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| MACNY Testimony at Joint Legislative Hearing on Governor 2011 Budget |  |
Testimony To:
New York State Senate Finance Committee
New York State Assembly Ways and Means Committee
Joint Legislative Hearing:
Examination of Governor Cuomo’s 2011-2012 Executive Budget
Economic Development
Presented By:
Karyn Burns
Vice President, Communications & Government Relations
MACNY, the Manufacturers Association
February 14, 2011
To start, I would like to thank you for facilitating this Joint Legislative hearing, and for allowing me the opportunity to speak on behalf of the state’s manufacturing community and provide our sector’s input on particulars of the 2011-2012 Administration budget. My name is Karyn Burns, and I am Vice President of Communications and Government Relations for MACNY, the Manufacturers Association, based in Syracuse, New York.
MACNY is the State’s premier manufacturing trade association, representing 330 companies with over 55,000 employees across nineteen counties in Upstate New York. Founded in 1913, we pride ourselves on not only being the largest association of manufacturers in New York, but also one of the oldest and most widely recognized associations in the nation. We continue to advocate for causes that will enable New York State manufacturers to thrive in today’s competitive global market, because manufacturing is a critical component of a vibrant economy.
It is no secret that our state is enduring difficult times. In fact, it is anything but a secret: recent studies have concluded that we as a state are now considered the highest taxed state in the nation. Our State, once a national power house, is now enduring what is considered to one of the worst deficits in our long and experienced history.
However, despite the intricacies and details of conducting business in such a difficult business climate, manufacturers and businesses are still here, and they are doing whatever they can to continue operations, sustain and grow jobs, invest in their facilities, create quality products and contribute to their communities. Why? Because they believe in New York State and they truly want to do business here.
To validate this claim, despite one of the most challenging budgets in history last year, where businesses were left to curb significant costs through added taxes and fees, these businesses are still here, still running, and most importantly, still want to stay. Last week, I was honored to organize our Statewide Manufacturing Alliance’s 4th Annual Manufacturing Day here in Albany. One of the comments from an attendee and longtime manufacturer to our Legislative panel clearly backs my claim: they said they had been attending Manufacturing Day for three years. The first year, three years ago, they left frustrated, last year, they left livid and angry at the system, and this year, they feel optimism and hope.
I think this message resonates well in today’s hearing, because we as a business community recognize that in order for New York State to regain its financial footing, we all need to work together. Albany does not create jobs; it creates a sound business climate that allows business create jobs. These businesses are ready to work with you and your colleagues on creating a fair and effective business climate, and despite making some sacrifices, ready to tackle our budget crisis together and get New York State back on track.
In order to begin our work together, the State needs a significantly amended and fully functional economic development plan. I believe many of the recommendations in Governor Cuomo’s budget are the stepping stones and solutions needed to some of the state’s most stifling business climate concerns.
To start, I applaud the Governor in his recommendation of establishment of the Regional Economic Development Councils, and with his recommendation of Lieutenant Governor Robert Duffy, an upstate man through and through, leading the charge. As mentioned previously, it is absolutely critical that business and government work on our fiscal crisis in partnership. Through these councils, I believe business, community, academia, municipal, labor and government can and will work together to create regionally specific plans that will be effective and executed properly. Through your power and ability as a Legislature, I hope you take the Executive Order one step further, and establish this well-received initiative into Law. Also in the spirit of working together and with those who have experience, I would encourage each council to have a representative from each respective regional manufacturing association. Our Statewide Manufacturers Alliance consists of regional association groups from around the State, who represent thousands of successful, energetic, and ready-to-grow manufacturers. I truly believe that representation from one of our state’s oldest, critical and most resilient sectors would be a valued asset to each of the regional councils and the products and plans they create.
In order to build on our state’s current strengths and capitalize on our manufacturers and businesses that are already here and operating, I think another area in need of revisiting and retooling is in the Excelsior jobs program. The complete retool of the program left much to be desired by the State’s manufacturing community, and most would agree that a second look at the program and significant considerations and changes should be made in order to better accommodate the state’s business community. I am encouraged by provisions made in the budget on Excelsior, and hope to see more significant change in the future, with your help. While the changes are small, and extend the current tax benefit period from five to ten years, that shows me that government sees that this program is not perfect, and still in need of retooling. I would encourage you and your colleagues to make more changes and improvements, such as addressing the limited resources invested in the program, or the significant lack of regional input. The current cap value of Excelsior is estimated to be less than half of the benefit of the Empire Zones program. Simply put, that is not enough. Again, in order to make our manufacturers and businesses grow and thrive, they need to be able to operate in a climate that enables them to do that. I encourage you and your colleagues to continue evaluation of our Excelsior program, and working with the business community, find ways to improve it and make it more beneficial.
The most significant area of economic development in need of attention is our current energy programs. I cannot say enough how thrilled our sector is with the inclusion of Recharge New York, a long-term and fully sustainable economic development program, as part of the Administration budget as one of two stand alone bills.
For years, our members have struggled with the rapidly increasing costs of energy in New York State, a cost which has increased exponentially over the last few years. Manufacturing is the most energy intensive sector of the economy. In order to make long term decisions about future operations, manufacturers must be assured that they can continue to operate competitively, including the ability to obtain low cost energy resources. New York manufacturers need a long term solution in accessing energy rates that are comparable to the national average, rather than at the top of the list in terms of cost and rate. Long term plans must be implemented by the State for the provision of low-cost power to the sector driving our economy, manufacturing – the same sector that is the most energy reliant and intensive in day to day operations.
I hold great pride in the fact that MACNY has been a leader in lobbying the New York State Legislature for a comprehensive, long-term solution to alleviate the high energy costs inflicted on New York State manufacturers. MACNY would like to see these current programs, upon their scheduled date of expiration, phase into a single, state-wide comprehensive and long-term economic development power program. Recharge New York is the solution.
A large contributor to the success of Recharge New York relies on reassessing current power sources and where they are most effective. Recharge New York calls for reallocation of 455 megawatts of hydropower from the Niagara and Saint Lawrence-FDR hydroelectric projects to economic development power programs, supporting jobs in New York State and improving the quality of life for your constituents.
Throughout the years, many have debated the best use of the 455 mw of hydropower in New York. MACNY firmly believes that allocating this resource to energy intensive manufacturers will make the State of New York a better place to live. Many out-of-state manufacturers are currently looking to relocate, but choose not to do so in New York because of our high energy costs. MACNY strongly believes that allocating the hydropower to the business community will not only help New York retain businesses already located here, but also attract and retain strong, growing out-of-state manufacturers. Low-price hydropower cuts the bottom line for businesses, making them more competitive with out-of-state businesses for capital dollars, investments and expansion. Businesses with continuous low-cost energy can plan for the future with confidence because of price predictability from long-term hydropower contracts. Passage and implementation of Recharge New York will enhance the ability of manufacturers and businesses to expand and create new family-supporting jobs for New York State residents. I strongly encourage you and your colleagues to support this fully sustainable and beneficial economic development program within the budget.
In closing, I leave with you with not only my written testimony, but a copy of our latest study from the Manufacturing Research Institute, the policy and research arm of the Manufacturers Alliance of New York State. We commissioned Zogby International to survey 100 manufacturing executives from across New York State on what they thought of the business climate and of doing business in New York State. I will admit the results are dismal, but an underlying message should be clear: they are here, they are doing business, and despite a difficult business climate, they want to continue doing business here. These businesses and our sector as a whole are ready and willing to turn this climate around, together, one step at a time. I hope you find this information helpful. On behalf of MACNY and its collective membership, I thank you for your time.
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