Vote results seen aiding LI economy

BYLINE: BY JAMES BERNSTEIN. STAFF WRITER

Martin Cantor, an economist, has been a student of the Long Island business scene for more than 20 years, beginning as economic development czar under former Suffolk County Executive Patrick Halpin. Cantor is now chief economist for the private Long Island Development Corp. and is the author of the book "Long Island, the Global Economy, and Race: The Aging of America's First Suburb."

In an interview yesterday, Cantor was asked what the results of Tuesday's election mean for Long Island:

It appears that the Democrats will control both houses of Congress. What will this mean for business?

Well, it's going to mean direct access to the finance committee, where [Sen.] Chuck Schumer [D-N.Y.] will be a major player. On the House side, [Rep.] Steve Israel [D-Dix Hills] is on the financial services committee, and he's now in the majority on that committee. Long Island will have more access to the people who will make the decisions regarding commerce, business and banking.

What else do you see out there for the Long Island economy?

I see more technology and homeland security dollars coming to the Island. Israel and Schumer have both made that a high priority. You'll also see more transportation dollars here. With the Republicans, all the money went to the Midwest, where the power was. Now you're going to see more of it coming to the Northeast.

What does it all mean for business in general?

For one thing, there will be an increase in the minimum wage. That will raise costs to employers, but Long Island's workforce has lagged woefully behind when it comes to raising wages. This will ultimately help Long Island rather than hurt it.

There could be gridlock in Congress. Is that good for the economy?

There won't be gridlock. The president has to show he's willing to work with the Democrats or in two years there will be a Democrat in the White House as well. Washington will look like it used to, when the Republicans were not in power for 50 years.

But will the two sides really work together?

Well, remember, the Democrats have some conservative members as well, and on business they will all work together. The estate tax, for instance, unless there is action of some type, will be repealed in 2010. That's the current law. I think you'll also see some change in the Alternative Minimum Tax.

Are there any other areas you see Democrats and the White House working together?

I think Social Security will be addressed. Right now, the Republicans want to privatize it. You won't see that. But you might see more Democrats focusing on the Social Security debt. That would make the fund more solvent. Taxes withheld from wages are supposed to be put into a trust fund. But what the government has been doing is using that cash for expenditures and giving an IOU to the trust fund.

What are your thoughts on Governor-elect Eliot Spitzer and the economy?

If Spitzer can attack, on a recurring basis, the issues surrounding Medicare and high property taxes, that will be a positive for business.

But the New York State Legislature is considered to be one of the most dysfunctional in the country. Doesn't he have to deal with that?

I think he's going to have a better relationship with the legislature than [Gov. George] Pataki did. The Republican majority in the state Senate is thinning. Those Republicans are going to want to show they can work with a Democratic governor. Spitzer will have a longer honeymoon period than Pataki did. He's one of the most popular governors to come into office in a long time.