Table of Contents
Cover Story:
Small Business is BIG Business
In Rockland, small businesses are the engine that drives the economy
RBD Round-Up:
How'd He Do That?
The interesting rise of Mal McLaren
RBD Business Survey
How do you communicate?
DEPARTMENTS:
Economic Round-Up
• The Smart Investor
Your portfolio is doing great, so why rebalance?
• Economic Viewpoint
The U.S. Attraction Factor
Business Round-Up
• Down, But Not Dirty
The best way to handle company layoffs is to provide options
• Marketing By Design
The top 15 campaigns of the last 100 years. You know them all, but why?
• Receivables
One of the largest headaches for small businesses
Ask The Experts
• Talking Taxes
• Payroll: Key Issues
• Workplace Hotline
Invest in Your Community
• Where's the Fire?
Rockland Volunteers - increasing efforts and awareness
Odds & Ends
• The Last Minute
• Rockland Newsmakers
Dedicated Section:
Rockland Business Association:
The President’s Desk
New Healthcare Tax
will hurt small and midsized businesses. Here's how.
RBA/United Way Golf Outing
The Rockland Open: Monday, May 21st
RBA Happenings
• Committee and Council Info
• Calendar of Events
• New Members
From The
President’s Desk
New healthcare tax will hurt
small and midsized businesses
by Al Samuels
It is the most contentious of our endeavors. The most time consuming. Sometimes, the most frustrating. Most times, thankfully, the most rewarding. And always, the concern is the effect an issue will have on your ability to operate and grow your business in Rockland and New York State.
Economic impact is a relatively easy issue to dissect. And, invariably, the issues we pursue involve economics. But, sometimes, there are even larger issues, issues of honesty and ideology.
I don’t know why so many of us are uncomfortable addressing these issues, for they are what define us both as individuals and as a society.
Legislation has been reintroduced in Albany to create a so-called “healthcare reinvestment fund suburban demonstration project.” What this proposal does is establish a quarter-billion dollar tax solely on health insurance premium payers who purchase fully insured health insurance from for-profit health plans in the nine-county region around New York City. This proposal will directly increase health insurance premiums imposed on small and medium-size businesses, those least able to afford it. That’s the easy part of the debate, the economics. The harder part is the dishonesty of this flawed bill and the bad public policy it would create.
A group of business people has determined that another group of business people is making too much money and they want the government to take some of their earnings and give it to a third group of business people (with whom they happen to do business).
Although the legislation did not pass in the 2006 legislative session, Senator Tom Morahan and Assemblywoman Amy Paulin have reintroduced the proposal (S.4016 / A.6509). In light of the recommendations of the Berger Commission and the substantial flow of state and federal aid to facilitate and enhance the restructuring of New York’s health care system, there is little justification for a new tax on our small business community. A large coalition of business groups opposed this legislation in 2006 and continues to oppose the idea, and is asking the business community in the nine-county region to do the same.
New York State employers responding to a Business Council survey overwhelmingly identified employee health care as their top cost-of-doing business concern. The Council received some 1,080 responses, which is nearly twice the number of respondents from any previous Council survey of its members. Thirty percent of respondents said health insurance for themselves or their employees was their top cost-of-doing business concern, and more than 65 percent of respondents ranked health insurance as one of their top four issues.
The community reinvestment proposal would constitute another hidden tax. The promoters of the bill deny this, but saw fit to write-in exemptions for their “constituents,” self-insured companies, municipalities and others. One thing I learned early on in my dealings with the legislative process: when bills contain exemptions, someone is being protected and someone else is getting hurt. In this case it would be the small and medium-size businesses that make up 97% of Rockland’s business community.
This is the dishonesty of this legislation. To some of us, the ideological aspect is even more serious. A group of business people has determined that another group of business people is making too much money and they want the government to take some of their earnings and give it to a third group of business people (with whom they happen to do business).
This is socialist economics, “redistributionism,” and should be anathema to all business people. Instead, it’s being used as a means to an end that could put us on a public policy course that could seriously damage our capitalist system.
Most of my colleagues don’t want to touch this part of the issue. Business people are sometimes uncomfortable with issues involving ideologies, but it’s because we are business people that we must rise above the emotion and fight those things that threaten the very system under which we operate. It is with great pride that I note that our Chair and the members of our Executive and Government Affairs Committees have shown exemplary leadership in our fight against this bill.
New York businesses pay substantial taxes and fees to help underwrite New York’s costly health care system. In fact, no other state taxes health care premium payers as aggressively as New York. Currently, employers pay more than $2.5 billion annually to finance bad debt and charity care, Graduate Medical Education (GME) and a spectrum of other projects, initiatives and programs. In the Hudson Valley, the “covered lives” assessment that funds GME adds an additional $79.69 to every family health insurance policy. For family policies on Long Island, the extra burden is $136.45. The recently passed state budget increases the tax $75 million statewide.
Additionally, premium payers contribute taxes to help fund nearly $200 million in operational aid for the state Insurance Department and other state programs. Today, health insurance taxes represent the second highest employer tax in New York – eclipsed only by corporate franchise taxes. These taxes directly contribute to our elevated health care costs and high number of uninsured.
This proposal exacerbates the insurance affordability crisis by further taxing those employers already struggling to provide coverage for their employees. We also are concerned how these new revenues would be allocated. Under the terms of the bill, receipts from this tax are designed to enhance hospital information technology (HIT) – but without commensurate accountability. These additional subsidies are not warranted.
Promoters of this proposal are disregarding the substantial investment for HIT and restructuring available to regional hospitals being made by the state and federal governments. The New York HEAL program—established to seed more than $200 million to fund collaborative efforts between providers and health plans to enhance HIT—has begun this process with $52 million that is already being allocated in first round disbursements.
And, New York hospitals will soon be able to take advantage of nearly $1.5 billion, in federal funding, over five years that is earmarked to help facilitate the recommendations of the Berger Commission.” This influx of significant funding begs the question why legislators would seek to impose additional taxes in these nine counties to raise capital for needs already being funded? RBD
