Spitzer earns good early reviews from businesses

CNY Business Journal (1996+), Apr 13, 2007 by Tampone, Kevin

SYRACURE - Kenneth Adams had been on the job for about a week when he found himself in a meeting with newly elected Gov. Eliot Spitzer and Denis Hughes, president of the New York State AFL-CIO.

At that meeting, the men began laying the foundation for workers'-compensation reform legislation long sought by the state's business leaders.

"[Spitzer] hadn't even been inaugurated yet," says Adams, who became president and CEO of The Business Council of New York State on Nov. 1. "That set the tone in a very important way. The governor has made a very public commitment to tackle some of those very fundamental issues we have in doing business in New York State."

Adams and local Central New York business leaders say they are generally encouraged by Spitzer's first few months in office and hopeful for what the remainder of his term will bring. Spitzer visited Syracuse on April 5 and spoke to about 1,400 people at the annual meeting of the Metropolitan Development Association of Syracuse and Central New York (MDA).

His talk focused on his term thus far. He said he wanted those present to know he viewed them as partners.

"We have turned a comer in how we spend money and how we deal with you as the business community," Spitzer said near the end of his speech, for which he received a standing ovation. "We will use [state] money sparingly and wisely and in order to get the best return for the economy."

Workers'-compensation reform was an important first step in the partnership Spitzer spoke of, Adams says.

The Legislature passed the reform bill in March. It will help reduce employers' workers'-comp costs by 10 percent to 15 percent in the next few years, according to the governor's office. It also increases benefits for injured workers for the first time in a decade.

The legislation achieved much of its savings - hundreds of millions of dollars, the governor says - by limiting the maximum number of years that permanently, partially disabled claimants can receive cash benefits. The limits will be determined by degree of disability.

Adams says he, Spitzer, Hughes, and leaders from the state Senate and Assembly worked closely to produce reform that was acceptable for all parties.

Going forward

If the state follows a similar model in the future, there's a good chance progress can be made on other crucial business issues such as energy costs, health-insurance aid for small companies, and further efforts to limit Medicaid spending, Adams adds.

This year's state budget calls for $1 billion in Medicaid cuts - limiting the total increase in spending on the program to 1 percent, down from the 8-percent average hike of recent years.

"[Spitzer is] aggressively addressing the issues that have plagued economic growth for so long," says Irwin Davis, president and CEO of the MDA. "These are things that we have been hearing about forever and in 100 days he has brought consensus between the executive branch and the Legislature and has made some major strides and that's a positive."

The progress is particularly important to economic-development efforts, Davis says. If companies outside the area see New York is addressing some of the problems businesses face here, recruiting them could become much easier.

Room for improvement

That's not to say Spitzer's initial efforts have been without flaws for the business community.

David Duerr, executive vice president of the Greater Syracuse Chamber of Commerce, says the overall budget still grew too rapidly this year. The $120.9 billion plan will increase spending 7.3 percent.

The budget does reduce the corporate tax rate from 7.5 percent to 7.1 percent and cuts the tax on manufacturing income to 6.5 percent from 7.5 percent. It also reduces the corporate alternative minimum tax from 2.5 percent to 1.5 percent.

The moves will help save New York companies $150 million, according to the governor's office. Other changes, however, will close what Spitzer has described as "loopholes" that allowed companies to shield income from state taxes.

The changes will generate about $450 million in new revenue for the state. That means a net tax increase for businesses, Duerr says.

The governor's public support has also declined, according to at least one poll. A March 26 poll by Siena College's Siena Research Institute found 47 percent of voters think he's doing an excellent or good job, down from 58 percent in February.

Also, 39 percent think he's doing a fair or poor job, up from 24 percent.

Still, business people have plenty of reason to be optimistic, Duerr says.

"I think the results he's been able to obtain speak for themselves," he says. "Businesspeople like results. Certainly when you compare it to the previous eight to 10 years, he has accomplished quite a bit in 90 to 100 days."