Brooklyn's Progress
April 2001

Albany Trip a "Capitol" Success! Led by Chairman David Manning (Keyspan Corporation) and Government Affairs Committee Chair Dan Holt (Courier Life Publications), an energetic team of 22 Brooklyn Chamber of Commerce Members and staff spent two days in Albany lobbying the state legislature on behalf of the Brooklyn business community. The Chamber’s annual trip, which took place March 20-21, has become a major event in the busy Albany scene. Over 400 guests -- including nearly 100 legislators from throughout the state -- attended the Chamber’s famous “Brooklyn Night in Albany” event, which featured Brooklyn-made specialty foods and beverages. In individual meetings with Brooklyn members of the Assembly and Senate, Chamber members rallied around six key issues, from expanding the state’s “Empire Zones” program to extending Family Health Plus insurance coverage to legal immigrants. “This was my first time in Albany with the Brooklyn Chamber, and I was really impressed,” said David Manning, SVP of Corporate Affairs at Keyspan Corporation, who became Chamber Chairman last September. “We got a warm and enthusiastic reception from Brooklyn legislators as well as from elected officials across the state.” Assembly Speaker Sheldon Silver met with the Chamber group on Tuesday afternoon. “It’s great to have the support of Speaker Silver, who has always been a strong champion of Brooklyn,” observed Dan Holt. “He has to promote economic development all across the state, but clearly Brooklyn is important to him and he appreciates all the work our Chamber is doing.” The Chamber delegation also met with Denise Murphy of the New York State Business Council for an update on legislative matters from other corners of New York State. And Alan Chartock, SUNY Professor, Publisher of the “Legislative Gazette” and Chairman of the WAMC Public Radio Network, led an informative breakfast forum, full of political prognostication, punditry and plain old gossip. But for many the trip’s highlight was the Chamber’s annual “Brooklyn Night in Albany” reception, sponsored this year by Health Plus. The hungry Albany crowd formed long lines in “The Well” of the Legislative Office Building for egg creams made with Fox’s U-Bet (H. Fox), beef patties (Tower Isle’s Frozen Foods), beer (Brooklyn Brewery), hot dogs (Nathan’s), potato salad (Blue Ridge Farms) and, of course, cheesecake (Junior’s). Other treats included Best Health and Squeez’r beverages (Brooklyn Bottling), bagels and bialys (Bell Bialy), rugelach (Steve’s Mom) and pretzels (NY Pretzel). Bob Zeig, Executive Director of the Brooklyn Sports Foundation, volunteered to drive all the food up to Albany. “He saved the party”, explained Klara Carames, of the Chamber staff. “This was the biggest ‘Brooklyn Night’ party the Chamber has ever hosted”, exclaimed Dominic Mascara of Health Plus. “It was terrific!” he added. Jamie Van Bramer, of Yoswein New York, the Chamber’s government affairs consultants, said that attendance was better than 400, with 90 members of the New York State Legislature showing up in recognition of the “growing significance of Brooklyn as a model for economic development at the state-wide level.” The Chamber even recruited the venerable “Brooklyn Sym-Phony” band to provide musical entertainment at the affair. The cacophonic legends of Ebbets Field played their nostalgic tunes and posed for the Albany paparazzi with politicians from around the state. In May, the Government Affairs Committee will host its annual trip to Washington, DC. Chamber Members interested in joining this expedition should contact Dan Holt at Courier Life Publications or Klara Carames at the Chamber office. Energy Policy For thriving neighborhoods and businesses, Brooklyn needs a sufficient supply of affordable energy produced and delivered through safe, environmentally responsible technologies. Increase Generating Capacity Healthy economic growth and an increasing population mean that New York City is using more electricity than ever before. Currently, there is not enough electric supply to meet the city’s needs. The NYS Independent System Operator recently recommended that New York State approve up to 5,000 megawatts of new electrical generation statewide this year. (Currently, the state has a maximum daily generating capacity of 35,636 megawatts.) The ISO estimates that New York City itself needs 2,000 – 3,000 megawatts of new power to avoid serious shortages. Certainly, our region “imports” electricity generated as far away as Canada, but, to ensure reliability, state law requires that 80% of New York City’s power be generated by plants within the City. Therefore, more electrical generating facilities need to be sited and built within the city. The City and State must expedite the construction of new power plants and must speed up the approval process for building new plants without sacrificing the necessary environmental reviews. When locations for new plants are determined, Brooklyn should not become home to more than its “fair share” of generating facilities compared to the other boroughs. And special attention must be given to low-income communities with minority residents to prevent these neighborhoods from receiving unfair concentrations of these facilities. By increasing the local supply of electricity, the construction of additional generating facilities should also help contain energy costs. After watching California grapple with its severe energy crisis (and a short-term state bail-out of $800 million), the lesson is clear -- a deregulated marketplace fails if the energy supply is inadequate or if the deregulation is insensitive to the need of the suppliers. Increase Conservation New York State should do as much as possible to promote energy conservation, including expanding programs that help businesses convert to energy efficient equipment. At one time, New York led the country in its investment in conservation programs, including television advertisements to educate the public. Now, it spends about one-third per capita of what other states in the Northeast spend to promote energy conservation. The Legislature and Governor should work with the New York State Energy Research Development Agency to create new energy conservation programs, including public awareness campaigns and incentives for businesses to convert to energy efficient equipment. Encourage Cogeneration New York State and New York City must encourage the development of more cogeneration plants. Many large institutions and housing complexes generate their own power through a process known as cogeneration. Through this process, they generate electricity and use the resulting steam to heat their buildings. When complexes generate their own electricity, it reduces the demand on the traditional energy suppliers and also reduces the demand on the infrastructure used to deliver electricity throughout the city. The city and the state must work with established cogeneration companies to encourage the development of more cogeneration plants. Economic Development Expand the Empire Zone Program The Empire Zone program, administered by the NYS Empire State Development Corporation, makes specified regions across the state eligible for tax credits and other economic development incentives. There are currently 52 Empire Zones statewide. There are three in Brooklyn: Sunset Park/Red Hook, the Brooklyn Navy Yard/East Williamsburg and East New York. The Brooklyn Zones have been very successful at attracting and retaining manufacturing, wholesale distribution and other businesses and at creating many new jobs for Brooklyn residents. Businesses that locate in Empire Zones receive a significant reduction in taxes through a wide range of tax credits and exemptions on wages, capital investment and property taxes. Empire Zones can become virtual tax-free areas for start-ups and newly attracted businesses to New York State. Our Brooklyn Zones are now attracting high-tech companies, thereby diversifying the borough’s economy and upgrading Brooklyn’s technological industries. Expanding the Empire Zone program was a major part of the Assembly's tax-cut proposal last year, and the conversion of Economic Development Zones to enhanced Empire Zones was approved by the Senate, Assembly, and Governor Pataki in 2000. Currently, the Senate is considering a proposal to increase the number of Zones and to increase the benefits within them. Recognizing the success of the Empire Zones, the Brooklyn Chamber of Commerce urges the Legislature to seek the expansion of this important program. Extend the Empire Zone Investment Tax Credit to Developers of Industrial Property In an attempt to spur the development of much needed industrial space, the State offers a tax credit to manufacturers that construct or rehabilitate their own buildings in the 52 Empire Zones (formerly the Economic Development Zones). This Investment Tax Credit is equal to 10 percent of costs associated with the construction or rehabilitation of industrial properties. However, this credit has not reached its maximum effectiveness because it is only available to “owner-operators.” It is not available to developers who build and then sell or lease industrial properties, or to companies that lease their facilities. For a variety of reasons, many manufacturers do not want to build or rebuild their own facilities. They are running businesses and may not have the time to plan and oversee the construction of a building. They may want to move quickly into a building that is already constructed. Or, they may simply prefer leasing instead of owning. Developers of industrial property often provide space solutions for these businesses. However, to offset extremely high land and construction costs and because residential development can be so much more attractive in today’s real estate market, developers of industrial facilities need access to these important Empire Zone incentives. Without meaningful incentives to encourage industrial development, developers of industrial space are often drawn to more profitable projects, such as commercial office buildings or residential projects. Tax Policy Increase the Sales Tax Exemption on Clothing/Footwear The Sales Tax Free Weeks held between 1997 and 2000 have proven beyond doubt that New Yorkers were avoiding the sales tax on clothing by traveling out of the city, and sometimes the state, to suburban shopping malls to do their shopping. During the test weeks, clothing retailers in New York City experienced revenue increases of between 48 and 77 percent. As of March 1, 2000, the sales tax was eliminated on clothing and footwear costing $110 or less. The New York City Economic Development Corporation estimates this will result in an additional $910 million in spending and will create 13,200 new jobs in New York City alone. The Brooklyn Chamber of Commerce applauds this new policy as a good first step. However, New York businesses will continue to lose an enormous amount of money until the exemption limit is raised. Many New Yorkers will be hard pressed to find the clothes and footwear they need for their families less than $110. Many will continue to travel to New Jersey to purchase a significant portion of their wardrobe. Let’s face it, in 2001, $110 is no longer an exorbitant amount of money to spend on a pair of dress shoes or a winter jacket. These items will also continue to be purchased in stores outside of New York, meaning New York will continue to lose revenue and jobs. The Chamber recommends increasing the exemption amount to $250 or $500. For example, at $500, the NYC Economic Development Corporation estimates that the increased local sales would result in the creation of 17,400 jobs and $1.2 billion in additional spending. Speed Up the Elimination of the Gross Receipts Tax The Brooklyn Chamber of Commerce supports the effort of Assemblyman Robin Schimminger (D-Erie) in urging the complete elimination of the state's gross receipts tax (GRT) on electricity and natural gas and other energy taxes, effective this year. According to Assemblyman Schimminger, chairman of the Assembly Committee on Economic Development, Job Creation, Commerce and Industry, his bill would save residential and business customers $450 million a year. Last year, lawmakers repealed the GRT on manufacturers, effective immediately. The legislature also repealed, with a five-year phase-in, the GRT on commercial businesses and the gas import tax on natural gas bought out of state for in-state use. And the legislature enacted a cut in the GRT on residential gas and electric service that will approximately halve that tax over five years. Health Care Extend Family Health Plus to Legal Immigrants In New York State there are 1.7 million working people that do not have access to health coverage (or can’t afford coverage) and are also ineligible for Medicaid. In fact, three-quarters of uninsured New Yorkers live in working families. Unfortunately, even when health insurance coverage is offered to low-wage earners, it is usually too expensive for them or for their employers, who are often small businesses. To address this inequity, The Health Care Reform Act of 2000 effectively expanded quality health care coverage to nearly one million uninsured New Yorkers under a new program -- Family Health Plus. Family Health Plus is an initiative designed to extend health coverage to low-income, working adults, age 19 years up to 65, who do not have health insurance through their employers, yet have enough income to be disqualified from other public programs, such as Medicaid. The Brooklyn Chamber of Commerce strongly supports the State’s efforts to launch Family Health Plus, and urges the State to make it available as quickly as possible. Given the diverse population of Brooklyn and the large number of immigrants living and working in Brooklyn, it is very important that the new Family Health Plus insurance program be made available to legal immigrants. Immigrants are an integral part of the U.S. society, contributing both to the economy and social diversity of the country. Yet, despite their important role, immigrants disproportionately lack health coverage and receive fewer health services that native-born citizens. According to a Kaiser Family Foundation Report, immigrant populations may face access and coverage disparities because of specific policy changes, including the law that fundamentally changed the U.S. welfare system, The Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). Currently, legal immigrants who entered the U.S. after August 22, 1996, for all practical purposes are ineligible for SSI or for the related categorical eligibility for Medicaid, until they become citizens. The law eliminated federal matching funds to states for Medicaid for legal immigrants who entered after August 22, 1996. This policy obviously treats new legal immigrants differently from existing legal immigrants and citizens when determining eligibility for Medicaid and other public benefits. However, states have the option to ignore the five-year ban imposed by PRWORA for children and pregnant women by providing coverage for children through Medicaid and/or CHIP and through Medicaid for pregnant women. In fact, ten states have already restored eligibility for public health insurance for this population, thus recognizing not only the critical health care needs of legal immigrants, but also their contribution to the country’s economy and its tax base. By expanding coverage for low-wage working adults through Family Health Plus, New York State is moving into the right direction: starting with the lowest income families first, those least capable of obtaining health coverage on their own. However, we cannot overlook the tens of thousands of men and women who positively contribute to the economic success of Brooklyn. Legal immigrants have played a vital role in the resurgence of small businesses, services and manufacturing in New York State. Clearly, health insurance is a key element in ensuring that legal immigrants can integrate successfully into American society. The Brooklyn Chamber of Commerce believes that if the State of New York were to extend Family Health Plus coverage to eligible legal immigrants, New York’s economy would clearly reap the benefits in the form of improved health for its workforce and reduced burdens on hospitals and health centers that serve our communities. Study after study show that, with a small investment, New York can make a big difference in the lives of tens of thousands of immigrants who have helped fuel New York’s economic growth. Support the North Brooklyn Health Consortium’s Plan for a Demonstration Project to Provide Low Cost Health Insurance to the Uninsured Led by the Office of the Brooklyn Borough President, the Northern Brooklyn Health Consortium seeks to provide low-cost, small business health insurance for uninsured Brooklyn workers. The Consortium (which includes the Brooklyn Chamber of Commerce) needs the support of the Legislature to create a demonstration area in northern Brooklyn with statutory waivers from certain costs of doing business that are part of HCRA 2000. With these waivers, premium costs can be reduced for the uninsured population in the demonstration area, which consists of Williamsburg-Greenpoint; Fort Greene; Bedford Stuyvesant; Ocean Hill-Brownsville; Bushwick; Crown Heights and East New York. The Consortium is seeking demonstration status for waivers from both the surcharge and covered lives tax that health care plans pay for public goods. These costs of doing business can add as much as 7 percent to the cost of a premium in the New York City region. The Consortium is also seeking demonstration status for access to the Healthy New York Stop Loss Pools. Access to the stop loss pools could provide as much as a 10 percent reduction in the cost of the premium. This cost can also add significantly to the cost of doing business and therefore to premium costs. The Consortium’s proposed health insurance product, called Brooklyn Health Works, is designed for working low-income families (and individuals) with incomes between 150-250 percent of poverty, which is about $25,000-$35,000 for a family of three. The Consortium is comprised of the private and public hospitals in northern Brooklyn; the freestanding primary care centers; the Brooklyn Chamber of Commerce, and other community-based organizations that provide health care in northern Brooklyn for a growing number of uninsured people. The Consortium’s demonstration seeks to address the needs of modest wage earners who live and work in Brooklyn, often working two jobs, who cannot afford insurance because of more pressing needs such as rent and food. Environmental Conservation and Land Use Pass “Brownfield” Legislation to Stimulate Economic Development New York State must pass “brownfield” legislation that requires sufficient clean up of “brownfields” but also sets reasonable liability limits for developers who undertake responsible clean-up efforts. One of the keys to making new land available for businesses and housing in Brooklyn is cleaning up “brownfields” – former industrial sites whose use is limited because of past contamination. Most “brownfields” are vacant sites that, once cleaned, could be converted into much needed spaces for job-generating businesses. While these sites are not so contaminated as to qualify them as “Superfund” sites, their existing pollutants and related liability risks are sufficient to discourage banks, developers, and municipalities that would otherwise be interested in redeveloping them. Two studies – one by the Mayor’s Office of Environmental Conservation and a more recent study by the Office of the Public Advocate – estimate that there are as many as 3,500 acres of “brownfield” sites within New York City. Given Brooklyn’s industrial history and large amount of industrially zoned land, it is suspected that a substantial number of “brownfield” sites are located in our borough. Many states have created Voluntary Cleanup Programs (VCPs) that successfully offer incentives to developers and municipalities that are willing to clean up and develop “brownfield” sites. For example, in Chicago, a golf course covers a former landfill. A technology center was built on a former steel mill in Pittsburgh. New York has a VCP, but most experts consider it inferior to other states’ programs. The Brooklyn Chamber of Commerce urges the State Legislature to pass “brownfield” legislation that addresses the following goals: · Limit liability for existing environmental conditions from non-responsible parties seeking to acquire and develop property, including banks · Release responsible, liable and non-responsible parties who enroll in a State VCP from liability once a State approved clean up has been performed · Create incentives for the use of innovative technology in site clean up · Create a set of risk-based clean up standards that are based on the intended use of the property · Extend the tax deductions for non-responsible parties that clean-up and redevelop “brownfields." Education and Workforce Development Increase Pay for Teachers in New York City Public Schools and Ensure that New York City Public Schools Receive their “Fair Share” of State Education Funding As many Members of the Brooklyn Chamber of Commerce have acknowledged, the key to their success is finding and keeping skilled workers. In today’s economy, more and more jobs are dependent on the knowledge of computers and technology. The recent decision by the United States to increase the number of visas given to college educated, highly trained foreigners may be the most glaring example that the United States education system is not providing our young people with the skills they need to fill these types of jobs. The high-tech industry lobbied vigorously for this change in federal immigration policy. On the local level, with an increasing number of high-tech companies moving to Brooklyn – our borough has more “Digital NYC” districts than any other – this is certainly a problem that must be addressed. Teacher salaries should be increased to compete with neighboring counties. To attract well-trained, motivated and effective teachers, salaries must be increased and working conditions must be improved. Currently, starting salaries for teachers in New York City are $9,151 below those in Nassau, $5,102 less than Rockland, $4,351 less than Suffolk and $7,110 less than Westchester. The difference does not improve as teachers become more experienced – after five years, the pay differential is even greater. Figure in the high cost of living in New York City, and it becomes clear that many qualified teachers will simply unfortunately choose not to work in New York City Public Schools. The State must change the funding formula that results in New York City Public Schools receiving less than its fair share of state education funding. In this current school year, an estimated 37.8% of the state’s children are attending school in New York City. Yet the City will receive only 36.2% of the state’s education aid. That small difference amounts to a real dollar shortfall of $214 million. In 1999, the shortfall was $198 million. It was about $330 million for the three years before that.