Business Council Discusses Governor’s Budget

The Business Council supports most of what is in Gov. Andrew Cuomo’s 2013-14 budget.

However, there are still items the business advocacy group would like removed or reformed in the spending plan.

On Friday, Ken Pokalsky, The Business Council vice president of government affairs, led an overview on Cuomo’s proposed budget, during a regional briefing at Roberto’s Restaurant in downtown Jamestown. Pokalsky has served on a number of state advisory panels and is a member of the state’s Business Taxpayer Advisory Committee. He is also The Business Council’s liaison with Empire State Development Corporation and the Department of Taxation.

Pokalsky said the proposed budget has a spending increase of less than 2 percent for the second consecutive year. The budget proposes a $2.5 billion increase in spending, which is a 1.9 percent hike. He said previous budgets, through the ’90s and earlier this decade, had much larger increases.

”For New York state, this is a remarkable achievement,” Pokalsky said about the less than 2 percent proposed budget increase.

He said even through there is a $10 billion spending gap projected for fiscal year 2015, that by keeping spending under 2 percent and with an increase in revenues, a modest surplus could be reached by 2016.

Pokalsky said The Business Council also supports infrastructure and development capital, unemployment insurance and workman’s compensation reform and deferred tax credit repayment initiatives in the budget. However, he said The Business Council does not like the 18a energy tax extension, the proposal for an increased state minimum wage and restrictions on Industrial Development Agencies.

The 18a energy tax would cost New Yorkers $472 million annually, The Business Council officials have said.

”Our position is just say ‘No,”’ Pokalsky said.

As for the proposal to increase the minimum wage, Pokalsky said it is, ”more likely than not,” to happen. He said if it is going to be increased, The Business Council would like to see a training wage established for new employees and for the minimum wage not to be indexed with inflation. Last month, Gov. Cuomo proposed raising minimum wage from $7.25 to $8.75 in his State of the State speech. The Democratic governor says New Yorkers at the low end of the income ladder should earn more. The increase would be a 17 percent hike.

In Gov. Cuomo’s proposed budget, the state’s IDAs would no longer be able to grant state sales tax exemptions for economic development projects. Instead, that authority will go to Cuomo’s Regional Economic Development Councils. It’s a move that has the local economic development agencies upset.

Bill Daly, county IDA executive director, said by giving the power to regional councils, it will weaken the local organization because officials from larger municipalities, like Buffalo, would have more control.

”There is so much good about regional councils, and there is so much bad,” Daly said during the briefing Friday.

Right now, New York’s IDAs have the ability to give out local and state tax breaks in order to encourage economic development. The governor says the change will keep IDAs accountable by requiring them to have projects that involve state tax exemptions to be approved by the regional councils.

Assemblyman Andrew Goodell, R-C-I Chautauqua County, who also spoke during the briefing Friday, said it is not ideal for officials in Buffalo to be making decisions for residents in Chautauqua County.

”It is a scary concept. We are very different from Buffalo,” he said.

Pokalsky said The Business Council would also like reform to the Excelsior Job Program. The program’s purpose is to offer tax credits which are available for strategic businesses such as high tech, bio-tech, clean-tech and manufacturing that create jobs or make significant capital investments. He said, right now, restrictions are too tight so the program is being underutilized.

”We think we’re missing out on opportunities by the state having a lot of criteria,” he said.

Pokalsky said by expanding the program to offer more tax credits, the program would be more beneficial. Plus, with a $500 million cap in the state’s budget, by making it easier to receive tax credits, the program would not become out of control.