Business bills stall as regime change in N.Y. looms

Long Island Business News, Aug 4, 2006 by Jeremy Harrell

The political lineup in Albany appears headed for a big change in January, and the looming leadership shift helped stall three of the state's biggest economic development initiatives.

I think a lot of people are waiting to see how the new governor will feel on the issues, said Mitchell Pally, vice president of government affairs for the Long Island Association. On some of these issues, the Legislature went as far as it could without intruding on or getting ahead of the new governor.

The identity of the new governor won't be determined until November, but polling results consistently place Attorney General Eliot Spitzer well ahead of his primary and general election challengers. Spitzer, a Democrat, would replace Gov. George Pataki and thereby upset the Republican Party's 12-year control of the executive branch.

With Spitzer would come a new party alignment and a slightly different balance of power, assuming that the state Senate remains in GOP hands and the Assembly stays with a Democrat majority after November.

Whoever is the next governor, he will be confronted by three key economic policy decisions: whether to make big-box retailers pay more for employee health care; whether to make industrial development agencies play by stricter rules; and whether the state should reform a workers' compensation system that hasn't been updated in 14 years.

The Island's top Republican and the Senate's deputy majority leader, Dean Skelos, R-Rockville Centre, acknowledged that Albany is in a transition period right now, even though he considered the session that ended in June to be productive. Once the pieces are in place next year, work will resume.

You get to a certain point where you say, 'We're going to see who is in the leadership,' Skelos said. That's reality.

Regardless of who the next governor is, however, Skelos said the Senate will never approve a labor-backed bill requiring big-box retailers to cover a greater share of health-care costs. He called the bill approved by the Assembly dead in the Senate, and instead pointed to a proposal awaiting Pataki's signature that would require citizens who rely on public-health programs to identify their employers.

This would be a way of gathering information to find out if in fact companies are off-loading into government-subsidized programs, Skelos said.

Union supporters insist the proposal isn't dead, however. Kris LaGrange, a spokesman for the Long Island Federation of Labor, predicted legislators would look out for the people, not the corporations and businesses that employ and exploit the people.

The workers' compensation proposal faces a greater chance of approval in the Senate, although its fate in the Assembly is much less rosy, said Matthew McGuire, communications director for the Business Council of New York, the biggest advocate for the measure. The cost of workers' comp coverage has gone up steadily while benefits to workers haven't increased since 1992, and the Business Council believes the costs have risen because New York doesn't limit damage awards in about 10 percent of workers' comp claims.

The case for workers' comp reform has been clear and compelling for years, McGuire said, adding it's possible the Assembly dug in awaiting Spitzer's arrival. It's mystifying that nothing's being done.

State Sen. Kenneth LaValle, R-Port Jefferson, said the Legislature might take up the workers' comp measure in September, when lawmakers are scheduled to vote on an appointee to the state Court of Appeals. Lawmakers are also slated to return to Albany in December to take up unfinished business.

I would have bet the farm we would have had resolution on that this year, LaValle said of the most recent session.

Meanwhile, the Assembly is expected to lead the charge on instituting new requirements for IDAs, the quasi-governmental entities that offer tax-free bonding and incentive packages to attract, retain and boost companies.

The chairman of the Assembly's Local Government Committee, Robert Sweeney, D-Lindenhurst, promised that he would revive his stalled IDA proposal next year. Among several provisions, the bill would require companies to return money if they don't meet job-creation goals, and it would mandate that businesses abide by community- benefit agreements that spell out hiring and pay guidelines.

What we're looking for is accountability and transparency, Sweeney said. They should produce promised results or explain whey they didn't.

IDAs leaders object to the bill.

I understand the impetus for it, because there have been abuses, particularly upstate. However, just about everything it asks for we are already doing, said Jim Morgo, Suffolk County's commissioner of economic development and workforce housing who also serves as chairman of Suffolk's IDA.

McGuire said he hoped Sweeney's bill, which has strong union backing, wouldn't get Spitzer's nod, if Spitzer turns out to be the next governor.

I don't think it's safe to assume that the next governor will embrace a dumb idea just because it's endorsed by powerful special interests that have historically been aligned with his political party, McGuire said.