Gov. Andrew Cuomo’s agenda for the year calls for a renewed emphasis on job growth and economic development for upstate communities like Peekskill.
But some in the local business community remain skeptical and are worried that the burden of paying for some of these initiatives will fall on them.
Joan McDonald, the state’s commissioner of transportation, stopped by the Hudson Valley Gateway Chamber of Commerce in Peekskill Thursday to give a recap of the Gov. Andrew Cuomo’s state of the state address. Although the proposals outlined drew excitement, there were was some apprehension
“The proposals are great and, as many things that are generated at the state level, get dumped upon the municipalities at the local level,” Joe Lippolis, of River Towns Realty in Peekskill, asked during Thursday’s presentation. “I didn’t see anything in the presentation that shows we’re you are going to propose to get all this funding to do this.”
Lippolis point out that the brunt of the funding of education already falls on local property owners. He also wanted to know how the governor planned to offset the costs to business owners that will come with his plans to raise the minimum wage from $7.25 to $8.75 an hour.
McDonald said the raising the minimum wage will create dollars that go back into the community. She also said that it is impossible to look at any of the initiatives proposed by the governor on a stand alone basis.
“The governor is proposing raising the minimum wage, he also proposing major reforms to workers compensation and unemployment insurance, which will directly improve businesses in this state and their bottom line,” McDonald said.
Deb Milone, executive director of the Hudson Valley Gateway Chamber of Commerce, said the Business Council of New York State hasn’t been supportive of the minimum wage increases, partly because it’s going to cost the average small business owner an average of $3,000 more per worker.
Milone wanted to know how much if the costs saving from Cuomo’s reform of workers compensation and unemployment insurance will be enough to offset the increased costs employers will incur from a minimum wage increase.
McDonald pointed out that the minimum wage in Connecticut was raised in 2009, in the heat of the recession.
“There was a lot of public discourse about what it would do,” McDonald said. “It was overlaying a lot with what’s happening with healthcare and how that’s impacting small businesses and the results have shown that it has not negatively impacted the employment rate.”
Lou Giordano, owner of the Croton Auto Park, wanted to know about the governor’s plans for mandate relief.
Giordano said he employed 37 people at his business and has to deal with variety of costs ranging from workers compensation to the MTA tax. He gave examples of how his difficulties communicating with state agencies have hurt him in the past.
“It’s not a business friendly state,” Giordano said.
McDonald said the governor recognizes the perception that exists about the state not being business friendly. In response to that, she said Cuomo launched several initiatives, including the utilization of regional economic development councils, to help foster economic development.
McDonald also said Cuomo also recognizes the need for mandate relief and he formed a task force to look into the issue. She added that the governor is pushing for reforms in area such as unemployment and worker’s compensation insurance and that he also also pushed hard for Tier VI pension reform last year.
Mayor Mary Foster agreed with Giordano about the frustrations involved with dealing the state Department of Labor. Unlike businesses, Foster said that municipalities are responsible for the full costs of worker’s compensation and the unpredictability that exists makes it harder to plan out budgets from year to year.
“I think the big challenge is the disconnect between the governor’s goals and the frontline accountability of the people in those departments who deliver those services and a lack of understanding of what the governor is trying to achieve,” Foster said. “I believe most employers, whether it’s a business or a municipality are treated right of the gate as if they’re wrong.”
But Foster said she was excited to hear about Cuomo’s plans for education and employment centers.
Foster also had questions regarding Cuomo’s plan to building three casinos in upstate New York. Proceeds from the casinos are supposed to be split 90 percent for education and 10 percent for property tax relief.
“Are the dollars that are being earmarked for education coming out of gaming...are those incremental dollars or replacement dollars?” Foster asked. “I think that’s what happened with Lotto. The money goes to education, but they replaced other funds that went elsewhere...and it’s not clear whether, from an educational perspective, if it’s going to primary and secondary education or whether it’s going toward post secondary education.”
Joan Sirefman, and independent Agent for Aflac and Peekskill resident, wondered about Gov. Cuomo’s plans for Indian Point .
“From what I understand, he’s never actually visited the site,” Sirefman said. "Do you know if that's ever on his frame of mind, to see what’s going on down there and how needed it is for the community?”
Foster said the uncertainty surrounding Indian Point presents a challenge to the local community.
"When you are trying to attract businesses and they don't know what's going to happen with utility rates, you deal with a local community and it's challenges with a school district budget and they don't know whether on of their largest taxpayers is still going to be there…that level of uncertainty is a little bit unnerving," Foster said.
McDonald said she was unable to answer Sirefman's question, but she did point to the Moreland Commission and the recommendations it gave on Monday.
"While a big focus was on LIPA and the situation after Sandy, many of those recommendations, which are still being reviewed, affect utilities across the state," McDonald said. "So there is an acknowledgement and an understanding that the utility issues are a lightning rod and that they affect every homeowner and every business."