Leaders debate economic outlook

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Both the leaders of the state Empire State Development and pro-business lobbying group Unshackle Upstate say the upstate economy is improving.

The difference is in the degree of improvement.

Vincent Esposito, deputy regional director of the state agency’s Finger Lakes region, and Brian Sampson, executive director of the Rochester Business Alliance’s lobbying group, spoke Wednesday before members of the NAIOP Upstate New York, a commercial real estate development association.

The discussion is especially timely as state legislators next week begin to see details of Gov. Andrew Cuomo’s 2014-15 budget.

Under Cuomo’s leadership, the state’s fiscal picture has “completely turned around,” Esposito said, citing favorable unemployment rates locally and statewide and noting 380,400 new jobs that have been added to the private sector.

“We still have a lot more to do to improve the economy, especially in upstate New York,” Esposito said.

Playing off the state’s “New York State is Open for Business” slogan, Sampson said the state is not open for business.

“We’re getting there,” Sampson said.

Touting initiatives highlighted in the governor’s recent State of the State address, Esposito said proposed business tax cuts, a two-year property tax freeze and reduced corporate tax rate as ways to bolster local economies. Upstate casinos — with the selecting of sites coming in the fall — also will have an impact.

To help families who pay a property tax rate greater than their ability to pay, the governor is also proposing a “circuit breaker” that ties the ability to pay taxes to income level.

Eliminating regulatory burdens on businesses also will lead to a better economy, and so the governor wants to create a joint commission to target the most effective way to do that, Esposito said.

“It’s one of those things that is easy to say but harder to do,” Esposito said.

Boosting tourism efforts has been a “game changer” for upstate New York, and $40 million spent on a new marketing campaign has resulted in $4 billion in tourism spending and 25,000 tourism jobs — twice the national average, Esposito said.

“This is big money,” Esposito said. “This is big business.”

Sampson said efforts will continue in lobbying for changes proposed in the group’s economic revitalization plan announced last year.

While it’s true what the governor says about unemployment, Sampson said, many areas of the state have pockets of high unemployment. Unshackle is proposing reductions in the state income tax for qualified families and state sales tax in those areas.

The group is also proposing to phase out the 9-A corporate franchise tax and 18a electricity surcharge, which is a “huge cost driver for property owners,” Sampson said.

Many of the governor’s proposals, however, pay lip service to the real problems facing businesses, Sampson said.

Approving hydraulic fracturing, the form of natural gas drilling also known as fracking, is perhaps the most controversial item on its agenda. The governor has delayed lifting a five-year moratorium on this “greatest economic development resource,” despite the economic lift drilling would have in the Southern Tier, Sampson said.

“It’s not about science,” Sampson said. “It’s about politics.”

The two also differ on another hot topic — mandates facing local governments

Although Esposito said the state has assumed more local government costs in recent years than at any other time in modern history through absorbing local Medicaid growth and pension relief, the governor is pushing for governments to consolidate to further reduce spending.

Governments who not only meet the 2 percent property tax cap but also demonstrate true spending reductions and movement toward consolidation will also see further reductions in property tax rates, Esposito said.

While supportive of the tax cap, Sampson said the tax freeze and circuit breaker are gimmicks and will enable legislators to “punt” on meaningful mandate relief and risk bankrupting municipalities and forcing school districts to cut meaningful programs.

“We need mandate relief,” Sampson said. “We will push for mandate relief.”