Speech on Suozzi's Economic Renewal Plan for Upstate New York

Speech on Suozzi's Economic Renewal Plan for Upstate New York

"The downtown is dying. The factories are closed and the properties are polluted and abandoned. My children can't find good jobs here. I love this place—there's so much history—I'll try to stick it out. But the politicians have been making promises for years, and nothing has changed."

Rochester 2006? Actually, these are things I heard from my friends and neighbors when I ran for mayor of my hometown—Glen Cove, New York—in 1993.

The experts had given up on Glen Cove. They said the problems were too complicated. They looked at the waterfront and saw a polluted industrial wasteland, a bureaucratic tangle that made progress seem impossible.

They looked at our downtown, which had had the life sucked out of it by the competing malls and strip malls, and they saw no way to spur investment in the depressed area.

Beginning to sound like what the experts are saying about your hometown, doesn't it?

I'm here today to talk about what will be necessary to revive the economy in Rochester and throughout the upstate region.

When we talk about the economy, we're really talking about jobs: jobs with health insurance, jobs that pay enough so that people can live the American dream, the dream of owning a home, educating your children, and retiring one day in security.

To create those jobs, we need a little vision and a lot of re-vision.

Vision.

We need a Governor who has the executive experience to bring together the diverse stakeholders in each region to develop a locally-inspired vision of what each community could be if all the existing federal, state, local, and private resources were committed towards that common goal.

Re-vision.

We need a Governor with the independence to make the tough decisions to stand up to powerful political interests and make the revisions to the State laws that are hurting our economy.

We need to get real about why we cannot seem to get the upstate economy moving again. The Democrats want to blame the Republicans, the Republicans want to blame the Democrats, and Eliot Spitzer wants to blame Wall Street.

This politics-as-usual blame game hides the ugly truth: our government in Albany has failed for decades to address the prohibitive costs that have made New York the most hostile business climate in America. And we still have the same three men in a room, with the same lack of vision and the same resistance to re-vision.

Where have we gone wrong? How did the Empire State become the most hostile business climate in America?

Why won't employers locate their businesses here? And why is New York losing more of its residents to other states than the next two biggest losers combined?

I'll tell you one thing, it's not the absurd notion that many downstaters have that it's the weather. Upstate isn't struggling because it's cold here. There are neighboring communities—with the exact same climate as upstate New York—that aren't suffering in the way many of our cities are suffering.

No, it's not the climate. It's New York's economic climate.

We have created an environment in New York in which high taxes, high energy costs and antiquated laws are choking businesses at every turn, keeping jobs out of our state, and preventing economic renewal from occurring.

The number one reason people locate in a particular city is not because of family, friends, or weather. People go where the jobs are. And these days, the jobs ain't here.

So what do we do? What do we need?

For starters, we need to realize that it takes more than lofty speeches and a few feel-good buzzwords to solve our serious problems.

I support "knowledge creation," "innovation and commercialization," "access to capital" and "workforce development" as much as Eliot Spitzer does. I am also in favor of happy children, puppies and pie.

What we really need to do is stand up to the special interests that have prevented our elected officials from making the revisions to our State government that will make our economic climate competitive once again. And we need the locally-inspired visions of where we want to go.

Don't believe those that tell you we don't have any good ideas or we don't have any available resources. What we're lacking in New York is leadership.

Today, I will lay out four elements of my economic plan. My plan will implement those good ideas that have been ignored by the defenders of the status quo and make productive use of the resources available to us.

One, we need to build upon my previous policy proposals to reduce local taxes and fund local schools by a revision of State laws, which will further reduce the local property tax burden;

Two, we need further revision of the State laws that currently make doing business too expensive here in New York;

Three, we need to nurture local entrepreneurs to invest, succeed, and ultimately grow locally;

And, four, we need to develop shared visions for each community and thereby create a roadmap to effectively leverage existing programs towards defined common goals.

There are lessons I have learned as a chief executive over the past twelve years. We don't need more new programs, especially when the people proposing them aren't telling us how they're going to be paid for. We already have the highest local taxes in America and we cannot afford to raise our income taxes.

The first two elements of my plan—property tax reduction and reducing the cost of business—endorse steps previously proposed by Unshackle Upstate, a non-partisan coalition of experts, academics, and businesspeople united simply by their desire to revitalize the upstate economy.

Unshackle Upstate and their proposals have been applauded by columnists and editorial boards upstate, but they've been ignored by the insiders in Albany. They have been ignored because powerful interests such as trial lawyers, public employees, Medicaid profiteers and their lobbyists have threatened to withhold money and support from public officials who even dare talk of change. Eliot Spitzer has not even mentioned the need to adopt any of these much-needed reforms, because he is supported by every single one of these groups.

These reforms—these revisions—will set the stage for economic renewal.

We currently have the highest local taxes in America, and the first three reforms—revisions—will help reduce the cost of local government:

1. Grant waivers to localities to redesign Medicaid programs; 2. Reform the binding arbitration system for uniformed officers; 3. Reform Wicks Law;

New York is the most expensive place to do business in the continental United States, and the next three reforms—revisions—will help reduce the cost of doing business in New York:

4. Reform New York's workers compensation laws; 5. Reform the Scaffold Law; 6. Modify New York's brownfields law.

First, Medicaid reform.

Fighting Medicaid waste, fraud and abuse is a major component of my $5 Billion Taxpayers Savings Plan for New York, which provides the funding for the Property Tax Cut Plan I introduced last month. My property tax cut plan will deliver $120 million in property tax relief to Monroe County and another $60 million to schools in Rochester.

We should also, as Unshackle Upstate has proposed, seek waivers to local communities to redesign their own Medicaid programs, which will further reduce local property taxes. Once a federal waiver has been granted, the State waiver will be used to allow local governments to pursue many of the Medicaid reforms and smart government initiatives I've outlined in my $5 Billion Taxpayer Savings Plan.

Second, reform binding arbitration provisions.

Introduced in 1975 as a temporary measure, binding arbitration for uniformed officers has been renewed every two years since, and has led to some of the nation's highest pay rates, with pay increases exceeding inflation every year from 1994 to 2003.

The arbitration process begins when localities cannot negotiate an agreement with uniformed officers. But because binding arbitration has tended to favor the uniformed officers, they've had little incentive to bargain constructively.

We should implement a "last best offer" system, in which the arbitrator is required to choose one side's offer, which will forced both sides to make more reasonable offers and hedge towards a sensible middle ground.

We should also amend the statute so that arbitrators must give primary consideration to the ability of a locality to pay without new taxes or increased tax rates.

Third, Wicks Law.

The Wicks Law mandates that local municipalities must use four contractors—a general contractor, and one each for plumbing, heating, and electrical—on any public building project over $50,000. But that figure hasn't been adjusted for inflation in more than forty years!

I am pro-labor and have demonstrated my commitment to labor throughout my entire public service career. But we should significantly raise the $50,000 cap, and in so doing, also take into consideration regional cost factors.

Fourth, workers' compensation.

New York State has the second-highest workers' compensation cost in the nation: on a per-case basis, over 70 percent above the national average.

Exacerbating New York's comparative disadvantage is the fact that all five states bordering New York—New Jersey, Connecticut, Pennsylvania, Vermont, and Massachusetts—have a cap on compensation for workers with permanent partial disabilities.

We need to cap permanent partial disabilities payments at twelve years. Employees who can still work will receive disability payments for that entire twelve-year period and will continue to receive health benefits for the remainder of their life. By using objective medical guidelines to determine the degree of impairment, compensation costs will be decreased by 25 percent and workers will continue to receive above-average compensation.

In addition, to make sure that injured workers receive further enhanced compensation, we should as part of this reform raise to $600 the nearly twenty-year-old cap of $400 a week. [sentence corrected]

Fifth, Scaffold Law.

The so-called Scaffold Law, unique to New York, holds owners and contractors solely liable for "gravity-related" work-site injuries, without taking into consideration the possibility of comparative negligence.

Even by the most conservative estimates, the Scaffold Law doubles the cost of insurance for employers and greatly reduces its availability.

We should institute a comparative negligence standard for workers who fail to use required safety equipment or are injured due to impairment from drug or alcohol use.

Sixth, brownfields.

As it currently stands in New York, redevelopers of contaminated brownfield sites have significant liability, even after they've carried out a State-approved clean up.

In order to encourage more redevelopment of brownfield sites, the State law must be modified such that if a site developer completes a State-approved clean-up, and environmental standards change thereafter, that developer should not be liable for the expense of a second clean-up. Instead, the earlier owner of the property—the actual polluter—will be held responsible.

Each of these six steps involves establishing a re-vision—reforming State laws—some of which were passed to temper the excesses of robber baron capitalism, but all of which have since become sacred cows for special interest groups—at great cost not just to our taxpayers, but to the health of our economy.

Generations of politicians have stood by and let this happen, because they count on these special interest groups for endorsements and contributions and they have become so beholden to the agenda of the status quo that they are unable to do—or even say—the things we need to do and say to improve our State.

The third element of my economic development plan was suggested by one of Rochester's own, Tom Golisano.

Mr. Golisano makes the point that small businesses create the most jobs and the most new wealth. Small businesses are typically homegrown entrepreneurs, so it is not likely that a small business will relocate from Pennsylvania to Rochester, for example. The challenge is to educate more of our residents to become small-business owners and entrepreneurs, instead of relying on the historic ‘train-to-be-an-employee' model.

This will require a cultural change in our education model to encourage entrepreneurship. Further redirection of the many programs I will discuss in the fourth element of my plan towards small business will also provide the stimulus for this change.

The fourth element of my plan requires that we develop visions for each upstate community that more effectively leverage the multitude of existing federal, State and local programs.

There are currently hundreds of federal, state, and local programs, all designed to help revive the upstate economy. We certainly don't need a whole bunch of new programs; we need government that works better and costs less.

In addition to all the elected officials that have made proposals as to how to revive the upstate economy over the past two decades, we have the United States Department of Housing and Urban Development, the United States Department of Labor, the United States Department of Commerce, the United States Department of Agriculture, the Federal Transit Administration, the Federal Highway Administration, the Federal Railroad Administration, the Economic Development Administration, the Empire State Development Corporation, the New York State Canal Corporation, the New York State Department of Agriculture and Markets, the New York State Energy Research and Development Authority, the New York State Council on the Arts, the New York State Small Business Technology Investment Fund, the Governor's Office for Small Cities, the Governor's Office of Regulatory Reform, the New York State Office of Science, Technology and Academic Research, the New York State Thruway Authority, the New York Department of Environmental Conservation, the New York State Environment Facilities Corporation, the New York State University Construction Fund, the Entrepreneurial Assistance Program, the New York State Office of Real Property Services, the Rural Business Cooperative, the New York AgriDevelopment Corporation, the Northeast Organic Farming Association of New York, the Center for Advanced Ceramic Technology, the Center for Advanced Technology in Nano-materials and Nano-electronics, the Cattle Health Assurance Program, the New York State Quality Egg Assurance Program, and literally dozens more agencies that include mission statements focused on reviving the upstate economy.

The resources are there. What we need is a common vision of what we could accomplish if each of these resources is being directed in a common effort.

Accordingly, within my first hundred days as Governor, I will hold a series of economic summits—with at least one in Rochester, Buffalo, Syracuse, Albany, the Southern Tier, and the North Country—to empower local communities to take a lead role in determining their own destinies.

So in Rochester, for example, I will bring together all the stakeholders: businesses; community groups; elected officials; organized labor; environmentalists; the various federal and state agencies I mentioned previously—and some I haven't even found yet; experts and academics; and most important, the mayor and local officials. They will be asked to bring all the ideas and resources their programs have to offer.

The goal of these conferences will be to create a common vision for growth and renewal and to elicit specific commitments from each stakeholder as to what they can do to make that visioning plan a reality.

I will then appoint a State-funded economic development czar for each community, reporting directly to the Governor, and charged with working in concert with the local mayor to follow up on the commitments made and to help coordinate the implementation of the locally-developed vision plan.

The potential is there: we have the talent, we have the resources, and we have the motivation. What we need now is the strength and independence to stand up to the establishment insiders who got us into this mess, to make the revisions to the existing State law, and to implement our common vision.

Let me end with a few lessons I learned in my hometown of Glen Cove, New York.

When I became Mayor of Glen Cove in 1994, a polluted industrial site had become the unfortunate symbol of our city's decline.

Li Tungsten had once played an important role in our nation's war effort; it was also the largest employer in Glen Cove. Besides providing jobs for the city's residents, Li Tungsten made important contributions to the life of our community, giving money to the hospital and sponsoring little league teams. They provided the sense of economic stability and continuity that is so important to a small town.

By the time I became Mayor of Glen Cove in 1994, the Li Tungsten site was abandoned, dangerous and polluted. The jobs were gone. The support for the little league and the hospital was gone. It was a sad but appropriate symbol of Glen Cove's decline.

But in Glen Cove, we were past symbols. Just as calling upstate New York "Appalachia" won't solve this region's problems, the mere specter of Li Tungsten and similarly symbolic locations wasn't enough to restore Glen Cove to its earlier proud state. Metaphors weren't going to clean up the tons of toxic waste at the Li Tungsten site, and symbols weren't going to revitalize our downtown.

So in Glen Cove, we followed a simple formula.

Consensus, vision, and leadership.

We brought together all the stakeholders—no matter how difficult it seemed—and built consensus. We used that consensus to establish a vision—a vision for revitalizing downtown, a vision for cleaning up the waterfront and making it accessible. And once we had that vision, it required only leadership to get it fulfilled.

It's not easy bringing together a lot of diverse interests, getting them to sit down at the table together, and convince them to work together towards a common goal. It can't be done by simply issuing subpoenas and filing lawsuits.

But it can be done. We've proven that.

Our downtown, which had been boarded-up and filled with empty storefronts, received an award from the New York Conference of Mayors for Main Street Revitalization and now, "For Rent" signs don't stay up for too long.

And on our waterfront, where we were designated as a national model for brownfield cleanup, now on one side, the marinas and new restaurants in the area are thriving and on the other, the last truckload of contaminated waste was carted away last summer. Although we still have a ways to go, the progress we've made is remarkable.

In Glen Cove, it's taken years to implement the vision we laid out in the mid-1990s. But now we're doing the same thing in Nassau County: in a local community in which major economic development projects were used by previous administrations as cash cows for politically-connected insiders, now, after over 36 community-by-community town hall meetings, we have established a vision for our community's future and are bringing the resources from the public and private sector to make it a reality.

Like my hometown, New York's upstate towns and cities have rich histories, and residents are proud of and loyal to the place they call home. Now we must enhance the economic climate and get things moving in the right direction.

We need a little vision. And upstate, where broken promises from a broken government have kept jobs away, we need a little re-vision: a revision of our outdated laws and a re-vision of the future of upstate cities.

We're going to get New York back on track: we're going to reform the outdated laws that are stifling our businesses, we're going to make the reforms to reduce our property taxes and relieve a burden that's destroying our middle and working class, we're going to show the leadership it takes to stand up to the special interests that stand in the way of progress, and we're going to develop a vision for our future that will make our upstate cities strong and will make New York the Empire State once again. We can do it because we've done it, and we'll do it again.

http://tomsuozzi.com/announcements/sp-erpruny-052406/