Crains New York - February 4, 2013 - (Page 11)
The secrets in the
guv’s pension plan
G
ov.Andrew Cuomo has a problem.Upstate cities,
counties and school boards are at wit’s end. A declining population,an economy that has been depressed for two decades, a cap on property taxes
and rising costs have put upstate’s local governments in severe financial distress. They want help—and they
need it now, not in the future, when maybe some of the governor’s economic initiatives will pay off.
So the governor says he wants to
reduce their pension burden.
Sounds simple. It’s not.
Mr. Cuomo’s rationale. Last year,
the governor forced the Legislature
to agree to a new, lower-cost pension plan for new state employees.
In about 10 years, this will produce
significant savings. The governor
says, Why wait? Let’s use some of
the savings now to reduce pension
contributions for local governments. They can pay more later,
presumably when their economies
are better.
The numbers. The figures are big.
Buffalo will save $19 million next
year; wealthy Westchester, $40 million. (The change affects every local
government outside New York
City.) The consequences are significant, too. New York boasted the
best-funded pension plan in the
country until last year, when it
GREG DAVID
dropped to No. 5 on the Pew Center on the States survey. That’s still
good, but the governor is willing to
accept a less well-funded plan that
could be only about average.
The alternatives. Are there any alternatives? Hard-pressed state and
local governments have been clam-
STEVE HINDY
Don’t ignore need
for industrial space
I
recently got a call from Eric Manigian, a woodworker
based in Dumbo, Brooklyn, who made a lovely kitchen
table for us a few years ago. Eric makes beautiful furniture out of choice hardwoods like oak, maple and
mahogany. I like that it’s “Made in Brooklyn,” too.
But the Pratt Institute alumnus did not have good news. He
was losing his lease in a mixed-use building, where he has been
since the mid-’90s. He asked if I knew of any space in Brooklyn
where he could relocate.
I referred him to the Brooklyn
Navy Yard, which has become a
refuge for small businesses of all
kinds. More than 300 firms are
there, employing more than 6,000
workers. At the moment, though,
there is no room for Eric’s firm or
150 others waiting to get in, according to Navy Yard President Andrew
Kimball.
Eric’s plight should be of concern
to the next mayor of New York City.
The outer boroughs are teeming
with entrepreneurs like Eric, many
with interests in the tech world or in
food and beverage startups.
We hear a lot about the city’s
need for affordable housing, but less
about its shortage of affordable industrial space. These deficits are, of
course, closely related. Industrial
jobs, which pay 25% to 40% more
than retail jobs, reduce the demand
for subsidized housing.
Some private developers are trying to address this. The Pfizer project in Bedford-Stuyvesant and Federal Building No. 2 in Sunset Park
come to mind.The city needs to encourage projects like these with zoning protections, tax incentives and
infrastructure support. It also needs
more city-owned industrial enclaves
like the Navy Yard.
The Bloomberg administration
oring for mandate relief, a vague
term for requirements imposed by
the state without any money to pay
for them.
The conservative Empire Center
and many local officials have been
crusading for a push to reform the
Triborough Amendment, which
keeps labor contracts in place after
they expire, tilting all negotiations
in favor of public-sector unions.
Groups like the Citizens Budget
Commission have outlined how to
provide significant savings in special
education, a crushing burden on
many schools, without hurting
children.
The governor proposed a tweak
to the labor arbitration process, but
nothing that would amount to
much. And, sure, Triborough reform would be difficult. So was getting a property-tax cap and closing
a $10 billion budget gap in Mr.
Cuomo’s first year without a tax increase. Ditto for special ed.
The politics. The key dates here are
2014 and 2016. Although the governor is likely to cruise to a big reelection victory in 2014, he doesn’t
want to take any chances. So although he took on the public-sector
labor unions in his first two years in
office, he wants to make peace. And
there is always 2016, if Hillary Clinton decides not to run for president.
No Democrat will be nominated in
2016 against the determined opposition of those unions.
The bottom line: The pension
scheme is a bad idea. It should be rejected, and then Mr. Cuomo can
work on something better.
did establish Industrial Business
Zones, but they have not met the
demand for industrial space. The
IBZs allow commercial businesses
like hotels, banks, supermarkets and
short-term storage. These kinds of
businesses pay much higher rents
than industrial tenants. That makes
it difficult for industrial businesses
to afford space in the IBZs.
The Navy Yard, an industrial enclave dedicated to businesses like
Eric’s,is adding 2 million square feet
of space, including a new green
manufacturing complex, in the next
couple of years. But the city needs
another industrial park like it, perhaps in the Bronx or Queens. There
are plenty of undeveloped brownfields in those boroughs that would
be suitable for such a development.
Many of the 150 companies on
the Navy Yard waiting list are small
“creative class” firms like Eric the
woodworker’s. But who can say one
of them won’t be the next big thing?
Caleb Crye, who designs and manufactures bulletproof vests and helmets for the U.S.military,had no experience in the military or in
manufacturing, but he saw a need
and developed a business. Crye Precision, located in the Navy Yard, today employs more than 100 people.
There will be more success
stories if the city helps small businesses find affordable space.
Steve Hindy is co-founder and president of
Brooklyn Brewery.
February 4, 2013 | Crain’s New York Business | 11
http://www.crainsnewyork.com/events-GOPrace
Table of Contents for the Digital Edition of Crains New York - February 4, 2013
THE INSIDER
ALAIR TOWNSEND
IN THE BOROUGHS
IN THE MARKETS
BUSINESS PEOPLE
OPINION
GREG DAVID
DIGITAL NY
SMALL BUSINESS
REPORT: HEALTH CARE
THE LIST
CLASSIFIEDS
REAL ESTATE DEALS
SOURCE LUNCH
OUT AND ABOUT
SNAPS
Crains New York - February 4, 2013
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130812
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130729
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130722
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130715
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130708
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130624
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130617
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130610
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130603
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130527
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130520
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130513
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130506
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130429
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130422
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130415
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130408
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130401
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130325
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130318
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130311
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130304
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130225
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130218
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130211
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130204
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130128
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130121
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130114
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130107
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121224
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121217
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121210
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121203
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121203_v2
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121126
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121119
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121112
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121105
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121029
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121022
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121015
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121008
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121001
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120924
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120917
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120910_v2
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120910
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120827
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120820
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120813
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120806
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120806_v2
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120730
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120723
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120716
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120709
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120625
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120618
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120611
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120604
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120528
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120521
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120514
https://www.nxtbook.com/nxtbooks/crainsnewyork/nxtd
https://www.nxtbookmedia.com