Business leaders try to gauge what Trump presidency means for Westchester economy

By Ryan Deffenbaugh

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With President-elect Donald Trump set to take office as the 45th president of the U.S. in January, business leaders in Westchester and the Hudson Valley are still waiting to hear more about what to expect from his administration.

The Business Journal interviewed several businesses and industry groups to gauge the intitial reactions to Trump’s incoming administration on several key issues.

Health care

With Trump in office and a Republican-controlled Congress that has already voted to repeal the Affordable Care Act dozens of times, at least some changes are likely in store for President Barack Obama’s signature health care law. Trump pointed to insurance premiums on midlevel plans rising by an average of 25 percent as reason enough to repeal the law. While he has released a plan for its replacement that involves health savings accounts, selling health insurance across state lines and allowing individuals to deduct health expenses, experts in the health care field are still waiting to hear more on what to expect.

Uncertainty in the health care industry is hardly new, according to Kevin Dahill, president and CEO of the Northern Metropolitan Hospital Association. NorMet represents 14 hospitals in Westchester and 29 in all across the Hudson Valley.

“Health care policy in this country does shift with political winds and it has for years, and that’s what can make it a difficult industry to operate in,” Dahill said.

Dahill said he has noticed some moderation of Trump’s campaign views since he was elected, including an interview where he said he will consider leaving provisions of the Affordable Care Act that prohibit insurers from denying coverage to a patient because of pre-existing conditions, along with a provision that allows parents to keep their children on their plans until they are 26.

“It looks like now there will be a little bit more of a moderate approach,” he said. “I for one don’t think they will take insurance from 20 million people on the federal level, and in New York State it’s 2.8 million. I don’t see a scenario where they revoke that coverage.”

But Dahill said he could see a scenario where incentives for purchasing insurance or federal subsidies for insurance are changed.

trump Donald Trump in his Manhattan office. Photo by Bob Rozycki

“The fundamental issue they have to confront, what didn’t work in the ACA, is that the risk pool wasn’t expanded sufficiently,” Dahill said. “So a lot of young people, otherwise healthy people, just ignored the penalty to get them to sign up (for insurance), so we’re seeing all these premium increases because the people who did sign up were people with medical issues.”

The higher costs of insuring sick people, without healthier clients to make up the loss, created the premium increases we are seeing now, Dahill said, adding that any changes to health care will need to address incentives for healthy people to get coverage.

Dahill said he will be paying attention to appointments at the Centers for Medicare and Medicaid Services and Health and Human Services. “When those appointments are made, we’ll be in a better position to make our voices heard and to better know what direction things might be going in,” he said.

Immigration

The harshest rhetoric of Trump’s campaign focused on immigration. He announced his candidacy by saying Mexico was sending drugs, guns and rapists over the border and made a campaign slogan out of a plan to build a wall along the border with Mexico. In his first post-election interview with “60 Minutes,” he pledged to deport 3 million undocumented immigrants he says have committed crimes, down from the number of 11 million undocumented he discussed deporting in his campaign. Either way, a crackdown on illegal immigration is likely to have economic impacts in Westchester as well as the rest of the country.

“Immigrants are very engaged in the workforce,” said Graciela Heymann, executive director of the Westchester Hispanic Coalition. “There are some industries in Westchester that, like the rest of the country, depend on immigrant and undocumented immigrants, so from construction to restaurants to car washes to nannies to landscapers, it’s the real backbone.”

A study released this month by state Comptroller Thomas P. DiNapoli found that immigrants represent 22 percent of the state’s population and have a high rate of employment, especially in the Hudson Valley, which has the highest labor force participation rate among its immigrant population at 70 percent. The Pew Research Center found that undocumented immigrants make up about 5 percent of the civilian labor force, focused especially in the agriculture, hospitality and construction industries.

New York has about 850,000 undocumented immigrants, according to numbers kept by the Migration Policy Institute. The number in Westchester is about 60,000.

Heymann said the Westchester Hispanic Coalition has seen a record demand for its immigrant legal services during the election, including a wait list of 200 people for naturalization services.

She said she hopes Trump, once in office, will rethink what he has said on immigration and put together a task force to fully measure the impact of both legal and undocumented immigrants before pursuing any action.

“It’s very easy to have a knee-jerk reaction to these things,” Heymann said. “It’s much harder to really try and understand the complexity and all the different facets it will impact.”

Construction

When his opponent Hillary Clinton put forward a plan to invest $275 billion in U.S. infrastructure, Trump responded by pledging to spend at least twice as much. The potential investment in roads, bridges and other projects would be welcome in the region’s construction industry, according to F. Matthew Pepe, director of government relations for the Construction Industry Council and Building Contractors Association, a Tarrytown-based group that represents more than 600 construction businesses in the region.

“Although there is a lot of guesswork to what a Trump presidency may bring, one thing we know is Mr. Trump likes to build,” Pepe said. “He has continuously stated that our infrastructure will be ‘second to none’ as far as roads, bridges, schools, hospitals, etc.”

While Pepe said this would be welcome investment, employing more workers and potentially boosting local economies, he said he hopes any infrastructure spending be part of a long-term plan so as to ensure stability regardless of changes in the political landscape.

Pepe added that he’d like to see more discussion on spending for clean water infrastructure.

“When Mr. Trump talks about infrastructure, I do not hear about clean water and clean drinking water infrastructure,” Pepe said. “It goes without saying that wastewater and other water needs are vital to any local economy.”

He cited a recent study that found New York state would need to spend $30 billion over the next 20 years to improve its wastewater systems and another $30 billion on other clean drinking water projects statewide. “I hope these needs will be addressed in Mr. Trump’s home state,” Pepe said.

Manufacturing

Trump’s campaign ran on a platform of criticizing the country’s current trade deals, particularly the proposed Trans-Pacific Partnership and the North American Free Trade Agreement. Trump said the deals cost American workers jobs and he would renegotiate the terms of current agreements with “tough and smart trade negotiators to fight on behalf of American workers.”

The message appeared to resonate in Rust Belt states. Trump won the traditionally Democratic states of Michigan, Wisconsin and Pennsylvania.

But the effect of trade on New York manufacturing is a little more tricky to gauge, according to Harold King. King is executive vice president of The Council of Industry in Newburgh, which represents manufacturers in the Hudson Valley. He wrote a column on the impact of globalization in the Hudson Valley for the Council of Industry’s quarterly magazine, where King said global trade overall has a positive impact for the region’s manufacturers.

“The relatively high cost of producing goods in New York has meant that high-volume, labor-intensive lower-cost goods have long since gone from our region,” King wrote. “What remains are innovative companies with high-quality products that are in demand around the world. Any agreements that reduce tariffs and other barriers to trade make these Hudson Valley products more attractive.”

So what will a Trump presidency mean for those manufacturers? King said the uncertainty over the future of international trade deals could hurt manufacturers, but he’s waiting to see what Trump does once he takes office before drawing any conclusions.

As for what he’d like to see from a President Trump to help manufacturers in the region, King said investments in workforce development and infrastructure as well as policy changes in taxation and regulation could help.

“I think most of our members would like to see comprehensive tax reform that lowers rates to make them more in line with other developed nations,” he said. “I also think that a rollback of some of the many regulations and executive orders that have made it more expensive to employ people would have a positive impact.”

Nonprofits

Most of the coverage of the nonprofit sector in the election had more to do with the Clinton and Trump foundations than it did with how or if the candidates planned to change federal programs and other sources of funding for nonprofits. The nonprofit sector, which is the largest employer in Westchester, is still assessing the impact a Trump administration will have, according to Joanna Straub, executive director of Nonprofit Westchester, an advocacy group for nonprofits in the county.

Straub said that organizations have expressed concern about the possibility of cuts in funding for civil legal services, women’s health care and health, safety and quality requirements for day care and preschool programs that Straub said will cost a lot to implement but are not fully funded.

“Cuts in federal funding would increase the local burden of providing these programs and would likely reduce or eliminate important services that help keep Westchester thriving by allowing everyone to reach their full potential,” she said.

Energy

While New York has moved ahead with Gov. Andrew Cuomo’s Clean Energy Standard, which mandates the state receive 50 percent of its energy from renewable sources by 2030, Trump has pushed for a different type of energy revolution. Trump said he wants to make the U.S. completely energy-independent by removing regulations and increasing the production of natural gas and coal.

Cuomo has pushed his renewable energy policy as the state’s part in a global fight against climate change, while Trump has called climate change a “hoax” and vowed to pull the U.S. out of the United Nation’s climate change programs.

How those two conflicting mindsets will coexist remains to be seen, said Karl Rabago, executive director of the Pace Energy and Climate Center. But Rabago said he views it as unlikely that decisions made by Trump and a Republican Congress could impact New York’s state-level energy programs.

“The climate don’t care what you believe,” he said. “That’s kind of the terror and the beauty of science. The data is rock solid. And New York is committed to dealing with this on a data basis and that’s why the governor has stood up so prominently with the Clean Energy Standard. I think our state policy is on firm footing for being right, and if you honor the right of states to address the issues that are important to its voters, then you see no reason for the federal government to interfere in any material way with what our state wants to do.”

But renewable energies do rely in part on federal subsidies for financing, which Rabago said could impact the development of solar and other renewable systems.

If there is resistance to efforts to combat climate change on the federal level, Rabago said, it’s important for states such as New York to show leadership in developing renewable energy and other efforts to counter global warming.

“This is a moment for that good old-fashioned word ‘leadership,’” he said. “Convening people around a common agenda. And polls consistently show that the American people do expect climate-responsible regulation and leadership.”

Politics

Cuomo’s relationship with a Trump administration might prove interesting, according to Larry Bridwell, a professor of international business and chairman of the undergraduate management program at Pace University’s Lubin School of Business.

He said Trump overall could be a positive for the state’s economy, since it has a hometown advantage, and New York could have help from the White House in pushing along needed rail tunnel and airport projects. But how Cuomo and Trump get along will be worth watching, Bridwell said.

“It is good for New York if they work well together, but Gov. Cuomo may be interested in running against President Trump in 2020,” Bridwell said. “Will this affect New York? It remains to be seen.”

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About the author

Ryan Deffenbaugh covers energy, education, food and beverage and the Sound Shore for the Westchester County Business Journal. He previously worked for Westchester Magazine and The Citizen daily newspaper (Auburn, N.Y.). He started with the Westchester County Business Journal in March 2016.

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