Table of Contents
Miscellaneous
• From The Publishers
• Last Look: Syd Farber
Cover Story:
Where’s Everybody Going?
What’s causing some small businesses to pack up and leave? And what should we
be doing to stop them?
Feature Story:
The Excessive Costs
of Doing Business in New York
A productive Small Business Day in Albany, but worries still exist for Rockland-ites and other New York based businesses.
Feature Story:
How’d They Do That?
Follow Provident Bank CEO George Strayton’s strategies for success.
DEPARTMENTS:
Economics Roundup
• The Smart Investor
• Money Talk
Business Roundup
• Unlock Your Potential
• Marketing By Design
Retail Round-Up
• Talking Shop
• Odds & Ends
Ask the Expert
• Estate Planning
• Mortgage Advice
Invest in Your Community
• The Bottom Line
• First Annual Non-profit Leadership Summit
Dedicated Section:
Rockland Business Association:
The President’s Desk
A new voice for Rockland County and a new advocate for its hottest issues and concerns.
Pinnacles of Success
RBA’s best honored at the
Third Annual Pinnacle Awards.
RBA Happenings
• Committee and Council Info
• Calendar of Events
• New Members
The
Excessive Costs
of
Doing Business in New York
By Dylan Skriloff
A productive Small Business Day in Albany, but worries
still abound for Rockland and other New York businesses.
Those attending from Rockland—and indeed throughout New York’s entire business community—were in general agreement on what laws need to be reformed and issues addressed: the overpriced workers’ compensation system, inflated tax structure, high energy and healthcare costs, the 240-241 “ladder law” and Wick’s Law, are among the problems.
Workers’ comp cost
have sky rocketed
Workers’ compensation costs have sky rocketed,
according to a new report. The average cost of a workers’ compensation
case in New York, $16,114, is second highest in the country and
almost double the national median. Other employee benefits, such
as health insurance and unemployment insurance, also cost more
in New York than in most other states. The Empire State’s
minimum wage is sixth highest in the country, 31 percent above
the level in most states, and scheduled to increase further in
January 2007.
Howard Hellman, the owner of All Bright Electric in West Nyack, is concerned about the high taxes faced by Rockland's small business owners, and wonders if a proposed healthcare tax will drive jobs out of Rockland. He's not alone.
New health tax on top of the list
Of equal concern to local leaders,
which included RBA President/CEO Al Samuels, RBA Board Chair Howard
Hellman, Scott Liebert, CLG Financial; Bob Salmon, H&S Sales & Consultants;
Lou Silver, Silver Roofing and Mitch Kahn, A.G. Edwards & Sons,
were spiraling health care costs, especially a recently proposed
bill that would tack on a mandatory $3 per hour employer tax for
healthcare insurance.
The bill would require all non-manufacturing, non-agricultural businesses with 100 or more employees to provide $3 an hour in healthcare benefits for every affected employee, or pay an equivalent tax to the state. According to a study on the proposal by a University of Kentucky economist, passage of the bill could end up costing the state up to 100,000 jobs and impose $9.2 billion in new taxes on businesses.
“In order to achieve prosperity, the State has many issues it needs to confront,” says Hellman. “It causes me great concern to hear about some of the problems facing our State.” Of particular concern to Hellman are those sky-high taxes. “Anyone who knows how an economy works, knows that prosperity comes from healthy businesses, not from taxes,” Hellman states.
The overall cost of doing business in New York is second highest in the nation, after Hawaii, according to a study by the nonprofit agency, Milken Institute, which measured costs for wages, taxes, electricity and industrial and office rents.
Put New York on a “spending
diet”
During his speech at Small Business Day, Governor Pataki
warned attendees that the budget likely to be passed by the legislature
would hike spending and do little to encourage economic growth
or cut taxes; and in fact, on March 31, that budget was passed.
“I’m very concerned that the reforms we need aren’t going to be included in the budget,” the Governor said, He also said the legislature’s budget would not pass necessary reforms in the state’s taxes, Medicaid, welfare and workers’ compensation programs.
“It is wrong to increase spending by over $1.5 billion and not reduce personal income taxes,” Pataki said. He said it was also wrong to increase spending but not eliminate the state’s marriage penalty, estate tax, or alternative minimum tax on businesses.
Speeches by Republican gubernatorial candidates William Weld and John Faso were also featured at Small Business Day. Weld and Faso both outlined reforms they said were necessary to keep taxes and spending down. Faso outlined a detailed plan for alleviating the state’s “self-inflicted” economic distress. “Number one: Put the state on a spending diet,” Faso said. He said the state’s spending should be restricted to the rate of inflation and personal income growth.
Weld would like to see the state offer an exemption of $75,000 of income from New York state personal income tax as a way of keeping jobs and businesses in the state and attracting new ones. He cited a recent Business Council f New York survey of employers which found that New York businesses fear taxes and other costs will continue to drive jobs away.
Rockland has its say
The RBA, says Samuels, had a productive lobbying
session, bringing issues of concern to Rockland County in front
of Democratic Assemblyman Ryan Karben and Republican State Senator
Thomas Morahan. One issue was the on-going debate of upstate vs.
downstate, or us vs. them. Wide swaths of upstate New York, where
only one third of the State’s
residents live, have been experiencing economic depression for
nearly a generation. The lack of response to the needs of upstate
by Albany lawmakers has created a feeling that the interests of
downstate and upstate are at odds.
It distressed Samuels and others in attendance. He said the upstate vs. downstate syndrome is a harmful misperception. “The truth is, there is a very strong lobby in the Assembly from Manhattan. This is a political issue that upstate business leaders, and all business leaders, need to take up with the Assembly. It has nothing to do with the business communities downstate,” Samuels says. He added, “I believe the future of Rockland’s economy is tied closer to upstate than to New York City.”
Bob Salmon would like to see more people voting to force the State’s legislature to act. “When 90 percent of incumbents are getting reelected, regardless of job performance, there is no incentive for improvement,” he said.
“They are just on their own path, serving special interests, but when it comes down to what’s going on in the real world they are not responsive,” he said.
Mitchell Kahn attended Small Business Day for the first time because he has become more involved with local political issues through the RBA. “The day was a good one; whether something gets done is another thing,” he said.
Lewis Silver had gone to Albany several times with the National Association of Home Builders and the New York State Roofing Contractors Association. With the RBA on Small Business Day, he said he received a better reception from lawmakers than in the past.
RBA representatives agreed that the discussion between Republican candidates John Faso and William Weld was a highlight of the trip.
“Both were very bright and well thought out and had a lot of specific answers on the issues. It’s a coin toss who was better,” Silver said.
Small Business Day at a Glance
Small Business Day is conducted
each March by The Business Council. The Chamber Alliance of New
York State and the National Federation of Independent Business
co-sponsor the event. Each year, several hundred representatives
of small businesses and local chambers participate. The agenda
includes opportunities for them to meet and lobby lawmakers and
their staff.
In past years, these meetings of the minds have been critical to New York business’ efforts to convince lawmakers to reduce taxes, make more affordable health insurance available to sole proprietors, reform workers’ compensation and unemployment insurance, and make other critical improvements to New York’s business climate. RBD
NYS Property Tax Burden Far Above National Average New York’s local property taxes grew three times the rate of inflation between 2000 and 2005, a new report from state Comptroller Alan Hevesi’s office has found.
“New York taxpayers’ property tax burden is nearly 50 percent higher than the national average and, for areas outside of New York City, 73 percent higher,” Hevesi said. “Property taxes are by far the largest and fastest growing component of most New Yorkers’ tax bills. Because local governments have little choice but to raise property taxes or cut services when revenues fall short during tough economic times, this trend will continue.”
The report found that New York’s property taxes increased from $26 billion in 2000 to $38 billion in 2005. New York’s per capita property tax burden in 2002 was $1,406, 49 percent above the national average of $945. The report also found that the property tax is the largest tax imposed by local governments, accounting for 79 percent of all local taxes outside of New York City. Property taxes increase when the economy slows or revenues decline, the report found.
“From 1995 to 2005, local property taxes grew 60 percent, while inflation was 28 percent,” the comptroller’s office said. “Most of this growth occurred in the last five years after the economy took a downturn.”
Cost of Doing Business Just Got More Expensive...
Businesses in New York labor under heavier cost burdens than those in most competing states, from business taxes and workers’ compensation to wages and energy costs, a new “Just The Facts” compilation by the Public Policy Institute of New York State shows.
The report includes 39 tables comparing the cost of major business expenses, along with other indicators, in New York and the other states. New York’s business-tax burden is rated the worst in the country by the independent Washington-based Tax Foundation. By another measure, total business taxes as a proportion of private-sector economic activity, New York’s business taxes are 10th-highest in the country and 21 percent above the national average.
The overall cost of doing business in New York is second-highest in the nation, after Hawaii, according to a national study cited in Just The Facts. The average cost of a workers’ compensation case in New York, $16,114, is second-highest in the country and almost double the national median. Other employee benefits, such as health and unemployment insurance, also cost more in New York than in most other states. The Empire State’s minimum wage is sixth-highest in the country, 31 percent above the level in most states, and scheduled to increase further in January 2007.
For more information, visit www.ppinys.org/reports/JustTheFacts.html
Source: The Business Council of New York State (www.bcnys.org)
