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Read the Economic Committee’s Policy Positions here:
Balancing the State Budget
We believe that New York State need to focus on a long term budget strategy that matches increased fiscal discipline with an emphasis on stimulus spending to soften the impact of the recent recession and improve our long term revenue outlook.
While fiscal mismanagement and ballooning entitlement programs are partially to blame for the current shortfall, we cannot ignore the significant decrease in state revenues due to a drop in tax receipts caused by the recession. From 2008 to 2009, tax revenue in the state fell by 36%. This decrease in revenues has created a dire short term problem, but this problem should not be though of as the new status quo. A recovery, at whatever pace, should eventually bring revenues back to pre-crisis levels. Attempting to balance the budget in the near term by cutting government jobs, programs, and entitlements could increase the length and severity of the economic downturn, and lead to lower tax revenues going forward.
To ultimately balance the budget and improve the long term financial outlook of New York State, we should be taking steps to increase tax revenues long term by investing in infrastructure, maintaining social services that support consumer spending, and investing in education, job training, and small business development to increase the earning power of our citizens. Cuts to these areas may produce a short term illusion of fiscal responsibility, but our long term fiscal problems can only be solved by hastening the economic recovery and increasing long term revenues.
Diversifying the New York City Economy
We agree with the general outline proposed by the Task Force on Diversifying the New York State economy through Industry-Higher Education Partnerships. New York is home to many of the largest research universities and institutions, multi-national companies focused on research and development, and Venture Capital Firms. Yet, we rank 22nd among states in percentage of research spending sponsored by industry and only attract 4% of all venture capital money.
We believe in order to stimulate technology and alternative energy investments and start-ups, we need to give incentives to Venture Capital and Industry to partner with Universities to grow and develop innovation here in NY and then keep the companies here as they move onto maturity. We believe that can be accomplished through a mixture of grants and tax credits designed to incentivize investment. We need to encourage Private and Public sources to partner with Universities at earlier stages in their research, to both enable greater innovation to get off the drawing board and help guide their research towards commercialization and economic significance here in New York State. Universities should partner with alumni and entrepreneurs-in-residence to help incubate ideas through research and business development.
Additionally, we believe more urban development and building in areas outside of Manhattan will de facto diversify New York’s economy. Merchants and small businesses need lower-rent and price neighborhoods to be able to succeed with a sufficient critical mass of customers.
Banking for the Unbanked
We believe that New York City should support financial literacy programs and Community Development Credit Unions (CDCUs) in their efforts to increase access to banking for low income, unbanked populations. In New York City alone, a minimum of 800,000 people are unbanked, and more than 40% of New Yorkers have zero assets or negative worth. Currently, these people are served by a regressive network of “fringe banking” establishments, like check cashing locations or pawn shops. These need to be replaced by CDCUs that give unbanked New Yorkers the opportunity to build wealth and stability.
It is in the public interest to improve the situation of those less fortunate, but it is also in our economic interest to provide financial education for the unbanked so they can enter into the system. More financially stable residents spend more, rely less on entitlement programs, and are less likely to participate in illegal activities. Supporting services for the unbanked is an instance where working to improve the lives of individuals will also benefit the overall public good.
Expansion of Rail to Upstate
We endorse efforts to expand New York State’s rail system and the findings outlined in the New York State Department of Transportation’s State Rail Plan. We believe that an investment in rail would accomplish too valuable things: a short term stimulus generated by construction jobs that would offset the major losses created by the drop in new home construction; a long term stimulus generate by increased economic activity upstate due to lower transportation costs for local goods and easier access to smaller towns. Additionally, rail is a more environmentally friendly alternative to trucking, and would decrease our dependence on fossil fuels.
Job Creation Tax Credits
We support the creation of a state level job creation tax credit modeled after the federal job creation tax credit implemented under the American Recovery and Reinvestment Act (http://www.epi.org/publications/entry/bp248). The weakened job market has persisted even while other areas of the economy are recovering, and in the interest of increasing consumer spending, we believe that further stimulus is required for the job market. The crisis allowed many companies to slash payroll without fear of public reprisal, and there may be some hesitancy to begin expanding again. By creating a short term, added incentive for new hiring, we can mitigate some of that hesitancy and speed up the recovery.
Community Benefits Agreements
We support the use of Community Benefit Agreements (CBA) in development projects and we believe the the city must increase it’s efforts to enforce the terms of these agreements for their duration. We applaud John Liu’s formation of a task force to study the efficacy and application of CBA’s in New York City, and we encourage other lawmakers and government officials to keep developers beholden to the agreements they sign.
CBAs are agreements between a developer and a community coalition that define a set of benefits for the community that will be effected by the development in question. These agreements can have a mitigating affect on gentrification, and allow the community to benefit from the increased services and property values that often accompany increased investment.
Fund Allocation Reform
To increase the efficacy of government expenditures, we support efforts to reform the allocation system of Member Items in the New York Legislature, we support the findings of the New York Public Interest Group, and we endorse the passage of reform legislation S.7007/A.10116. We also believe that allocation process of member items at the New York city council level needs to be reformed on a similar basis.
Government funds should be allocated to maximize the value of taxpayer dollars by producing the most public good on a per dollar basis. The member items system creates inefficiencies by allowing the distribution of resources to be determined by the political power and seniority of specific elected officials, not by overall benefit to the constituency. It also encourages corruption by rewarding the consolidation of political influence and allowing elected officials to potentially direct funds in return for campaign contributions or other individual benefits. If we cannot abolish the member item system entirely, we should at least make the system entirely transparent, to decrease the potential for corruption and to allow the voter to determine the value of an elected official’s activities.