>>
On the next "need to know" - -
we're live and we're taking your-
phone calls.-
The subject is taxes.-
A subject that can stir debate -
like no other.-
More specifically, we're going -
to talk about how taxes affect -
our struggling upstate -
economy.-
We sent two experts out with -
camera crews to debate the -
issue.-
And they'll be in the studio to -
field your phone call questions.-
Stay tuned for this live -
discussion on "need to -
know."-
-
[captioning made possible by msnbc and U.S. Department of
Education] [captioning made possible by the U.S. department
of
education] -
captioned by the -
national captioning institute -
--www.ncicap.org-- >> Thank you for being with us -
this evening.-
I'm Michael Caputo.-
For the last five months a media-
collaboration called "fighting -
for rochester's future" has -
tackled the toughest issues -
facing the rochester region.-
The collaborative includes the -
democrat and chronicle, -
wokr-newssource 13 and WXXI -
public broadcasting.-
Tonight the collaborative -
focuses on -- tonight the -
collaborative focuses on the -
taxes, more pointedly, how the -
taxes on purchases, on property,-
on income, affects our -
economy.-
After all, we in the rochester -
area are preoccupied with -
creating and retaining jobs and -
politicians often link the -
amount of taxes we pay with the -
performance of our economy.-
Remember governor George pataki -
during the 2003 budget -
battle?-
He said the choice was between -
taxes or jobs.-
The premise, raise taxes and you-
kill jobs.-
The converse of that, lower -
taxes and you create more -
economic opportunity.-
Well, we're going to put that -
theory to the test.-
We have invited two experts in -
our community and posed a -
question to them.-
Are taxes really the chief -
problem of this upstate -
economy?-
With us in studio are Jean kase,-
vice president of government and-
public affairs for the rochester-
business alliance.-
And kent Gardner, a director of -
economic analysis at the center -
of governmental research.-
they will make a case for -
approaching the issue of -
taxation in New York state.-
but we will also want input from-
you.-
With us to explain more about -
this is newssource 13's Kathy -
Kriz.-
>> Our collaborative wanted to -
go live because we want your -
input in the discussion.-
You are invited to call us at -
454-6300.-
And ask a question of the -
panelists or make a comment.-
Over the five months of this -
effort, the fighting for -
rochester's future collaborative-
has depended on a citizen panel -
to help inform us on how we -
cover issues.-
They come from all corners of -
the region and from different -
backgrounds.-
Three of those citizen panelists-
are here tonight.-
From left to right we have, -
julio Lora, a director at the -
housing council who lives in -
Henrietta.-
Miriam Zinter, an entrepreneur -
from brighton.-
Dan Richardson, a business -
executive from parma.-
Their job will be to listen to -
the conversations with the -
experts and with the callers -
then render a verdict at the end-
of this program.-
>> So let's begin.-
And, remember, we want your -
input in this conversation.-
The number is 454-6300.-
First up is Jean Kase of the -
rochester business alliance who -
says quite simply that the -
current tax structure in New -
York state kills economic -
growth.-
Take a listen.-
>> The rochester business -
alliance represents thousands of-
small employers like the rug -
market, a second generation -
retail flooring establishment -
here in Irondequoit.-
New York's business climate is -
tough.-
Insurance, health care, energy, -
employers are hit with -
double-digit price increases, -
yet when their sales fall, -
competition prevents them from -
raising prices.-
And businesses that borrowed to -
cover their operating deficits, -
they go out of business.-
Are taxes the enemy of the New -
York state economy?-
Well, the real problem is that -
albany has an unsustainable -
preference for public sector -
jobs over private sector -
jobs.-
When you have a multibillion -
structural deficit and this -
pro-spending dynamic at the -
state capitol, the answer is, -
yes, taxes are business input -
costs, just like any other raw -
material.-
Higher taxes were passed on in -
three different ways.-
None of them good.-
Higher costs for consumers, -
lower wages, or less jobs for -
workers and lower dividends or -
share value for -
stockholders.-
Higher taxes have a negative -
effect on business decisions, -
job count, plant location, -
competitiveness, and the -
long-term health of our state -
economy.-
albany's using employers' money -
and yours to divert attention -
from its inability to cut -
expenses to balance the -
budget.-
This year it raised taxes, -
increased the personal tax, and -
reduced business incentives to -
invest in New York.-
This wasn't done in a -
vacuum.-
Entrepreneurial states are -
luring businesses away.-
Often just over the border.-
Working families and small -
businesses that don't move are -
left to pay higher and higher -
tax Bills.-
Excessive spending and the -
increased taxes that it drives, -
that's the enemy.-
>> Now is your chance to get in -
the conversation.-
Call us at 454-6300.-
I get the first question, however, Jean.-
Thank you for being with us.-
There is a study by the center of budget and priorities that
says when it comes to recession, cutting government spending
is
more harmful than increasing tax,.-
-
>> I think you have to do both.-
You have to cut spending but keep your taxing under control.-
Governor cuomo took the opposite tack that drove the economy
into the ground.-
It wasn't until governor pataki, I believe, back in 1 995
helped to turn the economy around.-
-
>> The job growth in the pataki administration was slower
than
during the 1980's in Mario cuomo's time.-
Do taxes create jobs?-
-
>> Well, I think having more disposable income is important.-
A lot of small businesses file their taxes through their
personal income taxes.-
When you have a goth raising the personal income taxes and
sales taxes it is taking money from the private sector into
the
public sector and not growth.-
-
>> Richard from Irondequoit.-
-
>> Why hasn't the news media focused on the cost driver,
the
major cost driver in the government taxes is salary and
benefits of employees.-
Now, with teachers, policemen and firemen making $60,000 or
$80,000 after working seven or eight years, that is the highest
in this country, but we don't see any analysis by the news
media.-
-
>> Well, would you agree with that Jean?-
Thank you, Richard.-
-
>> I think we do need to look at the spending side of
the
equation.-
Public-sector employees is a cost.-
I think in terms of a state budget, however, the biggest
components are the medicaid cost, health care for the poor and
elderly as well as k-12 education.-
When you are focusing on what are some of the cost drivers,
medicaid and education.-
-
>> Has the media let down the public in terms of covering
this
issue, would you say, and where?-
-
>> Well, it was interesting in reading the section that
appeared last Sunday in "the democrat and chronicle"
the focus
on the tax issue, the survey they referred to and a number of
people expressed they were satisfied with the level of
government services and the taxes they paid.-
The question it raised in my mind is are you talking to the
people who make $45,000 median income in our area?-
Those people are struggling with taxes.-
Secondly, I think it really didn't focus on where the spending
cuts can be made.-
Are we really delivering quality services for those in need
at
that level of expense?-
I think many people on medicaid would say no.-
-
>> We have another caller.-
Tom from Greece.-
Go ahead, please.-
Tom, are you there?-
Tom is not there.-
I will get another question in.-
If you cut taxes you cut spending.-
You cut spending, you cut public jobs.-
Are public jobs worth less than private jobs?-
I mean, aren't you also impacting the economy?-
-
>> It would be an impact on the economy, but I think it
is
truly the private sector that is where your revenue needs to
come from for the public sector.-
And that's where you're going to have the most ripple effect
throughout the economy.-
If you have private sector businesses growing and adding jobs,
you will have more tax revenue through your commk taxes -- your
income taxes, sales taxes.-
You are sucking resources away from the private sector.-
You will end up y a downward spiral.-
-
>> Are you with us caller?-
-
>> Yes.-
-
>> Please ask your question.-
-
>> Taxes have an effect on local jobs.-
Personally, I think, you know, in the manufacturing sector,
at
least with the larger employers, taxes is not the factor.-
It is the bottom line in the next quarter to come up to satisfy
their shareholders.-
They will move to where the labor is cheapest and it is a
writeoff off the federal.-
-
>> What do you say to that?-
-
>> I think there are a lot of factors at play.-
Much more beyond the tax issues.-
There are the differences in labor, differences in shipping
costs.-
So the taxes aren't the be all and end all to why jobs are
shipping offshore.-
-
>> Is that the number one -- is getting the taxes in this
state
down the number one in terms of creating jobs?-
Is that the top of the list?-
-
>> I think it is the top of the list, but unfortunately,
in New
York, it is a long list.-
We need to get workers comp costs down.-
We need to get general liability costs down.-
Health care costs have been double-digit increases for four
years now.-
Our energy costs are higher than our competitors.-
We have a long list of to-do items.-
-
>> We have a lot of tax incentive programs out there.-
What do you think of the structure right now in terms of
getting tack incentives, breaks, so forth, so on?-
-
>> I think our current system of tax incentives is helpful.-
We have companies in our region that have to compete
domestically and globally.-
Having some tax relief does help them.-
What I think we need to think about long term is do we have
the
kind of incentives that our businesses are transitioning into.-
Most of our tax incentives are built around bricks and mortar.-
These companies are technology based and may not be best suited
to their needs.-
-
>> I want to remind you of the phone number.-
454-6300.-
Now let's move on to kent -
Gardner from the center for -
governmental research.-
He's for a sensible, affordable -
tax policy, but he also insists -
that we don't leave out of the -
discussion what tax dollars pay -
for and How they contribute to -
the economy.-
>> OK.-
Let me go on the record, taxes -
in New York and monroe county -
are too high.-
They can be lower and should be -
lower.-
And if they were lower, we would-
have an easier time retaining -
jobs, growing new jobs and -
attracting new firms to this -
community.-
But the conversation about -
taxation is often a little bit -
too simple.-
Let's talk about what taxes can -
and should do.-
First, I think taxes are about -
investment.-
We invest in two things.-
We invest in the business -
development and we invest in -
people.-
I am here at the university of -
rochester medical center with -
Dr. Howard federoff's lab -
looking at your tax dollars at -
work.-
Your tax dollars, federal, -
state, and local, have helped -
support the university and help -
make the university a center of -
innovation in many different -
areas.-
It's no accident that colleges -
and universities in the United -
States and in New York are among-
the best in the world.-
The best in the world.-
The most scientific -
breakthroughs, science and -
technology, happen here in the -
United States, New York, and -
here in rochester.-
Those tax dollars are investing -
in new business and growth.-
And that's exciting.-
We also want to invest in -
people.-
One of the ways to invest in -
people is in primary and -
secondary education.-
About 45% of local taxes -
gathered in monroe county go to -
primary and secondary -
education.-
And primary and secondary -
education is our very best -
anti-poverty program.-
We also invest in helping people-
become Independent and become -
part of the mainstream -
economy.-
For example, suppose we are -
talking about a mom who has been-
on welfare getting assistance -
from the tanf program.-
Suppose she gets a job, but she -
has very little job experience -
and relatively low economic -
credentials.-
She's probably going to end up -
with a job at minimum wage.-
Now out of a minimum wage job -
you can't get job training.-
And day care and -
transportation.-
So through the welfare reform -
act, we've started moving money -
from the cash assistance to -
supporting people so they can -
become Independent and we become-
part of the mainstream -
economy.-
So taxes, we don't like -
taxes.-
Taxes should be lower and can be-
lower, but nonetheless, we have -
to use them very wisely.-
Let's remember we are -
stockholders of the state of New-
York and monroe county.-
Elected officials work for -
us.-
It's not the other way -
around.-
We want to make sure that our -
taxes are competitive and also -
that we're using our tax dollars-
wisely.-
-
>> Now is your chance to get in the conversation.-
Call us at 454-6300.-
Again, I get the first question.-
Kent, how are you?-
-
>> Good evening.-
-
>> If New York state is such a high-tax state, how could
it not
be in the best interest of this economy to bite the bullet,
slash taxes, slash spending, take the pain of the spending
cut.-
-
>> I think we do need to take the pain of the spending
cut.-
The point is where.-
We are talking about money that the public sector invests in
the economy.-
We can invest in job creation.-
We can invest in human capital.-
That the is the goal.-
If we are going to cut taxes, let us be careful where we cut
taxes.-
We have to cut taxes I think to be competitive in New York
state.-
The question is, where do we cut them?-
What do we pay for and not pay for?-
-
>> Mark from rochester, are you with us?-
-
>> Yes, sir.-
-
>> Ask your question, sir.-
-
>> Well, it is obvious New York state is highest in medicaid,
welfare, educational spending.-
I think everybody understands that.-
But when you take a look at the jobs, besides the jobs going
overseas because of the the world trade deal, some jobs are
going south.-
Some of the best educated people we have under 30, that we paid
for in our tax dollars, they are going to raleigh, North
Carolina.-
They are going to lower-tax states.-
It is no use educate people for jobs that don't exist.-
-
>> Kent, would you comment on this?-
-
>> I think we educate people because an educated workforce
is
one of the best inducements of industrial recruitment.-
If a firm is coming to rochester, the first question they
really ask is what the is quality of the labor force?-
Who can I hire.-
-
>> The irony he is saying is we have this great education
system and they leave.-
So what are we teaching them?-
Why are we teaching them?-
-
>> A lot of them do stay.-
Not all of them go.-
We have an export industry.-
We recruit people from out of the state.-
They spend their money.-
The university of rochester gets a lot of money from people
who
live out of state.-
They spend their money in rochester.-
If they go and take their education with them, it is not all
bad.-
-
>> Robert from Irondequoit, are you with us?-
-
>> Yes, I am.-
-
>> Please, ask your question.-
-
>> The real villain is probably Kodak.-
They cut thousands and thousands of people.-
They are greedy.-
They are sending the factories abroad in China and all over
the
place.-
The job loss is there.-
Plus the fact that five or six years ago Kodak used a lot of
our machine shops, our various small businesses to furnish them
with goods.-
So when Kodak leaves, all of these little businesses, these
little machine shops crash down.-
So Kodak is the real villain.-
-
>> Well, let me ask it this way.-
And I think I know what he is getting at.-
It was in the news today.-
For sure.-
The whole thing with Kodak is in the news.-
Is that a bigger villain, sending jobs overseas, the bigger
thing we should fear than the tax rates that have been a
constant in New York?-
-
>> I think the tax rates are part of the problem.-
The fact that we have an uncompetitive infrastructure is part
of the problem.-
Kodak and other companies have fierce competition from other
companies.-
They have to react to survive.-
Kodak is responsible for making it possible for the communities
to transition for a community that is dependent on Kodak to
a
community that is shrinking for reasons out of its control.-
-
>> We have larry from brighton.-
Ask your question, larry.-
-
>> Basically my question is, it has been shown in the
past that
the rochester and monroe county area sent a lot of money to
state and federal governments, but we never get our share
back.-
How come this doesn't happen and why can't we get our share
back?-
-
>> We have seen a lot of discussion on we don't get our
fair
share.-
Daniel Patrick moynihan made that point.-
What is going on there?-
-
>> Within the state of New York, we did a study in the
mid
1990's, looking how the metropolitan areas sent tax money to
albany.-
Rochester does send a little bit more than we get back, but
not
very much.-
Buffalo gets more back than they send.-
Syracuse tends to get more.-
New York City, surprisingly enough, we tend to think of New
York as a villain.-
New York actually breaks even.-
They send a little more to albany than they get back.-
It is a huge supplement to upstate.-
-
>> What is the reason that rochester seems to not getS
much
back -- get as much back?-
-
>> Some people would argue that we don't have a community
that
works together to hustle albany for goodies.-
People in rochester say, look at the Buffalo delegation.-
They know how to put the hand on the state legislature.-
Let's turn our attention to kathy.-
I want to ask julio Lora, the director of the housing council.-
What is your opinion?-
-
>> It essentially seemed to me, because as a young
professional, I have had so many people move away from the
area.-
The two biggest complaints are the taxes and the weather.-
There is nothing we can do about the weather.-
I'm interested in this conversation because I feel something
has to be done.-
They did an article in the paper that says people don't mind
taxes.-
You have to ask people to rally, who have moved to Arizona and
to Florida and find why they left.-
I hate to say it, but I think a lot of them would respond it
is
the high taxes in the area-
>> So do you agree with governor pataki, it is either
taxes or
jobs in our state?-
-
>> I also have to say that as someone who lived in Florida
for
a long time, I appreciate the services we have in this state.-
We have to find creative ways of trimming the economy.-
I mean, I'm sorry, the budgets and the government spending,
but
trying to keep some of the services.-
I know that is a harm formula to come up with.-
-
>> It gets complicated especially when people are representing
a certain group, education, medicaid, and they don't want their
services cut.-
-
>> We want to all see our services as the important.-
I want to talk to Miriam Zinter.-
You are someone who has started her business within the last
four years.-
What have you seen personally and what is your take on these
perspectives?-
-
>> I seem almost as if I'm skidge friendic.-
Starting a -- have skidge friend yeah.-
There are a lot of problems and services available for people
starting businesses.-
I haven't taken advantage of any of those.-
I know they are out there and aim grateful there are there in
case I need them.-
There are other monsters other than taxes that are greater for
my business.-
The cost for liability insurance are huge because people say
you haven't lived in the 21st century until you have been
sued.-
Which is a sad statement.-
As far as taxes from a standpoint of a mother, I think
sometimes you get what you pay for.-
I do feel we are paying at the higher end.-
I think our schools are excellent.-
I'm appreciative of the services we have.-
I do think we can come to a balance.-
I find it ironic that some businesses saying we are being taxed
too high.-
We have to move away, are the greatest expecters of tax
benefits, programs, tax cuts, all kinds of incentives given
to
them through the taxes of smaller businesses and hard-working
individuals.-
-
>> You told me that you have friends that moved out of
rochester to a different state and have since come back.-
-
>>> I have three friends, one moved to Virginia, one
to
Atlanta, Georgia.-
They moved with young children and the school systems were
inferior and inadequate compared to what they left in
rochester.-
They have all since moved back.-
Realizing that maybe their lifestyle won't be as upscale, their
houses are smaller, their kids have a far better education than
down south.-
-
>> Mr. Richardson, a businessman from parma, tell me about
your
verdict?-
-
>> I think they both made some good points.-
I would agree completely with Jean Kase that medicaid and
education are two areas that New York state spends too much
money on.-
That is a fact and has been benchmarked by many studies by the
business Cowan council.-
The d.n.c. quoted the education council.-
We pay more per student in New York than any other state in
the
nation.-
-
>> Part of that, wouldn't you say, is about New York City?-
-
>> I know a little bit about that.-
New York City as a lower per capita education cost than the
city of rochester.-
Kent Gardner pointed that out.-
We think downstate is a drain on our economy.-
It isn't.-
It is close to a balance.-
The fact is how can other large cities like Houston, los
angeles, Chicago, they seem to know how to educate their
children with about equivalent amounts of money as New York
City, but we are still not getting the great results.-
Rochester is playing about $11,500 per student.-
Our results don't come up with a $11,500 value.-
Let's be honest about this.-
If we are going to make businesses and people stay in this
community, we need to deliver excellent services.-
People are looking for quality of life.-
-
>> Do you think spending can be cut and taxes can be lowered
simultaneously then?-
-
>> Yes, I do.-
I don't pretend to have the answers.-
But what has happened, we constantly debate these issues and
never get to the hard policy discussions that other states
have, in fact, done a better job.-
I criticize New York state, our leaders in albany, for not
putting together blue-ribbon committees to look and develop
papers on issues.-
Joe bruno is doing that on medicaid.-
I operate with my father several nursing homes in monroe
county.-
Other facilities spend more money.-
No one up until right now has said, how are we going to spend
this $45 billion and get more bang for the buck and provide
more services and a higher quality of life as other states have
done.-
New York has not done that.-
-
>> I did a report recently on this.-
Most of the sales tax in monroe county is eaten up by
medicaid.-
A point well taken.-
Thank you.-
Mike?-
-
>> Thank you all for being here.-
In a political context, debates -
over taxes are usually done in -
sound bites.-
Our hope is that this discussion-
tonight gets you thinking about -
the complexity involved with -
collecting and spending our tax -
money.-
For more information on the -
fighting for rochester's future -
collaborative, please visit our -
websites -
www.democratandchronicle.com, -
www.wokr13.tv, or -
www.wxxi.org/ntk.-
Thanks for joining us.-
[captioning made possible by -
the U.S. Department of -
Education].-
-
captioned by the -
national captioning institute -