If Albany follows the upstate/downstate game plan, it can be a great addition to positive things already happening upstate. The Finger Lakes Regional Economic Development Council awards, the Upstate Revitalization Initiative investment, and the designation of Rochester as the AIM Photonics hub can only benefit from long-term policy decisions developed with an eye on upstate and specifically the nine-county Finger Lakes region served by Greater Rochester Chamber of Commerce. We urge our elected officials to seize this opportunity and keep driving these changes.

We need to rethink policy and other decisions based geographically in New York State because one size does not fit all. The political power base of this state, as we have heard time and again, is New York City and Long Island. We recognize that. They have more population and therefore more representatives in Albany. However, we can achieve much more equity and much more cohesion in New York State if we start looking at policies along geographical lines.

For example, New York State is the only state in the nation with the antiquated scaffold law still on the books. Implemented in 1885 when New York City was building some of its first skyscrapers and OSHA was not yet in place, the scaffold law imposes one hundred percent liability on contractors and property owners for any fall-related injury on a construction site, regardless of worker fault. This has dramatically increased insurance rates and therefore the cost of construction projects, both public and private to all New Yorkers. There has been in the past some very good legislation authored by our elected leaders that would offer some concessions and changes that would not harm workers but would also reduce costs for contractors, allowing more jobs to be created and taxpayer costs to be lowered. Why not consider a carve-out of this legislation for upstate to demonstrate its value and effectiveness? Looking at worker’s compensation, if the state had taken the same approach to geographic wage indexing as it d
id with minimum wage this year, we would have a more affordable system for upstate employers. As it stands now, the state average weekly wage, from which worker’s comp benefits are calculated, is disproportionately impacted by New York City and its much higher average wages. Had New York State indexed these benefits to regional wages when it changed the benefit formula in 2007, upstate employers would be in a better place. I advocate for the consideration of testing some of these theories upstate so we don’t drive away businesses.

If a 500 employee business closes in midtown Manhattan, it would be like a tree falling in a forest. If a 500 employee business closes in most upstate communities, it would be like a tree falling on your house. By acknowledging the geographical and economic differences between upstate and downstate communities, our state leaders can bridge this divide by being much more sensitive to the needs of upstate without trying to have that “one size fits all” outlook. We should have legislation geared toward upstate and downstate. We should have policy geared toward upstate and downstate. The communities most at risk of losing businesses and jobs are in upstate New York. We have to be treated differently. Albany cannot treat the entire state the same.

New York City is doing fine economically. Long Island and Westchester County are doing fine. Other areas upstate, especially west of Albany, are struggling. The farther you travel from Manhattan and Long Island, the more challenging the economic circumstances are.

Again, upstate must be treated differently. With this year’s state budget, we have broken new ground to do that. Government often focuses on past precedent when looking at future legislation. I believe that this budget, even with some negatives for business, carries the hidden gem of a very positive precedent for upstate that could have a major impact in years to come. The door for this is now cracked. Let’s throw it wide open.

Robert J. Duffy is president and CEO of Greater Rochester Chamber of Commerce. Contact him at rduffy@GreaterRochesterChamber.com.

4/15/2016 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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