Mon July 16, 2012
Is New York Really "Open for Business"?
Governor Cuomo is running ads proclaiming New York’s business friendliness, but a recent set of rankings finds the state dead last in that category. But it seems the truth lies somewhere in between.
The ads, commissioned by Governor Cuomo’s economic development agency, feature New York business success stories, including the rapid growth of the Greek yogurt industry in the Mohawk Valley and Central New York.
Other ads focus on the Nano tech center in Albany, Smith electric vehicles of the Bronx and BAE systems in the Southern Tier, which struggled to recover after from severe flooding from last year’s hurricanes.
The ads are narrated by Robert DeNiro and feature music by Jay- Z, and Alicia Keyes- all New Yorkers.
Governor Cuomo says the state should have been running promotional campaigns all along, just to keep even with other states, and blames the oversight on the Albany’s past dysfunction.
The governor says the ads address the perception that New York is unfriendly to business “head on”.
“We’re not hiding that New York has had a reputation for being anti- business or problematic for businesses,” said Cuomo at the time of the release of the ads in late June. “We’re saying we get it, we heard it, we’re different, we’ve changed.”
And it seems the state has a ways to go to convince others that New York is now, as the governor likes to say, “open for business”.
The cable business channel CNBC ranked New York 50th out of the 50 states for business friendliness, due to what they said was its onerous business regulations. The state rated 34th in having an overall hospitable climate toward business.
The cable channel did score the state number one in technology and education, based in part on the Nano tech innovations, and New York is the home of many of the nation’s top universities.
Austin Shafran, the spokesman for the state's economic development agency, the Empire State Development Corporation cites other rankings that he says are more relevant. He says a recent US Chamber report shows New York rose to tenth place in a national study on states' economic performance, a study that he says relied on data and is based on peer reviewable research.
"New York jumped eleven spots in the recent US chamber of commerce report that actually took into account the transformative economic reforms and achievements the governor has put into place over the past 18 months," said Shafran.
Brian Sampson, with the pro- business group Unshackle Upstate, admits that obstacles for business still exists, with the state’s high taxes and higher business and living expenses. But he says there are a number of things that the Governor and the legislature have done right, including passing a 2% property tax cap in 2011.
“New York is much better than it was a couple of years ago,” said Sampson. “I think some of the state agencies are a little bit easier to work with.”
But he says the state’s numerous regulations, particularly environmental and labor rules, are a drawback, and he says they drive business out of the state. Sampson wishes that politicians would focus on rolling back regulations when they talk about economic development, instead of focusing so much on giving out grants.
“It’s much easier to have a headline that says say XYZ company is creating 50 jobs in New York State, and the Senator and Assemblymember can stand there and be a part of the photo op,” said Sampson, who says it can be “just as much of an economic development success story”, when companies agree to stay in the state because regulations are eased.
Sampson expects opposition from environmental groups and labor unions if regulations and challenged. Governor Cuomo has appointed a commission to look at whether there’s too much government red tape. It will report back at the end of the year.
Sampson is also concerned about a proposal, that Cuomo has not rejected, that would raise the tolls on truck traffic on the Thruway by 45%, which he says will put the trucking industry “at a competitive disadvantage”.
Heather Briccetti, the head of the state’s Business Council, says she thinks a key positive change has been the approach to the state’s budget. Cuomo and lawmakers cut over $10 billion dollars in the past two years, and she says has resulted in some fiscal stability.
“Two consecutive years of a budget with no new taxes, very little additional state spending, said Briccetti. “It sends a strong message to the business community that we’re not going to go back to the same old cycle.”
Briccetti says she disagrees with the state’s continued income tax surcharge on millionaires, which impacts small businesses who pay their business taxes through a section of the income tax. But she says at least it was settled last December, so companies could prepare.
Briccetti admits when it comes to marketing a state for business growth, perception matters, and she says to that end, the new television ads will help.