I hate red tape. Years of contracting with government has nurtured a hearty dislike for intricate rules imposed by tinpot dictators in legislatures and administrative offices. Here at CGR we recently executed a contract with New York City that was the size of Rochester’s White Pages (not Manhattan’s, thank goodness). The number of schedules, promises, clauses and conditions we had to complete was a project in itself. Not that I’m one to condone the harvesting of tropical hardwoods. And I’m as big a fan of peace in Northern Ireland as the next guy. We had to address both issues in the contract. But is all this really necessary?
That’s why it feels rather odd to be urging more red tape for local development corporations (LDCs). But that’s what is needed.
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Perhaps we have the Iowa voters to thank for the foolishness of the latest energy bill. It significantly increases incentives to produce ethanol from corn.
Am I unaware of the urgent threat of global warming, unwilling to pay a few cents more for fuel and Fritos to end our servitude to sheiks and demagogues? Have I not seen Al Gore in An Inconvenient Truth (or one of the sequels playing in an auditorium near you)?
Here’s the problem: Ethanol from corn just doesn’t make sense economically or environmentally. Many studies conclude that the corn-to-fuel process consumes more fossil fuel that it displaces. A recent study from the Organization for Economic Cooperation and Development dubbed corn from ethanol as “a cure [for oil dependence] that is worse than the disease.”
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In partnership with the Finger Lakes Health Systems Agency, CGR sponsored a conference in Albany on November 27 to discuss the role planning should play in New York’s health care industry. This column is an edited version of my remarks to conference participants.
My father-in-law practiced radiology at Howard Community Hospital in Kokomo, Indiana for 40 years. And I was always hearing stories about the latest threat from St. Joe’s, the competition across town—a new CAT scanner, or this new technology called “magnetic resonance imaging.” When the radiology practices of Howard Community and St. Joe’s merged just before he retired, you’d have thought the Berlin Wall had come down.
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It’s time for TIF reform in New York State. TIF stands for “tax increment financing,” a community development vehicle that is widely used in states other than New York. While we’re one of the 49 states with a TIF law, ours is hardly ever used.
But most of you still don’t know how this works. The idea behind a TIF makes a lot of sense. Let’s take Midtown Plaza as an example. Here’s a prime piece of real estate in the middle of Rochester that is just waiting to be developed. Oh, there’s an asbestos-laden, largely empty, decaying shell in the way? Well, in the tradition of economists everywhere, let’s just assume that the building is gone. THEN we’ll have a nicely located, developable parcel. And that parcel, being developed, will generate tax revenue. And the land around it will generate more tax revenue, as it no longer sits next to a nearly-empty eyesore.
ASSUMING we could get rid of the building. Read more »
The captain has locked the armored cockpit door, the engines whine, and the plane pushes off, rolling away from the gate so another can take its place. Then it stops. After the safety briefing the pilot tells you the bad news — there are 40 or 50 planes ahead of you, all waiting their turn to slip the surly bonds of earth. As if the uncomfortable flight weren’t enough, you are now condemned to spend another hour or two waiting on the ground. Who’s surly now?
For the year ending August 2007, a third of scheduled flights left the John F. Kennedy airport more than 15 minutes late. The average delay for late departures was just over an hour. That’s the average, so for every flight that leaves a tolerable 30 minutes late there is another in which passengers sit and fume for 90.
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Government can not grow an economy—only private enterprise can do that in our market-driven system. The role of the public sector is to facilitate and guide private sector development by creating a fair and functional business environment and by removing obstacles to growth. Governor Spitzer’s promise of $50 million for the demolition of Midtown would remove a very significant obstacle to Rochester’s development. The private sector had reached an impasse on this complex problem. With market rents per square foot in the low double digits, neither renovation nor demolition made financial sense. For a less significant property, the buildings might properly have been padlocked and allowed to slowly decay until some change in circumstance presented a solution that did not require taxpayers to foot the bill. Midtown Plaza, however, is rightly “too big to fail,” a property so large and so central that it holds downtown’s future hostage.
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Governor Spitzer has a big task ahead of him: He’s campaigned on the idea that the state can do something for the Upstate economy. We elect governors whom we believe can fix things, right?
So it was with great interest that many of us read the study by consultancy A.T. Kearney aimed at developing an agenda for the state’s economic development arm, Empire State Development. No, this wasn’t presented as state policy, but we all assume that Kearney would be shrewd enough not to issue a report that was seriously at odds with administration thinking.
The Kearney study made a number of good points. But I was disappointed to see them fall into the familiar trap of focusing much of their attention on “sexy” sectors, groups of firms based on technologies that hardly existed a generation before, sectors that every state and nation is chasing like a Labrador after a ball: “New York’s best hope for the future is to focus both statewide and regional investments on emerging sectors—especially nanotechnology, bioscience and cleantech.”
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An article published in the current issue of Health Affairs reports on pricing for self-pay patients, one of the only parts of the health care business that is largely “unregulated.” The author, Gerald Anderson, reports that people who pay their own hospital bills get charged more for care than those whose bills are paid by insurance companies or have Medicare or Medicaid coverage.
That’s not a surprise, of course. We’re accustomed to bulk discounts and buying clubs—the “membership has its privileges” sort of thing. Yet the magnitude of the difference should capture your attention: on average, patients without public or private insurance pay three times the Medicare-allowable cost. Anderson doesn’t report the average for New York but in New Jersey self-pay patients are charged a whopping 4.56 times the Medicare-allowable cost. Pennsylvania is right behind with a charge-to-cost ratio of 4.33. California, Alabama and Nevada round out the rest of the top five. At the other end of the scale Wyoming and Maryland hospitals charge self-pay patients 1.85 times and 1.23 times the Medicare-allowable cost. Note: Let me suggest that “cost” is in the eye of the beholder (or, at least, the beholder’s accountant). I don’t claim here that the Medicare number is the right way to define cost—hospitals don’t think so—but I do want to call attention to the discrepancy.
The article isn’t describing a new problem, but it is getting worse. In 1984 the average ratio was 1.35.
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Last fall I wrote two columns on the mechanics of the state’s property tax system—how assessments are established, why we have this process of “equalization,” and how uneven is the administration of the system. Boring stuff, no? Worse, I can’t claim that fixing the problem would actually cut property taxes, just shift the burden around. Oh, a perfect reform would cut back the amount of money spent by the state on the equalization process, but better administration would probably cost more in the beginning (think “deferred maintenance”) and not save any in the long run.
Is there a constituency out there for fairness and transparency? Probably not, but Assemblywoman Sandy Galef (from Westchester, the epicenter of bad property tax administration) is trying. She chairs the NYS Assembly Committee on Real Property Taxation and has sponsored or co-sponsored a number of bills aimed at fixing the mess.
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I’m not in the “tax as theft” school. How else can we come together to fund public schools, get our streets fixed and plowed, and finance support for the needy? Sure, some of that could happen without coercion, but I’m not one to campaign for a radical shrinkage of the public sector. Taxes are a necessary evil.
If you are still with me, then the question turns on how to tax and what to tax. Odd as it sounds, I write today in defense of the poor, embattled property tax. In recent forums sponsored by CGR’s New York Matters campaign on Long Island and in Rochester, several participants spoke in favor of shifting from the property tax to the income tax, particularly for the support of public education. The sales tax, too, is clearly preferred by voters to an increase in the hated property tax. Elected officials have certainly gotten this message—counties across the state choose an increase in the sales tax over a property tax hike when money is tight.
Why should we keep the property tax?
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