NYS faces mother of all heavy lifts

Mark Alesse - Decades of warnings from small business, local government and reform groups, dismissed as special pleading, have finally been realized: New York, now deeply in debt, losing its population of 20- to 30-year-olds and facing a $10 billion deficit, has hit rock bottom. And judging by his early pronouncements, Gov. Andrew Cuomo is determined to face the problem squarely and repair the damage.

His most striking statement has been that “New York has no future as the highest-taxed state in the nation.” True, but surprising to hear from a New York Democrat. That grim future has already arrived upstate. The Federal Reserve has concluded that the Buffalo region's economy increasingly consists of government spending on the elderly, public employees, prison populations, welfare recipients and the mentally ill. An unsustainable situation.

This depression occurred in slow motion, and I witnessed it firsthand over 18 years of conducting meetings throughout upstate. It moved me profoundly. Businesses in families for generations were dying, and their owners begged legislators for relief that never came.

Not many grasped the scope of the disaster. Mr. Cuomo does. Even powerhouse New York City can't afford upstate to remain an economic dead zone subsidized by downstate taxes.

Mr. Cuomo has said that to restore fiscal stability and growth, he must cut spending on education and health care—the largest and most sacrosanct budget items—effect pension reform and trim the state's work force. He must cap property tax hikes at 2% while easing local government mandates. He must hold the line on other taxes and reduce the costs of doing business.

The governor must also push through reforms previously declared nonstarters by Speaker Sheldon Silver, including the disclosure of outside income (the speaker's is thought to exceed $1 million annually from personal injury lawyers) and redistricting.

Fulfilling Mr. Cuomo's agenda will be the mother of all heavy lifts. Opposing it will be powerful groups that benefit from the status quo—not least of which are those in the Legislature with a vested interest in not rocking the boat. This is why reform has foundered for so long.

Can any governor hope to prevail? Not without a battle royal. Mr. Cuomo, known to be a savvy political infighter, understands this better than anyone.

As Crain's has reported, businesses have formed the Committee to Save New York, with former Comptroller H. Carl McCall and investment banker Felix Rohatyn behind it. They have $10 million to help them fight alongside Mr. Cuomo. That is a resource lacking in past reform attempts, and it will give this effort a decisive edge.

There's no room for failure. And with Mr. Cuomo's tough-minded leadership and the business community's substantive involvement, there is at last reason for optimism.

Mark Alesse represented the small business community as state director for the New York chapter of the National Federation of Independent Business.