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SYRACUSE — The Syracuse University (SU) Kauffman Entrepreneurship Engagement Fellows program has continued growing since its beginning three years ago. This year’s group totals 16 students, up from 10 a year earlier and just two in the program’s first year in 2009-2010. The students receive one year of tuition at the university and make a […]
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SYRACUSE — The Syracuse University (SU) Kauffman Entrepreneurship Engagement Fellows program has continued growing since its beginning three years ago.
This year’s group totals 16 students, up from 10 a year earlier and just two in the program’s first year in 2009-2010. The students receive one year of tuition at the university and make a commitment to stay in Central New York and start some sort of entrepreneurial venture.
Some end up growing companies here and providing real jobs, says Bruce Kingma, SU associate provost for entrepreneurship and innovation. Others use the experience as a springboard to local employment elsewhere.
The overall goal is to help some of SU’s best students grow roots in Central New York, Kingma says.
“This is helping,” he says. “We’re putting people in Syracuse that have offers elsewhere.”
The four fellows from the effort’s first two years all still live in Syracuse. The first group included a co-founder of BrandYourself.com, which recently attracted $1.2 million in investment and won the $200,000 grand prize in the 2011 Creative Core Emerging Business Competition.
The idea that entrepreneurship can be a valid path is catching on among students at SU, Kingma adds. It can provide a route to a living based around a passion or provide unique experience when applying for jobs at other companies.
The lackluster employment market is probably a contributing factor to the trend, but not the sole explanation, Kingma says.
“When you’re really engaged with experiential entrepreneurship, you simply find it more exciting,” he says.
Students often spend their entire college careers working on entrepreneurial projects, Kingma says, thanks to a combination of classes and programs like the Raymond von Dran Innovation and Disruptive Entrepreneurship Accelerator (IDEA), which aims to spark more student ventures. That leaves many of them with a desire to continue that work into a fifth year.
Kingma also notes that being an entrepreneur and working for another company aren’t mutually exclusive. Students often combine both successfully, he says.
This year’s fellows are working on projects including The Palette, an e-commerce site and mobile shop where SU students can promote and sell their art work, and Performance Driving School, which aims to teach proper driving rules, skills, and techniques combined with car-performance basics, according to SU. Other projects include Waterport, which is developing a portable and self-sustained rainwater-harvesting system to turn rain into drinking water in impoverished villages, and SocialU 101, a platform to help older individuals with social media.
The Engagement Fellows program was launched in 2009 by Imagining America, a national consortium of more than 80 colleges, and Enitiative, an SU-led project to spark more entrepreneurship and innovation in Central New York.
The Ewing Marion Kauffman Foundation supports the fellows program and funded the launch of Enitiative in 2007 with a
$3 million grant.
Excellus will keep local emphasis, CEO-elect says
Excellus BlueCross BlueShield will remain a regional company with work forces in various areas of New York, according to the CEO-elect of the health plan and its parent company. “We believe the local employment is good for our company,” says Christopher Booth, who is currently the president of Excellus, Central New York’s largest health insurer.
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Excellus BlueCross BlueShield will remain a regional company with work forces in various areas of New York, according to the CEO-elect of the health plan and its parent company.
“We believe the local employment is good for our company,” says Christopher Booth, who is currently the president of Excellus, Central New York’s largest health insurer. “People like to do business with their neighbors. I think it is the right thing to do for communities, and I think it is the right thing to do for our company.”
The Lifetime Healthcare Companies, which is the Rochester–based parent of Excellus, announced at the beginning of April that Booth will be its next CEO and the next CEO of Excellus. Booth will assume the CEO role after the not-for-profit group’s current CEO, David Klein, retires at the end of the year.
Excellus currently employs 950 people in Central New York. It employs 400 people in Utica and 30 in the Southern Tier. The Lifetime Healthcare Companies has more than 6,500 employees.
Booth first joined the Lifetime Healthcare Companies in 2004 as chief administrative officer and general counsel. He has also held the roles of executive vice president for commercial markets and health-care affairs as well as executive vice president and COO.
However, he was familiar with the company before joining it. Booth spent nearly two decades at Hinman Straub P.C., which is the Lifetime Healthcare Companies’ outside legal counsel in Albany.
Booth worked closely with the health insurer while at Hinman Straub. The chairman of the Lifetime Healthcare Companies board of directors, Randall Clark, called Booth the “architect of our entire corporation” in a statement announcing Booth’s selection as CEO in waiting.
“I was the person that sort of put together the mergers of the Blue plans from Syracuse, Utica, and Rochester, both from a legal structure and a regulatory-approval process,” Booth says. “And then I worked with the company on how it should operate. Both it and its subsidiaries.”
Booth says he will have to refresh his knowledge of some of the Lifetime Healthcare Companies’ subsidiaries as he prepares to take over as CEO, which will make him responsible for those subsidiaries. Currently, he is responsible solely for Excellus.
The Lifetime Healthcare Companies’ other subsidiaries include MedAmerica, which provides long-term care insurance to more than 122,000 national policyholders; Lifetime Health Medical Group, a provider of direct medical care for over 80,000 patients in the Buffalo and Rochester areas; and Lifetime Care Home Care and Hospice, which serves 22,000 people a year. Other subsidiaries include Sibley Nursing Personnel Services, which helps home-care patients and temporary medical-staffing clients in 31 New York counties; EBS-RMSCO, which offers employee-benefits and risk-management services for 4,000 U.S. employers; and Support Services Alliance, which offers employee-benefits services for 6,000 businesses and acts as a general agent for over 300 brokers.
“Some of those subsidiaries reported to me in the past,” Booth says. “I’m familiar with them, and I’ve had responsibility for them in the past.”
Excellus is reviewing its subsidiaries and their operations, Booth says. He declined to discuss specific plans for the future, however.
The 2010 Patient Protection and Affordable Care Act, the federal health-reform law, will be the main issue for the Excellus health plan moving forward, Booth says. The U.S. Supreme Court is expected to rule on that law’s constitutionality in June.
“We don’t know what the court’s going to do,” Booth says. “Our assumption is that the law is going to be in effect, and we have to be ready.”
Excellus is preparing to engage consumers in the new state health-insurance exchange called for in the federal law, Booth says. It is also trying to work with hospital systems and doctors to keep down health-care costs.
“People are very dissatisfied with the [price] increases year-to-year,” he says. “That needs to be the priority going forward. Some of that work we need to do as an insurance company. Some of that work providers need to do. Some of it needs to be done between insurance providers and community leaders.”
The Lifetime Healthcare Companies is a $6.2 billion not-for-profit organization that provides health insurance to more than 1.8 million people and sells long-term care coverage in all 50 states.
Survey: Major health-care plans’ costs to rise in lockstep
Different types of employer-provided health-insurance plans will increase in cost at virtually identical rates in 2012, according to a recent national survey from Buck Consultants, LLC. The National Health Care Trend Survey 2012, which the human-resources and benefits consulting firm Buck Consultants released April 5, projected that preferred-provider organization plans (PPO), point-of-service plans (POS), health-maintenance
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Different types of employer-provided health-insurance plans will increase in cost at virtually identical rates in 2012, according to a recent national survey from Buck Consultants, LLC.
The National Health Care Trend Survey 2012, which the human-resources and benefits consulting firm Buck Consultants released April 5, projected that preferred-provider organization plans (PPO), point-of-service plans (POS), health-maintenance organization plans (HMO), and high-deductible health plans (HDHP) will all increase in cost by nearly 10 percent this year.
Insurers use the cost-increase projections, or “trend factors,” to help calculate premium rates, according to Buck Consultants. The projections are not the same as planned premium increases, but they generally reflect pressures such as inflation, utilization of services, technology, mandated benefits, and changes in services.
This year’s survey shows that insurers are placing less emphasis on plan type when projecting cost increases, according to Daniel Levin, a principal in Buck Consultants’ health and productivity practice and a consulting actuary who directed the survey.
“Insurers see these as names of networks and not a delivery model,” he says. “They don’t feel confident that the differences are large enough to warrant using different trends.”
Buck Consultants recorded responses from 129 insurers and administrators for the survey, measuring their projected average annual increase in employer-provided health-care benefit costs. Survey respondents cover a total of about 109 million people, according to the consulting firm.
Health insurers operating in Central New York that responded to the survey include Aetna, UnitedHealthcare, and Excellus BlueCross BlueShield, the region’s largest health insurer. However, the survey did not include a regional breakdown of data.
The 9.9-percent cost increase projected across plan types in 2012 is lower than increases predicted in previous years.
In 2011, survey respondents predicted an 11.2-percent rise in medical PPO costs. They projected an 11-percent jump in medical POS costs.
Last year’s survey showed that insurers expected medical HMO costs to rise by 11 percent. And they predicted HDHP costs would increase by 11.1 percent in 2011.
Several factors may have helped hold down projected cost increases in 2012, according to the survey. They include consumers spending less on health care because of continued economic difficulties and insurers having a better grasp on anticipated costs caused by federal health-care reform mandates.
In addition, wellness programs and preventive care may be helping to hold down costs, according to Levin.
Prescription drug, dental, and vision trends
The Buck Consultants survey also looked at cost trends for prescription drugs, dental insurance, and vision insurance.
Health insurers projected a 9.6-percent increase in prescription-drug costs in 2012. That’s down from 10.7 percent in last year’s survey.
Pharmacy-benefit managers, which act as administrators for self-insured plans and insurance companies, predicted cost increases of just 4.6 percent in 2012, down from 6.1 percent in 2011.
Generics are probably causing the slowdown in projected drug costs, Levin says.
“We thought 10, 15 years ago, if you could get to 60 percent generic utilization, that is terrific,” he says. “Now we’re telling our clients at 71 percent that they can do better. They can get to 80 percent generic utilization.”
Insurers anticipate dental HMO costs will climb 4.9 percent in 2012, the survey found, on par with last year’s projected increase of 5 percent. They believe dental PPO costs will rise 5.6 percent, which is also in line with last year, when insurers predicted a 5.7 percent increase.
Survey respondents said that costs for scheduled vision services will rise by 2 percent in 2012, the same increase predicted in 2011. They expect other vision costs to climb by 3 percent, also identical to last year’s projections.
Buck Consultants employs more than 1,500 people worldwide. The consulting company is a subsidiary of Norwalk, Conn.–based Xerox (NYSE: XRX).
PSD joins Green Button Initiative
ITHACA — Performance Systems Development, an Ithaca–based provider of building performance software and services, has joined the White House-led Green Button Initiative. The White House last year called on industry to provide electricity consumers with easier access to their energy usage data via a green button on utility websites. Access to the information can help
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ITHACA — Performance Systems Development, an Ithaca–based provider of building performance software and services, has joined the White House-led Green Button Initiative.
The White House last year called on industry to provide electricity consumers with easier access to their energy usage data via a green button on utility websites. Access to the information can help consumers conserve energy and save money through new tools and services developed by third parties, according to PSD.
The company plans to offer Green Button energy data connections as part of its Building Performance Compass software.
“Easy and recurring access to energy information is critical to improve the success and efficiency of the energy efficiency industry,” Greg Thomas, CEO of PSD, said in a news release. “We applaud the White House for rapidly moving forward this voluntary standard. It will help building and homeowners make better decisions, help contractors and engineers improve their energy services, and help utilities improve the cost effectiveness of their programs.”
Thomas is also chairman of Efficiency First, a national building retrofit trade association.
Contact Tampone at ktampone@cnybj.com
Survey: Employer wellness programs on the rise
More employers are launching wellness programs, and the majority of organizations currently offering wellness initiatives are looking to invest in and expand them. That’s according to the 2011 Willis Health and Productivity Survey by Willis North America’s Human Capital Practice in Atlanta, a unit of global insurance broker Willis Group Holdings, plc (NYSE: WSH). The national survey found 60
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More employers are launching wellness programs, and the majority of organizations currently offering wellness initiatives are looking to invest in and expand them.
That’s according to the 2011 Willis Health and Productivity Survey by Willis North America’s Human Capital Practice in Atlanta, a unit of global insurance broker Willis Group Holdings, plc (NYSE: WSH).
The national survey found 60 percent of respondents indicated they have some type of wellness program, an increase of 13 percent from 2010. Willis also found 58 percent of employers with wellness programs already in place say they plan to expand their wellness plans with added programs or resources.
“Wellness programs continue to evolve and it is encouraging to see more organizations initiate programs despite economic pressures and continuing challenges in accurately measuring outcomes and results,” Jennifer C. Price, senior health-outcomes consultant in the Willis Human Capital Practice, said in a news release.
Additional key findings from the survey include:
– Of those organizations with a wellness program, 40 percent reported they have an “intermediate” program in place. The survey defined that as having established a wellness budget and providing some incentives for participation, in addition to offering the voluntary wellness activities of a basic plan.
– The most common types of wellness programs offered by survey respondents include: physical-activity programs (53 percent), tobacco-cessation programs (49 percent), and weight-management programs (45 percent).
– When asked about the leading barrier to measuring success of their wellness initiative, 43 percent of employers said it was the difficulty of determining the influence of wellness compared with other factors affecting health-care costs. Insufficient data and not enough staffing/time are other common barriers to measuring success.
The survey included a subset of questions that also asked employers about work/life balance programs. Findings reveal that 51 percent of respondents reported promoting work/life balance initiatives within their worksite-wellness program.
The survey found that helping employees achieve work/life balance is a significant concern of 18 percent of respondents, and somewhat of a concern of 54 percent of respondents. Flexible start/end times are the most common offering of work/life balance program options, reported by 81 percent of respondents.
Willis said it conducted the survey for the global business market, gathering information from 1,598 employers throughout several different industries, locations, and organizational sizes. It said 57 percent of the respondents had fewer than 1,000 employees and 42 percent had fewer than 500 workers. Willis conducted this survey through a web-based program.
EBRI: Consumer-driven health-plan enrollees are healthier, wealthier
People enrolled in “consumer-driven” health plans tend to have higher incomes, higher educational levels, and report better health behavior than do those enrolled in traditional health plans. But they are not younger. Those are just a few of the findings of a new report by the nonpartisan Employee Benefit Research Institute (EBRI) that examines trends
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People enrolled in “consumer-driven” health plans tend to have higher incomes, higher educational levels, and report better health behavior than do those enrolled in traditional health plans. But they are not younger. Those are just a few of the findings of a new report by the nonpartisan Employee Benefit Research Institute (EBRI) that examines trends over the 2005–2011 period.
Consumer-driven health plans (CDHPs) generally consist of high-deductible health plans (HDHP) paired with a health-reimbursement arrangement (HRA) or a health savings account (HSA). As of 2011, about 21 million individuals, representing about 12 percent of the market, were enrolled in a CDHP or an HSA-eligible health plan.
“Consumer-driven health plans are a growing presence in the health insurance market, so it’s important to understand how they differ from traditional health plans,” Paul Fronstin, author of the report and director of EBRI’s Health Research and Education Program, said in a news release. “It is often assumed that CDHP enrollees are more likely to be young than those with traditional coverage, because they use less health care, on average. However, in most years, the survey found that CDHP enrollees were less likely than those with traditional coverage to be between the ages of 21 and 34.”
Other major findings in the EBRI report, which examines the population enrolled in a CDHP and how it differs from the population with traditional health coverage, include:
Education: CDHP enrollees were about twice as likely as individuals with traditional coverage to have a college or post-graduate education. In 2011, 24 percent of CDHP enrollees had a graduate degree and 48 percent had a college degree, compared with 12 percent and 24 percent, respectively, of traditional plan enrollees.
Health: In six out of seven years of the survey, EBRI found that CDHP enrollees were more likely than traditional-plan enrollees to report excellent or very good health. CDHP enrollees were less likely to report that they smoke or did not exercise regularly, though it could not be determined from the survey whether plan design had an impact on those self-reported factors.
The full report is published in the April 2012 EBRI Notes, “Characteristics of the Population With Consumer-Driven and High-Deductible Health Plans, 2005–2011,” online at www.ebri.org.
EBRI says it’s a private, nonprofit research institute based in Washington, D.C., that focuses on health, savings, retirement, and economic-security issues. EBRI says it does not lobby or take policy positions.
New York Optometric opens location in Armory Square
SYRACUSE — A new branch of an optometric business has opened at 85 Walton St. in the Armory Square district. Lou Enzerillo, owner of New York Optometric, opened his second location in Syracuse on April 16. Enzerillo’s first store is at 116 E. Washginton St. He is calling the stores New York Optometric Downtown and
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SYRACUSE — A new branch of an optometric business has opened at 85 Walton St. in the Armory Square district. Lou Enzerillo, owner of New York Optometric, opened his second location in Syracuse on April 16. Enzerillo’s first store is at 116 E. Washginton St. He is calling the stores New York Optometric Downtown and New York Optometric Armory Square, respectively.
Enzerillo noted the reason he has launched another store, that is not much more than a five-minute walk from the first, has to do with the different areas of the city and different clients.
“I want to bring new things to the Armory Square location that currently can’t be found in Central New York. New specialty frame lines such as Lindberg, Lafont, and Salt.optics are eyeglass frames that differ from the traditional eyeglass standards,” he says.
The opportunity to lease the Walton Street location presented itself through a previous relationship with the building owner, Robert Ducette. Enzerillo signed the lease with Center Armory Associates LLC in December 2011. Terms of the lease were not disclosed.
“We did extensive renovating to the new site,” says Enzerillo, “all new lighting, new flooring, new plumbing (added a sink in the exam room), new paint (including a feature wall done by Jean Conte), and reworked the furniture/fixtures.” The cost of the renovations was not disclosed.
Thus far, Enzerillo has hired one additional, full-time person, optician Lisa Giocondo, for the new location. Later, staffing with depend upon the ebb and flow of the business. For the present time, he’s keeping the scheduling of his current employees flexible.
New York Optometric currently has three employees on East Washington Street, not including an optometrist who comes in two days a week, and one employee on Walton Street. Enzerillo will continue to spend the majority of his time on East Washington Street, but will keep his time flexible.
Startups That Shoot From the Hip, End Up Shooting Off Their Own Foot
Have you ever wondered how many times you have tried to do something half-way, only to discover that it would have been easier if done the right way from the very beginning? My daughter hates to read instructions. She will build a model or assemble a new toy by “intuition.” Sometimes she goes forward one
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Have you ever wondered how many times you have tried to do something half-way, only to discover that it would have been easier if done the right way from the very beginning?
My daughter hates to read instructions. She will build a model or assemble a new toy by “intuition.” Sometimes she goes forward one step and back two throughout the entire building process. Sometimes, she spends hours with no glitch until she gets to the end and has to take the entire project apart because she made one mistake early on. I can’t tell you how many times she has done this. Her particular affliction might be laziness, pride, or maybe she just likes the challenge and discovery of it all.
On the other hand, I am guilty of doing similar things due to being cheap. When I was 23 and bought my first house, I decided I would shovel the driveway instead of paying to have it plowed. A slipped disc and many blisters later, I learned that was not the most efficient choice. Later, I would build things instead of buying them. Each one ended up costing twice the money and 10 times as much time, along with the added insult (and monetary pain) of having to eventually buy the thing anyway.
The Small Business Administration (SBA) has done multiple studies that say approximately half of new businesses fail. I have also read dozens of top 10 lists outlining the reasons that new businesses fail. Every single item on those lists traces back to poor planning and preparation. Like me and my daughter, entrepreneurs jump into their startup idea and just start doing. Some do it because they are too lazy to plan and it’s just more fun to start shooting. Others know they have to plan but don’t know how to do it and are too cheap or broke to pay someone to help them. In a recent poll I distributed, 50 percent of the respondents said shooting from the hip cost them between $10,000 and $20,000, and some even more.
Most entrepreneurs go forward before thoroughly assessing their startup idea. How much has shooting from the hip cost them? Most likely it’s tens of thousands of dollars.
OK, so what do you do if you’re planning to launch a business?
Everyone always talks about “the business plan,” which is fine, as long as there actually is one. There are people you can hire to do a generic plan, software, templates, and millions of articles and advice. But the real value of a business plan is not the pretty spiral-bound report at the end. Sure, that is what you need to get a loan. But for purposes of really understanding your business and possibly gaining a venture-capital investment, the finished product is of little value.
It’s the process of doing the plan that provides the value. The only way to truly prepare to start a business correctly is to have a professional walk you through a feasibility study (psychographics, SWOT, competition, etc.) and force you to answer all the tough questions about your business. The questions you can’t answer are the most valuable. They will force you to do research and engage in the dreaded “gut check” where you are faced with a negative you didn’t want to know existed.
These are the questions that make you work harder and which raise the self-doubt needed to really give you an intimate understanding of your business and all the outside influences. You will know the six different things that can happen, the odds of each happening, and what to do for every one of them. You will be prepared for the things that pop up instead of being surprised. You will be calm and in control, instead of twisting your guts every night worrying. You will have the next closest thing to a crystal ball for your startup. Your funding package will be as bullet-proof as possible. You will be empowered in knowing exactly what to do and why you should do it. That is the power.
Efficiency and value
What the SBA studies don’t tell you about the failed businesses is that those entrepreneurs are typically destroyed both emotionally and financially with no insurance and a huge pile of debt. Our studies show that most waste between $20,000 and $40,000, plus months to years of wasted time “shooting from the hip” before they ultimately fail.
I had an interesting “debate” with a 40-time serial entrepreneur on LinkedIn last week. He responded in disagreement with my initial posting about how bad it is to shoot from the hip. To summarize our lengthy chat, he was basically saying that taking the whim and chance out of startups is both unrealistic and stifling to creativity and enthusiasm. He saw the process I described above as a bureaucratic waste of time.
I always say most fights and divorces are caused by misunderstandings. I clarified that my intent was not to stifle anything. A good feasibility study and business plan simply help entrepreneurs who don’t have the experience of someone who has done it 40 times, as my new friend had.
Most importantly, if the “doing” process is done in an educational way, the entrepreneurs emerge prepared for battle. They are trained to swat down objections with well-thought-out and articulate answers. Even if they get an objection they haven’t specifically trained for, their basic training kicks in and they are able to defend their business.
If these studies can prevent entrepreneurs from making one mistake without losing the lesson that mistake has taught them, then they have improved their chances, been better educated, and saved money. And ultimately, that’s the goal.
Eric Egeland is president of Capacity Consulting Inc., based in Sullivan County. He provides strategic consulting for multiple industries and has personally created 10 successful startups. Contact him at ericegeland@capacityconsultinginc.com
Maybe it’s my imagination, but we seem to have gotten awfully regal in this country. That’s what came to mind when I heard about the kafuffle over our Secretary of Defense. Leon Panetta has been flying home to California most weekends — on Air Force jets — costing taxpayers $32,000 per round trip. The Defense
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Maybe it’s my imagination, but we seem to have gotten awfully regal in this country. That’s what came to mind when I heard about the kafuffle over our Secretary of Defense. Leon Panetta has been flying home to California most weekends — on Air Force jets — costing taxpayers $32,000 per round trip.
The Defense Department says White House guys agreed to this when they hired him. “No, we didn’t!” the White House guys cry. You can imagine that nobody wants to admit to the deal.
Panetta says he just wants to visit his ranch and wife and family. Right. Here is a suggestion, Leon. If you want the job in Washington, how about you move your family to that area? And if you don’t want to do that, then pay for your own travel.
If you tell us you sacrifice the big bucks to take the low-paying secretary’s job, we agree. You do. So sacrifice, already. If you don’t want to sacrifice, take the big job in business and make millions. And don’t try to make us feel sorry for you for your low pay in government. You will sign book deals worth millions when you retire. And groups will pay you $30,000 to deliver glib speeches. And you already get a lot of perks that kings would envy.
Royal treatment is in vogue in Washington. As you know from reports of the Las Vegas bash by bigwigs from the General Services Administration. The top guys may go to jail for their theft from taxpayers. But do you really believe this is an isolated instance? And do you really believe this is the end of such gouging of taxpayers by top guys in government?
Seems to me that we could do with less of the royal treatment. From the president down.
A few years ago, I saw the president drive down a Manhattan street — with 37 cars and a handful of motorcycles. Yes, 37 cars. But wait. He also had helicopters whap-whapping overhead. And thousands of city cops who barricaded all the intersections, stopped all the cross-traffic for miles. Backed up tens of thousands of cars.
All for the president’s visit.
His limo-tanks were flown in, of course. Hundreds (at least) of Secret Service guys scoped out the route and building tops and manholes in advance. The other armored cars carried an army of security guys and tons of guns. When the president visits a small country, his entourage is bigger than its army. He could step out of his limo and declare we had successfully invaded and were taking over.
A simple trip to New York City costs several million bucks. That seems outrageous to me. I know, I know, we must protect him. And he might have to launch nuclear weapons at any moment. But it seems a bit over the top. The Brits and French send their leaders overseas without all this regal stuff. And those countries have nuclear weapons at the ready, just like us.
It might be nice once in a while to fake everybody out. Tell the world the president has gone to Camp David. Meanwhile, tuck him into a beat-up taxi for his trip to some dinner. He would be safe because nobody would know about it.
It would be good for him to experience what ordinary mortals do. (“Uhh, driver…is this what they call a traffic jam? I think I’ve read about those.”)
And it would save us millions of bucks per trip. Mind you, those New York City taxis can be pretty pricey.
From Tom…as in Morgan.
Tom Morgan writes about financial and other subjects from his home near Oneonta, in addition to his radio shows and new TV show. For more information about him, visit his website at www.tomasinmorgan.com
Our Region Takes a High-Risk Approach to Investing
Would you take the advice of a financial advisor who told you to invest in only two or three industries? The answer is — of course not. Most individuals, corporations and institutional investors realize the value of diversity within a portfolio. Yet, as a region, we seem to ignore this principle. The good news is
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Would you take the advice of a financial advisor who told you to invest in only two or three industries? The answer is — of course not. Most individuals, corporations and institutional investors realize the value of diversity within a portfolio. Yet, as a region, we seem to ignore this principle.
The good news is that we are seeing investment and expansion take place. According to a recent report in The Central New York Business Journal [March 9, 2012 CNY Construction Projects Special Report], there are more than 60 sizable construction projects throughout the area. No doubt, this is a notable indicator of growth.
But before jumping for joy, we need to look at the composition of this growth. Three-quarters of these projects are being built for institutions of higher learning, health-care facilities, governmental agencies, and various not-for-profit organizations. The remaining 25 percent is comprised of companies trying to generate a profit.
This is not merely a snapshot. The 2011 edition of this report revealed a virtually identical breakdown. Employment and job-growth statistics further corroborate this trend.
The fact that universities and health-care institutions are expanding should be of little surprise as “Eds and Meds” have long been seen as the shining sectors for our region. Yet, it is worth examining why these sectors are booming while so many other segments are lagging.
Are organizations in these segments of the economy better run and more solid financially? Or perhaps, based on market demand and demographics, these are the sectors that should be growing. Still, even if these assumptions are true, other factors need to be considered.
Those of us who operate businesses in New York State realize how hostile the environment can be for conducting business. Let’s be honest, our region’s de-facto investment policy is driven by a broad range of oppressive taxes that have a chilling effect on business growth. The 75 percent of the expansion projects, as mentioned above, were mostly being built for and funded by not-for-profit institutions. Of course, the notion that organizations with lesser tax burdens are better positioned for growth is hardly a revelation.
Make no mistake, I am not criticizing these components of our economy. I believe wholeheartedly that the health-care institutions along with the universities and colleges make a positive and significant impact on the quality of life within the region. They not only bring first rate-services to the populace, but also attract highly qualified professionals, provide good-paying jobs and add to the magnetism of the community.
The risk lies, however, in having a business community within a concentrated portfolio of industries. Being too heavily weighted in a narrow range of business sectors can be a formula for disaster — think of Detroit. As with personal investments, a diversified portfolio of economic engines will best create further opportunity for growth while mitigating the risks of an economy concentrated in too few industries.
Without a measurable change in New York State’s prohibitive tax and business policies, we will continue down this path. Last spring, Governor Cuomo said that businesses were leaving the state because of real-estate taxes being too high. He responded by putting forth a cap on property taxes.
This is not a solution. Limiting increases on taxes that are admittedly too high does not solve the problem. It is akin to having the homeowner whose house is engulfed in flames being told by the fire chief that the blaze will not get much worse. That is not enough — you have to put out the fire.
The other mistake the governor has made is the assumption that the problem comes solely from property taxes. The frosty business environment in New York stems from the total tax burden on business combined with workers’-compensation costs, funding public employee pensions at unsustainable levels, and an array of rules, regulations, and fees.
It is time for the governor and the state legislature to recognize the need for having a nurturing environment for all types of businesses. Creating an environment that fosters job growth across many sectors will produce a well-rounded and robust economy providing job security for all in the tax base. That’s a risk we can live with.
David H. Panasci is president of DHP Consulting, LLC in Camillus. Visit his website at www.dhpconsulting.com
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