Gov. Andrew Cuomo's proposal to reform workers' compensation and unemployment insurance will help cities and towns balance their budgets as they struggle with state limits on property tax increases, said New York State Transportation Commissioner Joan McDonald on Thursday.
"He knows the property tax cap needs to be dealt with," said McDonald, speaking at the Hudson Valley Gateway Chamber of Commerce in Peekskill a day after the governor delivered his State of the State address.
In his address, Cuomo said businesses in New York State would save $1.3 billion under his proposal, which he claimed would increase benefits for workers for the first time since 1999. He's expected to relay the details of the changes in his budget address Jan. 22.
The governor touted the proposal as a way of making the Empire State more business-friendly. "We must also reduce the crushing burden of unemployment insurance and workers' compensation," he said in his Wednesday speech.
But businesses wouldn't be the only beneficiaries of the reform, McDonald said. It also would help municipalities who need to pay workers' comp costs and unemployment insurance.
McDonald directed her comments to residents at the meeting who said they were discouraged not to hear the governor say anything in his speech about how he would alter state laws that cap property taxes hikes to 2 percent without voter approval.
Because costs continue to outpace the limits, the tax limits often force local officials to slash other services not mandated by the state, like pension contributions and health care.
"We have to cut teachers and make classes larger," said Stacey Tompkins, who sits on the Putnam Valley Budget Advisory Committee. "How is that helping education? The number we have to cut to make the 2 percent tax cap is mind-boggling."
Peekskill Mayor Mary Foster, a Democrat, said the governor also needed to review labor laws that make it impossible to trim personnel bills short of shedding workers. "It puts you in a position where all you can do is lay off people to control costs," Foster said.
Croton-on-Hudson auto dealer Lou Giordano said he welcomed the governor's reforms.
Giordano said he has been forced to pay higher workers' comp fees even though no one has been injured in his business for years. And he has seen laid-off employees refuse to take their jobs back because they can make more money receiving an unemployment check while working odd jobs on the side.
"They are all noble systems," Giordano said. "[But] they are rife with fraud."