In recent years, businesses and families have left Upstate New York in record numbers. Private sector job losses have devastated our communities. New York State’s leaders have not shown a commitment to job creation and economic development. In fact, our image over the last decade has been quite the opposite – we have one of the worst business climates in the nation. It is beyond dispute that the state’s policies have contributed to our economic problems by failing to meet the economic challenges we face. In many cases, Albany hasn’t just failed to act – state government has actually adopted policies that have made our economic situation even worse. This report takes a hard look at what New York State has done right since the beginning of 2011, and what additional steps will address the high cost of doing business in the state.

1. Unshackle Upstate 2011-12
Mid-Term Progress Report
A Review of Progress on
Budget and Legislative Issues
NEW YORK’S
TAXPAYERS
AN
JOB CREATO D
RS
WANT A 2%
Property T
AX CAP
November 2011

3. INTRODUCTION
In recent years, businesses and families have left to meet the economic challenges we face. In
Upstate New York in record numbers. Private many cases, Albany hasn’t just failed to act – state
sector job losses have devastated our communities. government has actually adopted policies that have
New York State’s leaders have not shown a made our economic situation even worse.
commitment to job creation and economic
development. In fact, our image over the last This report takes a hard look at what New York
decade has been quite the opposite – we have one State has done right since the beginning of 2011,
of the worst business climates in the nation. and what additional steps will address the high cost
of doing business in the state.
It is beyond dispute that the state’s policies have
contributed to our economic problems by failing
A NEW DAY AT THE CAPITOL
Overall, 2011 has been a good year for taxpayers
and employers – perhaps the best year in recent
history.
New Year’s Day 2011 began with the inauguration
of a new governor and the promise of changing
Albany’s dysfunctional ways. Immediately upon
taking office, Gov. Andrew Cuomo spoke of the
many challenges facing New York State – including
Unshackle Upstate Executive Director Brian Sampson
spoke alongside legislative leaders during a pro-property
tax cap event in April 2011.
majority in the State Senate, and Senator Dean
Skelos (R-Rockville Centre) was elected Senate
Majority Leader. This new leadership brought
with it stability and predictability – representing a
welcome change from the chaos and dysfunction
that characterized the Senate in 2009 and 2010.
Much remains to be done. Upstate New York’s
Gov. Andrew Cuomo delivered his State of the State economy did not crumble overnight, nor can it
address across New York in January 2011. be revitalized immediately. Restoring the Upstate
a $10 billion state budget deficit. The governor also economy will require a long-term, sustained effort
made it clear that he intended to follow through on by state government to understand and address
his campaign promise to cap the growth of local the needs of the business community – and of the
property taxes. taxpayers – who help make our communities thrive
and prosper.
New Yorkers also returned the Republicans to the
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4. UNSHACKLE UPSTATE’S CORE PRINCIPLES
Unshackle Upstate continues to focus its work on the following principles:
Reducing State and Local Spending
Government spending continues to be a major issue for New York State. While the 2011-12 state
budget reduced spending by 2 percent, the downward trend must continue in order to “right size”
state spending. Additional savings must continue to be explored by consolidating and streamlining
services. Spending on education and Medicaid - which make up a significant majority of the state
budget - were capped in this year’s budget, but additional recurring savings must be found for the
future.
Reducing Taxes, Fees and Assessments
The 2009-10 and 2010-11 state budgets included $9.2 billion in new taxes and fees. This year’s
state budget did not include any new taxes or fees. This action was a significant first step toward
improving the state’s economic climate, and the 2012-13 state budget should continue reducing the
tax burden on New Yorkers.
Reducing State Borrowing
Also included in this year’s state budget were significant corrections to the state’s future debt and
borrowing policies. For example, the governor and Legislature reduced the 2012-13 projected
budget deficit from $15 billion to approximately $2 billion. As it continues to reduce its spending,
the state should avoid relying on irresponsible borrowing and long-term debt.
Reducing Mandates
The tangle of laws and regulations that makes New York notoriously unfriendly to business and job
creation also saddles local governments with expensive requirements, typically without funding to
pay for them. The result: a tax shift to local governments to cover the cost of paying for a range of
services – all at the expense of the taxpaying public.
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5. REVIEW OF THE 2011 LEGISLATIVE SESSION
How did Albany lawmakers do in 2011? When than $125 million annually, according to the
compared to recent years, they did extraordinarily Division of Budget – included in the property tax
well. cap law were woefully inadequate.
New Yorkers saw an on-time state And while it is too early to say
budget that not only reduced whether the Regional Economic
spending, but successfully Development Councils will
addressed a $10 billion budget succeed in promoting private-
gap. The governor signed sector job creation, we are
into law an historic 2-percent pleased that the effort is a
property tax cap which also regionally-based one that will
established a Mandate Relief take advantage of the unique
Council that can address and attributes and strengths that each
provide relief from costly and part of New York State has to
burdensome regulations that offer.
Unshackle Upstate Executive Director
the state has imposed on local
Brian Sampson discussed the
governments. organization’s advocacy efforts with The remainder of this report looks
members of the Capitol press corps. at what Gov. Cuomo and the
But by virtually every measure, Legislature accomplished during
the Upstate economy is still struggling. There is still the 2011 legislative session, and also discusses what
much more that needs to be done. The mandate remains to be accomplished during 2012.
relief provisions – which will save taxpayers more
2011 BUDGET REVIEW
WHAT HAPPENED UU OPINION
Overall 2011- Lawmakers enacted an on-time This year’s state budget represents
2012 State state budget that cut spending by 2 a huge improvement over the 2009-
Budget percent and closed a $10 billion deficit 10 and 2010-11 state budgets, both
without increasing taxes or state debt. of which increased taxes and state
spending.
State Agency The governor advanced and These state agency consolidations
Consolidation achieved a number of state agency that were achieved represent an
consolidations through the state excellent first step toward “right-
budget, saving over $50 million sizing” state government.
during the current fiscal year. The
governor also achieved passage of the The Executive Reorganization Act can
Executive Reorganization Act of 2011, be an important tool in achieving
which allows him to submit an agency additional agency consolidation and
reorganization plan to the Legislature savings for state taxpayers.
that must be voted on.
(cont. on next page)
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6. WHAT HAPPENED UU OPINION
Spending and The governor launched the The SAGE Commission is the means
Government SAGE Commission in mid-April through which the governor will
Efficiency (SAGE) “to undertake a comprehensive propose an agency reorganization
Commission review of every state agency of plan to the Legislature. Unfortunately,
state government and recommend while the SAGE Commission began
structural and operational changes its work, it did not present an agency
to it.” The group held two meetings, re-organization plan by the statutory
but did not advance an agency deadline.
reorganization plan for consideration
by the Legislature. The governor should direct the SAGE
Commission to begin working again
to ensure that it is able to present an
agency reorganization plan to the
Legislature in 2012.
Recharge NY The state budget included the Making this program permanent
Recharge New York, which made the – which was long overdue – will
Power for Jobs Program permanent. provide low-cost energy to job-
creating businesses and not-for-profit
organizations across New York State.
Sales Tax The enacted state budget renews the This is an example of a tax reduction
Exemption state sales tax exemption for clothing that will immediately benefit families,
purchases under $55. Next year, the and it will also benefit businesses
state sales tax exemption will apply to close to the state’s borders by keeping
all clothing purchases under $110. shoppers in-state.
Reducing Governor Cuomo’s Medicaid Redesign This represents a huge step forward
Medicaid Team (MRT) recommended some – reductions in Medicaid spending
Spending $5 billion worth of cuts to the were long overdue.
program, and to cap the state’s share
of Medicaid spending. Most of the However, the failure of the governor
MRT’s proposals became law. and Legislature to reach agreement
on medical malpractice reform –
The enacted budget provides for a which was recommended by the MRT
two-year Medicaid appropriation, – represents a missed opportunity.
providing for a fixed rate of growth
for the 2012-13 budget.
Education The governor proposed a $1.5 billion Ending the practice of increasing
Spending cut in education spending, and the state aid each year – regardless of
Legislature restored about $230 the state’s ability to support such
million. spending – is critical to restoring the
state‘s long-term economic well-
The enacted budget provides for a being.
two-year appropriation for education,
providing for a fixed rate of growth
for the 2012-13 budget.
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7. 2011 LEGISLATIVE REVIEW
WHAT HAPPENED UU OPINION
Property Tax The governor signed into law a 2- This historic law, while not perfect,
Cap percent property tax cap (Chapter 97 should provide most Upstate
of 2011) that exempts some pension New Yorkers with relief from ever-
costs and tort costs. The cap allows increasing property taxes.
for growth, and includes an override
option that would allow for the tax The sunset date built into the law
levy to exceed the cap when 60 means that it will have to be approved
percent of voters (for school districts) again in the coming years.
or 60 percent of the total voting
power of the governing body (for But the failure to achieve real
local governments) approve such an mandate relief this session (discussed
increase. below) will put a great deal of
pressure on local government officials
to live within the property tax cap.
SUNY The governor signed into law the This will strengthen SUNY’s ability to
NYSUNY 2020 bill, which includes provide quality affordable education,
a Challenge Grant Program to enable students and parents ensure
encourage economic development that they can afford their education,
plans on SUNY campuses and and will enable SUNY campuses
the surrounding communities across the state to become engines
and a rational tuition program of for economic development.
predictable tuition increases which
will benefit the SUNY campuses
themselves.
Health Insurance Two proposals would have increased As the cost of health insurance
health insurance premiums – the coverage continues to rise, the
Health Care Reform Act (HCRA) Legislature should not approve any
surcharge and a bill that would have legislation that will increase costs for
allowed for collective negotiations those with private health insurance.
by health care providers (S.3186-A/
A.2474-A) – were not approved. We note again that the Health Care
Quality and Cost Containment
Commission does not appear to
have met since it was enacted into
law in 2007. We urge the governor
to appoint the members of this
Commission to analyze the costs and
quality of proposed health insurance
mandates as soon as possible.
(cont. on next page)
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8. WHAT HAPPENED UU OPINION
Article X Siting The Power NY Act included a new The new power plant siting law will
power plant siting law to streamline encourage the construction of new
the decision-making process with electric generation and help reduce
respect to the construction and rising energy costs incurred by
operation of new major electric Upstate’s manufacturing industries
generating facilities, or the re- and other large energy users,
powering of existing facilities. providing a much needed boost to
the Upstate economy.
Workers’ The Legislature introduced several It is critical that the 2007 reform
Compensation bills that would erode cost reduction law be implemented as intended to
components in the 2007 Workers’ ensure that it provides the savings to
Compensation reform package, businesses while ensuring access to
including S.3741/A.6294 (which medical care and benefits for injured
passed the Assembly, but did not pass workers. Bills that undermine the
the Senate). historic 2007 reforms – such as S.3741/
A.6294 – must be rejected.
Project Labor During the final negotiations on Mandating or encouraging the use
Agreements the property tax cap/mandate relief of PLAs arbitrarily increases public
legislation, attempts were made to construction costs since bids must
encourage the use of Project Labor include antiquated and costly
Agreements (“PLAs”) by enabling union rules that increase labor costs
project owners to require them and render the majority of local
instead of going through the separate construction workers ineligible to
bidding process otherwise required work on the project in favor of hiring
by the Wicks Law. only union construction workers.
Proponents argue that PLAs ensure
the speed and quality of construction
plans. But PLA projects cost taxpayers,
on average, 12-18 percent more
than projects awarded by open,
competitive bidding.
(cont. on next page)
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9. WHAT HAPPENED UU OPINION
Union Contracts Governor Cuomo reached agreement The 2011-12 state budget reflects
with the leadership of the state’s savings that are to be achieved
two largest unions (CSEA and PEF) through a reduction in labor costs,
on contracts that included pay and and the governor negotiated fair
health care concessions in exchange contracts with CSEA and PEF given
for avoiding layoffs. the state’s financial situation. The
governor’s determination that the
CSEA and PEF members have state government must tighten its
approved their respective contracts. belt will help put New York State on a
stable financial footing in future years.
Mandate Governor Cuomo started well on this, The state must provide for real
Relief for Local issuing Executive Order #6 appointing mandate if local governments and
Governments a Mandate Relief Redesign Team school districts are going to be able to
(MRRT) in early January to “look for live within the state’s newly-enacted
ways to reduce the costs of mandated property tax cap.
programs on schools and local
governments.” But the mandate relief measures that
were ultimately adopted as part of
The MRRT held 6 meetings the property tax cap legislation are
throughout the legislative session and woefully inadequate.
issued a preliminary report on March
1st. But the MRRT failed to issue a final The new 11-member Mandate Relief
report, and did not reach agreement Council, tasked with identifying and
on mandate relief measures. reviewing mandates that can be
eliminated or reformed, may provide
The property tax cap law (Chapter some relief in the future. But that is
97) included some mandate relief uncertain.
provisions that will save over $100
million, but much more must be Achieving real, sustainable mandate
done. relief for local governments and
school districts will be a major 2012
Under Executive Order No. 6, the priority for Unshackle Upstate.
MRRT must issue a final report to the
governor by March 31, 2012.
(cont. on next page)
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10. WHAT HAPPENED UU OPINION
Economic In late July, Governor Cuomo While it is too early to gauge whether
Development launched the Regional Economic the Regional Economic Development
Development Council initiative, which Council approach will be successful,
he says will “redesign the relationship it is important that the state has
between the state government established a process by which those
and businesses to stimulate closest to the communities in need
regional economic development can work together in setting priorities
and create jobs statewide.” Ten for the allocation of limited state
Regional Councils throughout the resources.
state are developing a plan for the
development of their respective
regions, and the state has committed
to work with each one to help them
carry out their plans for development
and to distribute state economic
development funding.
Natural Gas There were a number of bills that Unshackle Upstate believes that
Development would have banned or limited the hydraulic fracturing can be done
practice of using hydraulic fracturing safely, and that New York State must
to drill for natural gas. Most were be prepared to take full advantage
based on fear and misinformation, of this tremendous economic
rather than on science and a clear opportunity.
understanding of the practice and
its risks and benefits. None of these DEC should continue its science-
bills were enacted into law this based, comprehensive review
session. of the potential environmental
impacts of natural gas development,
The Department of Environmental and determine whether its draft
Conservation (DEC) recently issued regulations strike an appropriate
its draft regulations for high-volume balance between economic
hydraulic fracturing, and is now development and environmental
accepting public comments on them protection.
before any drilling permits can be
issued.
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11. LOOKING AHEAD
Unshackle Upstate believes that Gov. Cuomo is We look forward to continuing to help move New
committed to improving the environment for York State government in the right direction to
families and businesses throughout Upstate New create an economic environment that permits
York, and we are committed to support those private sector job creation and offers relief to
efforts. taxpayers.
We recognize that the problems facing Upstate Unshackle Upstate is looking for the following from
New York did not occur over night, and that they Albany:
cannot be solved in a single legislative session.
Another fiscally responsible budget Action from the SAGE Commission
We look forward to a state budget that is enacted We look forward to the SAGE Commission
on-time, that does not increase state spending, and submitting a wide-ranging and comprehensive
includes no new taxes, fees or borrowing. plan to consolidate state agencies, authorities and
commissions that have overlapping functions, and
Real mandate relief for local governments to provide a road map to ensure that the remaining
ones provide better services to the taxpayers.
Now that the property tax cap has passed, it is
essential to work with local governments and
Economic development plans from the Regional
schools on efforts to reduce costly state mandates.
Economic Development Councils
Relief from business mandates We have high expectations for what the Governor
has promised will be “a new operating model for
It is long overdue for the state to provide relief for
New York State government” that is intended to
business from unnecessary, burdensome and anti-
“stimulate economic development throughout the
competitive business mandates.
entire state, while improving the business climate
statewide.”
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12. Connect with
Unshackle Upstate
Visit our Website: www.unshackleupstate.com
Join the Unshackle Army: www.unshackleupstate.com/army
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Unshackle Upstate
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Phone: (585) 256-4625
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