INSIDE THIS ISSUE

1 A Message from the Comptroller

2 Remembering Labor Leader Inez McCormack

3 Labor Profile: Stuart Appelbaum

3 IDA Oversight Legislation Passes; DiNapoli’s IDA Reports Showed Need for Reform

4 Audit: State Advertising Campaign Lacks Tangible Results

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NEW YORKLABOR

New York State Comptroller

THOMAS P. DiNAPOLI

Welcome to the summer edition of Labor New York.

The long and continuing struggle by working men and women to secure fair pay, reasonable hours, good benefits, safe working conditions and a chance to build a better life for the next generation has been one of the driving forces in modern history. The labor movement has drawn on the efforts of countless heroes — some world-famous, some known only to their closest associates — to advance the common good and expand our sense of what is possible.

The gains achieved since the first unions were created have been impressive. There was a time when the 40-hour work week and basic safety precautions seemed like pie in the sky. Nonetheless, we all know that challenges remain, both to preserve these gains and to create better opportunities in the future. In facing these challenges, it’s good to take inspiration from the heroes who have led us this far. We recently remembered one such hero, Inez McCormack of Northern Ireland, whose courage, vision and persistence made a tremendous difference to working families. Honoring our past can help us move forward.

I hope you enjoy the stories inside, and I wish you all a safe, relaxing and prosperous summer.

SUMMER | 2015

A MESSAGE FROM THE COMPTROLLER

NYSUT President Karen Magee applauds as Comptroller DiNapoli speaks at NYSUT’s 42nd Annual

Representative Assembly.

Comptroller DiNapoli honors TWU Local 100’s Secretary-Treasurer

Earl Phillips at the Comptroller’s Caribbean Heritage Month Reception.

110 State Street Albany, NY 12236

518-474-4044

Office of theState Comptroller

LABOR NEW YORK

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REMEMBERING LABOR LEADER INEZ McCORMACKThe documentary, Inez McCormack: A Challenging Woman, provides an overview of McCormack’s career as a union organizer, activist and human rights leader, and includes footage from her interview with filmmaker Susan McKay as

she battled terminal cancer in 2012. Members of the labor community joined in a discussion of the film and of McCormack’s legacy, praising her fighting spirit, her compassion, her strategic creativity and her inspiring example.

Comptroller DiNapoli co-hosted a screening of a documentary about the renowned labor leader and human rights activist from Northern Ireland, Inez McCormack, at the headquarters of 1199SEIU in New York City this April. The first female president of the Irish Congress of Trade Unions, McCormack made sure that strong equality provisions were included in the historic Good Friday Agreements, supported the MacBride Principles for fair employment, and founded Participation and the Practice of Rights, a Belfast-based human rights organization.

Comptroller DiNapoli addresses the New York State Firefighters

Legislative Conference.

Comptroller DiNapoli addressing the Police Conference of New York (PCNY) in Albany. Also pictured is PCNY President Richard Wells.

The Office of the State Comptroller’s Office of Unclaimed Funds (OUF) continues to expand its efforts to raise public awareness about the State’s $14 billion in unclaimed funds. Comptroller DiNapoli significantly stepped up OUF’s outreach efforts by: launching a program alerting local governments to search for lost funds and holding a live telethon; working with the media, State and national associations and community organizations to raise public awareness; and improving online and telephone technologies to deliver better customer service and results. And now, you can use one of the self-help kiosks (pictured here) to search the database.

FINDING OUT IF ANY OF THE $14 BILLION IN UNCLAIMED MONEY IS YOURS JUST GOT EASIER

As President of the Retail, Wholesale and Department Store Union (RWDSU) since 1998, Stuart Appelbaum is an influential labor leader in New York State and nationwide. Appelbaum also serves as an Executive Vice-President of the 1.3 million member United Food and Commercial Workers International Union. Now in his fifth term as president, he previously served as the RWDSU’s International Secretary-Treasurer, Vice-President, Executive Board Member, Assistant to the President and Coordinator of Special Projects.A graduate of Brandeis University and Harvard Law School, Stuart Appelbaum first became involved in the labor movement because he recognized that organizing people for change was the best way to end injustice. He worked with the Michigan State AFL-CIO prior to joining RWDSU.During Appelbaum’s tenure as RWDSU President, the union has secured contracts for retail and other workers that have raised industry standards for scheduling, wages, benefits and job protections. Forging strong alliances with progressive, civil rights, immigrant rights, faith-based and LGBT organizations, Appelbaum has championed a new way of organizing for economic and social justice by giving a strong union voice to many of the most vulnerable workers.

SUMMER 2015

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LABOR PROFILE: STUART APPELBAUM

Comptroller DiNapoli with Stuart Appelbaum, President of the Retail, Wholesale,

and Department Store Union.

in payments-in-lieu of taxes (PILOTs), leaving the total net exemptions for the year at $660 million — an increase of $105 million, or 19 percent, from 2012. The recently passed legislation to reform IDAs is structured around five key components: a standardized application; uniform evaluation criteria; a uniform project agreement; annual assessments of IDA projects; and policies to enable IDAs to recapture benefits provided if projects fail to meet their performance goals.Commenting on the recently passed legislation, DiNapoli said, “The importance of economic development in our State demanded that we come up with better methods to evaluate IDAs and the projects that are receiving tax breaks. By increasing scrutiny of IDA project applications and requiring project agreements to include the recapture of benefits if job creation goals are not met, we can address many of the concerns raised in audits by my office over the years. Equally important, these new oversight and accountability measures will also help improve the efficiency and transparency of the operations of our IDAs.” The legislation will now be sent to the Governor for his signature. The IDA report is available on the Comptroller’s website at osc.state.ny.us/localgov/pubs/research/ida_reports/2015/idaperformance.pdf.

Following the release of Comptroller DiNapoli’s Eighth Annual Report on the performance of New York’s Industrial Development Agencies (IDAs), the State Legislature overwhelmingly passed legislation to help improve the efficiency, transparency and operations of IDAs throughout the State. Industrial development agencies were created to help attract, retain and expand business within the

communities they serve. However, over the past eight years, DiNapoli’s office has found a slowing of job growth and an increase in the total tax exemptions provided by IDAs. DiNapoli’s latest report showed that IDAs provided $660 million in net tax exemptions in 2013, up $105 million from 2012, while estimated job gains were nearly 23,000 lower than the previous year. In 2013, the most recent full year of data available, IDA projects reported a total of 644,080 full-time jobs, which reflects an increase of 199,943 jobs over the life of these projects, at a median cost of $2,095 per job gained. In 2012, cumulative job gains had equaled 222,645 with a median cost per job gained of $1,967. Despite this weakening growth in jobs, the State’s 109 active IDAs provided $1.38 billion in total tax exemptions in 2013. These exemptions were partially offset by $723 million

IDA OVERSIGHT LEGISLATION PASSES; DiNAPOLI’S IDA REPORTS SHOWED NEED FOR REFORM

Following a terrible 2013 tragedy in which 1,000 workers were killed in the Rana Plaza factory collapse in Dhaka, Bangladesh, Comptroller Tom DiNapoli travelled with Mr. Appelbaum and a delegation to Bangladesh on a fact-finding mission to assess working conditions in that country. Appelbaum and DiNapoli met with family members of those killed in the factory collapse,

government officials, and officials from the clothing retailer H&M, which had signed on to agreements to raise the standards for garment workers in that country.In 2010, Appelbaum oversaw the successful strike at Mott’s Applesauce in upstate New York, a strike that generated national attention for the RWDSU and led to a strong new contract with wage hikes and benefit increases for more than 300 RWDSU members at Mott’s. The union also played a key role in the passage of living wage legislation in New York City in 2012.

Stuart Appelbaum is a Vice-President of the national AFL-CIO, the New York State AFL-CIO and the New York City Central Labor Council. He is also president of the Jewish Labor Committee, and a senior advisor to the UFCW’s LGBT constituency group, OUTreach. Known as an outspoken critic of the growing income inequality in our country, Appelbaum continues to fight for social and economic justice for all.

LABOR NEW YORK

Labor New York is produced quarterly by the Office of the State Comptroller’s Division of Intergovernmental & Community Affairs in cooperation with other OSC divisions and offices. It is intended to present information in a nontechnical way and is not intended to be a legal interpretation

of government relations and policies. Mention of a product, service or company does not constitute an endorsement.

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Labor New York is produced quarterly by the Office of the State Comptroller’s Division of Intergovernmental & Community Affairs in cooperation with other OSC divisions and offices. It is intended to present information in a nontechnical way and is not intended to be a legal interpretation

of government relations and policies. Mention of a product, service or company does not constitute an endorsement.

In an audit report released in May, the Office of the State Comptroller found that Empire State Development (ESD) did not effectively quantify and assess the outcomes of its marketing campaign to promote the State. In 2011, ESD awarded a $50 million contract to a full-service advertising agency, BBDO USA, to encourage business investment and tourism in New York. By September 2014, the contract had been amended four times and increased to a total of $211.5 million, with spending allocated to Start-Up NY, tourism, Taste NY and the Masterbrand initiative, as well as $36.5 million devoted to highlighting the State’s recovery from Superstorm Sandy.Auditors found that ESD did receive the contracted services at a fair price, and did make efforts to monitor the services provided (i.e., outputs). However, ESD “did not quantify what it expected to achieve,” except in the broadest terms, and therefore did not successfully monitor results, such as increased employment (outcomes). As Comptroller DiNapoli remarked, “When government spends hundreds of millions of dollars to send a message that New York is a place to visit and is open for business, it should have clear objectives and show the public actual results. ESD’s attempts to measure the results of this advertising campaign were weak at best, leaving real questions about whether the results justify the costs.”Although ESD has indicated an intention to include performance measurements in future contracts, ESD officials largely defended their approach, emphasizing that the campaign was intended to burnish the New York “brand” by changing perceptions of the State, and would only indirectly lead to investment, jobs and increased tourism.However, as the audit report shows, even within this limited sphere, ESD’s self-assessment appears insufficient. For example, some 40 percent ($45 million) of the total advertising

AUDIT: STATE ADVERTISING CAMPAIGN LACKS TANGIBLE RESULTSbudget was devoted to the new Start-Up NY program in the year following its creation in October 2013. Applications by interested businesses soared in the first months of the program, peaking at over 5,000 in January 2014, but then fell sharply to around 500 in June 2014. Despite this decline, ESD allocated more and more funding to advertising Start-Up NY.

Without some more robust and precise way of measuring results, ESD cannot tell if the money was well spent or would be better deployed elsewhere. By the end of the audit fieldwork,

ESD had received pledges from 41 businesses to create a total of 1,750 jobs over five years.Similarly, ESD did track attendance at certain major tourist attractions featured in its I Love NY tourism campaign. Unfortunately, it did not attempt to distinguish between the effects of advertising and other factors. Thus, the Baseball Hall of Fame saw an encouraging 17 percent boost in attendance from 2013 to 2014, but some part of that increase may be attributable to the fact that there were no living inductees to the Hall in 2013, while the class of 2014 included several popular and recent figures such as former Yankees manager Joe Torre. More rigorous monitoring and analysis are needed to determine the effectiveness of ESD’s advertising.DiNapoli has emphasized ESD’s crucial role as New York’s lead economic development agency, and his auditors are now examining the Excelsior Jobs program. The Comptroller’s comment on a February 2015 profile of ESD applies to this recent audit as well: “New York State spends hundreds of millions of dollars each year to spur economic development and job creation...New Yorkers deserve more thorough accounting about whether these programs are achieving desired results.”

“New York State spends hundreds of millions of dollars each year to spur economic development and job creation... New Yorkers deserve more thorough accounting about whether these programs are achieving desired results.”

New York State Comptroller Thomas P. DiNapoli

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Thomas P. DiNapoli, State Comptroller 110 State Street, Albany, NY 12236

Email: kmccormack@osc.state.ny.us Phone: 518-473-8409

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