Statement from Unshackle Upstate Regarding Gov. Paterson's Budget

By presenting his executive budget one month early, Governor Paterson is again demonstrating the strong leadership he has shown throughout this state budget crisis. Unshackle Upstate commends the Governor, Senate and Assembly for their efforts to make difficult spending reductions during the past few months, and urges them not to lose that momentum amidst the temptation to raise taxes and fees. New York State already has the worst tax climate in the country, and now is not the time to pile on and make the Empire State an even more expensive place to live and run a business.

This much is fact: Our state government's fiscal problems didn't begin with the stock market's contraction earlier this year. What led us to this challenge is decades of imprudent spending, coupled with costly local government mandates layered on by the elected officials in Albany. The budgets of some New York programs are more than twice the size of those in Texas or California - states with larger populations. Wall Street cannot be blamed for that.

What New York needs is reform that will result in long-term, sustainable results, and Unshackle Upstate urges our elected leaders in Albany to put all reform options on the table. While new or increased fees and taxes may help close a current gap, they will not cure the state's spending addiction. Furthermore, they could have serious negative implications for the future by adding to the already heavy cost burden on New York residents and business owners.

Reform is not to be confused with imprudent disinvestment. New York's economic development incentive programs exist to offset the sting of one of the nation's most unattractive business climates. Ideally, if tax and regulatory reform were enacted, New York wouldn't need such programs.

Efforts by leaders in Albany to eliminate strategic investments Upstate or diminish incentives should be done with caution. The state must not change the rules of incentive deals that have previously been negotiated with businesses. Doing so will send the dangerous and potentially costly message to the private sector worldwide that New York doesn't honor its economic development deals. Furthermore, any cuts to investments that are made must be balanced with the reform of cost-raising laws such as 240/241, Taylor and Wicks. Our leaders must seriously consider review of both Medicaid and education spending as well as implementing a property tax cap as ways to provide long-lasting relief to state taxpayers. And we caution against adopting a 'one-size-fits-all' approach given the diverse demographics of our state. For instance, legislators should consider the differences between downstate and upstate health care centers, especially in rural areas, when evaluating reductions in Medicaid reimbursement rates.

Upstate has long felt the impact of living in the state with the nation's second highest cost-of-doing-business. Employers Upstate closed up shop and moved away long before this recession. As lawmakers work on the state budget, it is absolutely critical they do not add more burdens to employers - whether through taxes, fees, wage mandates or regulations. Real reform must also streamline the way state agencies operate - from NYPA and ESD to DEC and DOL - which is essential to creating a more business-friendly state.

Finally, Unshackle Upstate believes it is imperative that our state leaders not view federal funding or cost-shifting as the solution to New York's problems. Use policy, not just projects, as economic stimulus.

Above all, we call on them to recognize that the opportunity for real reform is now, and that we - the citizens and voters of Upstate - are imploring them to act.

The Unshackle Upstate coalition represents more than 45,000 employers and more than 1 million workers in every region of Upstate. For more information, visit www.unshackleupstate.com.