There is an economic development tool available to New York that fits seemingly well with the Governor’s vision of creating the type of public-private partnerships as outlined in his budget plan. This tool is Tax Incremental Financing (TIF).

TIF is a financing tool that empowers municipalities to issue revenue bonds, which are then repaid by the increased value of the projects they fund. This requires no increase in taxes and importantly – relies on no hand-outs from the State. The bonds issued are known as “TIF bonds.”

New York law restricts the use of TIF, save for a limited number of allowable economic development purposes. TIF law encompasses the development and/or redevelopment of blighted areas (broadly defined); but is focused on development that could not be done by private sector investment alone – creating a recipe for the type of public-private partnerships that many Upstate communities need. Because of the restrictions for use of TIF, it also creates opportunities for municipalities and investors to work together to identify a plan that best fits their community.

TIF has been used quite successfully in U.S. cities with a similar make-up of areas like Binghamton, Buffalo and Rochester – i.e. cities that once had a large industrial presence that must now reinvent themselves as part of the “new economy.”  TIF does not require cash-strapped local governments to use their general revenues to pay back TIF bonds; and encourages private sector development by allowing the marketplace to determine the value of planned projects. Thus offering a preview of what the value of a project may be. Most importantly, it allows local governments and private investors to work collaboratively to put forward redevelopment plans that make sense to their communities.

New York is one of forty-nine states that have TIF legislation on the books, but because of a glaring defect in the law, it is widely underused.  As it is currently written, TIF does not allow incremental school property tax revenues in school districts that benefit from increased revenues of redevelopment projects to be used to pay back TIF bonds. Making these funds available would go a long way to spur private development in many communities.

For several years, there has been legislation to correct this flaw in TIF that has stalled in the Assembly. The simple fix is to enable a voluntary opt-in for school districts located where a TIF redevelopment project is planned.   Last year, the Senate passed TIF reform legislation and language correcting TIF was included in an omnibus bill that included the tax cap and rent regulations. Yet, as we begin 2012, this simple, yet critical fix, still has not been made.

Unshackle Upstate has outlined TIF reform as a “must-do” in 2012. UU is not alone in its support for TIF reform. Many other business and trade organizations, local governments and school districts have expressed their strong support to begin using TIF in their communities. Language regarding TIF reform has also been outlined in many of the state’s regional economic development council plans as an important strategy for growth.

Let’s finally get TIF done this year. Let’s give our local governments an important tool to attract new investment and get the Upstate economy moving.

I fully appreciate the efforts made by DEC Commissioner Martens and his staff to understand the science of hydraulic fracturing and the potential impact drilling will have on our natural environment. This is certainly not an enviable job.  I remain confident that New York will provide the model for effective regulations with regard to drilling.

After four years of research, discussion and debate, New York stands at a crossroads and it is incumbent on the DEC to direct the path New York will take. While I recognize that it will take months for sufficient review of the comments, the process must be expedient and the DEC must forge a path for New York in 2012.

In his State of the State, Governor Cuomo spoke of New York as a leader in tourism, economic development and good government. Why not New York as a leader in natural gas production? What role does New York want to play in the bigger energy picture?

The top five U.S. states in total energy production (2009) are: Texas, Wyoming, Louisiana, West Virginia and Kentucky. (Pennsylvania is ranked 6^th).  New York is ranked 21^st, despite sitting on the nation’s largest gas reserves with the Marcellus and Utica Shale plays.  In natural gas production, New York drops down to 22nd. The question is, where do we see New York in this energy picture?  Among all the rankings, how important is this one?

In 2009, shale gas made up 14% of total U.S. natural gas supply and it is estimated that production will constitute 46% of U.S. gas supply by 2035. Again, where does New York see itself in this scenario? Will we capitalize on or continue to delay this opportunity?

Four years into the discussion and I remain concerned that we are no further along than when we began.  Special interests continue to galvanize the media, while painting the gas industry as the evil empire. I ask you, what other industrial process will be regulated with such scrutiny?  New York can do this right and needs to do it now. How long will we deny the abundance of energy just under our feet?

For example, Bradford County, PA, a predominantly rural region in the northern tier,  is now the number one job creating county in Pennsylvania. New shopping centers are being built along with new hotels. Coffee shops and diners are bustling, freight rail and air service is surging  and schools and non-profit agencies are receiving unsubsidized funding that is able to go back into local communities. Farmers, who a few years ago were not sure how to stay afloat, are now investing in new livestock and new equipment. Bradford County is also enjoying nearly 0% unemployment – a far cry from what is happening due north.  Just recently at a seminar in Binghamton,  a Bradford County official said that if New York doesn’t want the drills, “they be happy to keep them in PA.”   New York can simply not afford to let that happen.

As New York goes through yet another public comment period, special interests and misinformation continue to dominate the conversation regarding drilling.  Opponents scramble to find evidence that drilling is unsafe while Pennsylvania, Ohio and West Virginia forge ahead – balancing the interests of environmental protection with economic opportunity.

The Governor and the DEC have put forth a rational approach to drilling that protects water resources and provides sound regulations to minimize the impacts of natural gas drilling. State officials are ready to move forward and it is time that they do. After nearly four years of development, the DEC has put forth a plan with detailed rules to promote transparency, protect air and water and ensure the well-being of local communities.

It is estimated that natural gas development in New York will spur $11.4 billion in economic output and create nearly 20,000 jobs in the southern tier and western regions of the state. These are areas, which combined, lost 48,000 payroll jobs between 2000-2010. The jobs created will be high-skilled, high-wage and local jobs. This comes at a time when New York desperately needs to act as a job stimulator and not an inhibitor.

In the year ahead, New York is facing nearly a $2.5 billion budget deficit and lower than anticipated sales tax revenue that will further add to the state’s budget woes. To this point, Governor Cuomo has demonstrated a sound understanding of what is needed to make New York competitive and we need to support his pragmatic approach to drilling. We have made significant progress this year to right-size the state’s economy, but we cannot continue to impede the economic opportunity that drilling provides. It is time to move New York forward.

(Photo Credit - Brett Carlsen, New York Times)

Synergy had been doing well in the Binghamton area. In 2008, the company expanded due to demand growth and “demonstrated superior sales and customer support,” according to Founder and CEO Corey Conklin. There was every reason to be positive about the company’s growth. Lee changed things for many businesses, as we are seeing down here in the Southern Tier.

Synergy representatives cited the costs to relocate to higher ground and other financial considerations in their decision to close. The financial considerations included taxes, energy costs, workers’ compensation and unemployment insurance costs. Quite simply – all things being equal – New York is just more expensive than other states.

This closure will result in the loss of 200 local jobs – yet another hit to the Southern Tier.  However, I respect the decisions that businesses have to make to remain operational.  Sadly enough, when you take the flood out of the equation you get a clear picture of what businesses are constantly challenged by – the cost of doing business in New York.

If New York continues to cost more than other states, it will constantly be at risk of losing business – whatever the catalyst may be.  I am confident that the Southern Tier will recover from the devastation of Tropical Storm Lee and our organization will continue to be a positive voice for business in Binghamton.  Stories like Synergy Solutions should provide a clear but painful reminder to Albany, that the best way to keep New York open for business is to simply cost less to be here.

• A $136 billion dollar budget (they actually keep getting higher!)
• A 7.6% increase in spending;
• $5 million in back wages owed to members of the Legislature (this doesn’t include $171 per diem pay to cover expenses);
• A $1.4 billion cut in aid to schools (translation: an increase in property taxes because school districts still have to pay for rising personnel costs ).
• An additional $419 per person increase in state taxes (per capita)  since 2009; according to a recent US News report. This is higher than any other state – including California.  Another dubious distinction for New York.

I bet you are wondering why you still live in New York? You’re not alone. But resist the temptation to jump ship for one reason and one reason only: because this is the year to make a bold statement that enough really is enough. The leadership in Albany had its chance to give us something different this year - but missed the mark again.  

Join Unshackle Upstate’s efforts to unite New Yorkers for one common goal: Judgment Day.  Go to UPAC  – our statewide political action committee. Make a donation. Make a difference.

Like New York, the Garden State also suffers from extremely high property taxes. Governor Christie noted that since 2001, spending at the local levels in New Jersey rose 69 percent (hmm, sounds familiar). Had a hard property tax cap been in place since that time, the average New Jersey family’s property tax bill would be more than $2,000 lower than the current average of approximately $7,200.

Christie has been advocating for a property tax cap at 2.5 percent with very little exemptions.  Earlier this year, Unshackle Upstate put forth a plan that would do the same for New York. Both plans model Massachusetts Prop 2.5,  which has the distinction of bringing Massachusetts as the state with the 3rd highest property taxes nationally – to the 33rd.

The New Jersey legislature offered a plan that would cap property taxes at 2.9 percent and included a list of exemptions. Last week, Christie said he would not sign a 2.9 percent “Swiss cheese” cap bill the Legislature sent him last week because it had “too many holes in it” (referring to the fourteen exemptions the bill included). However, given the importance of the issue, Christie offered a compromise, bringing New Jersey one step closer to real property tax relief.

Christie offered a conditional veto modifying the Senate bill to include a cap on future property taxes at 2 percent while including four exemptions for debt service, pension and health care costs and states of emergency. A key element of this plan, like Unshackle Upstate’s, relies on participation of the taxpayer in the process. Voters will  have to approve an override of the cap with a majority vote.

Should both houses approve the governor’s modifications, New Jersey will  have accomplished what will New York seemingly refuses to do – offer real reform to its taxpayers. Christie lauded the bipartisan effort to take “decisive action on a decades long problem that has become a full blown crisis to the people of our state.”

Meanwhile, in New York, the Senate and Assembly budget plan rejected the inclusion of a property tax cap – Governor Paterson’s proposal included a cap on local governments and school districts at 4 percent. Instead, they have put forth a plan to offer property tax “relief” in the form of rebate checks. Bear in mind – they will be increasing taxes and fees by about $1 billion (on top of $8 billion last year) to pay for the checks to go back to the taxpayer – doesn’t make much sense, does it?  But this is what we have grown accustomed to, and this is what we need to change this year.

So while New Jersey moves forward in a bi-partisan effort to offer much needed tax relief to their residents, New York continues politics as usual. The opportunity for real relief for New Yorkers is there, but the political will is still missing. There is a saying, “to get something done right, do it yourself.” The Unshackle Army will send a message this year – we will change Albany ourselves. The  tool that we will use to do this is our vote in November.

Send a message that New Yorkers deserve real property tax relief - now.

Because it seems that despite the well-intentioned efforts of some members of the Legislature work toward these goals, they’re words continue to fall on deaf ears. For most, the propensity toward expanding the size of government, increasing the power of labor unions and stymieing the growth of business is still to strong.  Inevitably, this leads to the perception that the status quo is okay in Albany. And often times, perception is reality.

Take for example some of the bills that are being considered right now. The service worker, utility worker and IDA bill all will impose prevailing wage mandates on private industry. This will result in hidden taxes and higher costs to taxpayers, but also sends a message that the costs of doing business in New York is getting higher.

There is also the “abusive workplace” bill, which if enacted, would establish a new civil cause of action for any employee in New York to claim that they have been subject to an abusive workplace environment. If passed, New York would be the first state to enact such a law.

Of great concern to us in the southern tier, are the number of bills aimed at delaying or further hindering natural gas exploration in the Marcellus Shale. The regulations imposed by the DEC are perhaps the most stringent in the nation and will continue to be, even as gas drilling becomes a reality. The sGEIS that will be released this fall can put us one step closer toward realizing the economic potential that exists with safe gas drilling.  Many energy companies have stated that they will comply with whatever regulations the DEC puts forth. Yet there still exists legislation (A.10490 Englebright) that will delay natural gas drilling, perhaps indefinitely.

With such little time left, why not have a real dialogue on instituting a real property tax cap with mandate relief or a state spending cap? Put forth bills that lower energy costs, reduce the hold of labor unions and provide tools for businesses to grow and expand.

It is imperative that the Unshackle Army continue to demand that their legislators hear what they have been saying. Because if they don’t hear us now, we will make sure that they do in November.

For years,  and across party lines, leaders have done their best to mask the growing structural imbalance by increasing taxes or borrowing to cover their bills – basically muddling through from one budget to the next. The result?  A cash-strapped state with a shrinking private sector and a public sector that does not want to share in the pain.

So what do you do when you can’t throw money (i.e. tax and spend) at the problem anymore?

Property taxes are 60% higher than the national average, last year’s budget added $8 billion in new taxes and fees and New Yorkers pay the third highest in the nation in electricity prices. In 2009, state and local governments in New York raised taxes on electricity by more than 15%, during the worst economic crisis of our generation.  In addition to this, a new proposal by the Governor looks to cut business tax credits by 50% for the next three years.  These are the very credits that enable businesses to hire new employees, expand their operations and stay comeptitive in New York.  Businesses and taxpayers have shouldered more than their share of pain.

On the flip side, Unshackle Upstate found that salaries for state and local government employees are 10% higher than the private sector and that New York leads the nation in per-capita contributions for public-employee retirement. Benefits for public employees are 68% higher than those received by private-sector employees.

Public employee unions have said no to wage-freezes, payroll lags and now threaten to sue over furloughs, forcing the state to spend money it doesn’t have on lawsuits.

I was asked recently, what is the state to do when every cut gets opposed by a special interest group? My answer is to review the $12 billion in recommended state savings by Unshackle Upstate. These are pragmatic, realistic cuts that can be made to close the current budget gap.  These are also measures that will have long-term impacts on structurally reforming state government.

Let’s hope that the inactivity on the budget is due to the realization that Albany cannot spend its way out of this fiscal crisis. Unshackle Upstate has maintained that a good, late budget is better than an abysmal on-time budget.

Across the state, members of the Unshackle Army have responded loudly and clearly that it is time for a new way of governing – and we will accept nothing less.

In many states, we are seeing these ideas put into action.  For example, in Connecticut, state workers have agreed to a one-year wage freeze, seven unpaid furlough days and higher employee health insurance contributions. New Jersey civil service workers have agreed to ten unpaid furlough days and a deferral of a cost of living increase; and state police officers and corrections employees have also opted for a one-year wage freeze.

These negotiations were made to avoid layoffs, concluding that it was better for the whole to sacrifice to save the few. Unfortunately, there is no such progress being made here in New York.

The Civil Service Employees Association (CSEA), the state’s leading union, has filed a grievance with the Governor’s Office of Employee Relations over Governor Paterson’s move to delay raises for about 150,000 employees. A statement made by CSEA indicated that the union “has every expectation of prevailing against the governor’s arbitrary and unilateral action.” I don’t see much room for negotiation in that statement.  

Public employees who are vulnerable to the proposed layoffs may want to ask their union leadership what is being done to protect their job.  It seems a legitimate question when it has been demonstrated that a wage freeze could prevent large-scale lay-offs that would put more New Yorkers out of work.

Binghamton University professor Patrick M. Regan, recently ran an op-ed urging fellow union members to back a wage freeze. Regan assessed the situation quite accurately, stating that “it seems we want the fiscal crisis to end, but we do not want to bear any of the pain associated in that score.”

This is not a referendum on teachers or public employees. We in the private sector recognize how fortunate we are to live in a state with quality educators and public employees. This is why we choose to live in New York. The reality is that this is a system that will collapse of its own weight. As the private sector continues to shrink, there simply is not enough revenue to support the continued rise of  wages and benefits for public employees. And it is unrealistic to assume the next generation of New Yorkers will be able to foot the bill.  What will happen when our young teachers, police officers and other qualified public employees are the next to leave New York, rather than be the first to go when times get tough?

It may be incumbent upon the public employees themselves to lead the charge for change right now. If they do the Unshackle Army will be standing beside them.

The proposal offers some sound ideas to lessen the property tax burden by enabling school districts to enter into shared service contracts with greater flexibility thus allowing  BOCES to review opportunities for regional cost-containment; establishes a unified data collection system; and prohibits any new mandates, once school budgets are passed. These could prove to be important steps in allowing schools to become more innovative and less dependent upon the dysfunction of the current mode of operation in Albany.

But while these ideas are practical and can begin to bring about the relief taxpayers need, my concern is that they do not go far enough.

When personnel costs account for seventy percent of schools’ budgets, how can we continue to ignore the source of the problem?  These costs are protected by mandates unique to New York; the Taylor Law and the Triborough Amendment. As long as these are on the table, taxpayers are guaranteed that personnel costs will continue to increase and that those costs will continue to be passed on to them.  

As Unshackle Upstate referenced in “New York’s Double Standard,” our school districts exceed the national average for employer health contributions and we lead the nation in per capita contributions to retirement costs.  As stated in their report, if schools and local governments simply matched the national average for health care contributions, the projected savings would be measured in the hundreds of millions of dollars each year.   Mandate relief must include vital reforms to all of the costs associated with high property taxes.

Since its inception, Unshackle Upstate has demanded essentially nothing more than that our leaders make decisions that make sense. It is really quite simple. The Unshackle Army has been sounding off on the need to fix a problem at its source or face the continuing exodus out of New York.

It is obvious that the chronic property tax fatigue has taken its toll. People that have lived and worked in New York for their entire life are choosing to leave and young people have no incentive to stay. It is time to stop being unwanted guests in our own state.