Officials like no-tax proposal; businesses not so much
MOHAWK Economic development officials see potential in Gov. Andrew Cuomo’s proposal to lure businesses with a decade of no taxes. But some small business owners struggling in the state’s current high-tax environment don’t like the smell of it.
Only a few people attended a forum on the proposal Tuesday afternoon at Fulton-Montgomery Community College — it was announced late Monday, giving few people the opportunity to attend.
State Environmental Facilities Corp. CEO Matthew Driscoll is among several members of the governor’s cabinet making stops throughout the state to carry to the public Cuomo’s idea of giving new businesses the opportunity to set up shop next-door to the state’s college campuses and pay no local or state taxes for a decade. At Tuesday’s forum, Driscoll described elements of the initiative, aimed at reversing the high-tax reputation that’s sending residents and businesses out of New York.
Under Cuomo’s plan, new businesses willing to locate on SUNY property, or private college campuses, could operate without paying local property taxes, local and state sales taxes and state business taxes. Employees of these firms, meanwhile, would be spared from paying state income taxes.
The initiative would be bolstered by close proximity to the state’s academic institutions, providing incentives for savvy entrepreneurs seeking the most economical site to start up or expand.
“Businesses across the country are looking for the best place to land,” Driscoll said.
Tying the effort to the state’s colleges also provides an important part of the puzzle: employees. More than 90 percent of the state’s populace lives within 15 miles of a SUNY campus.
If approved by the state Legislature, the system wouldn’t be offered to all, and Driscoll said there wouldn’t be any “shirt changing,” where existing businesses simply change the name of their company to enjoy benefits of the state’s former Empire Zone program. To be eligible, businesses would have to create new jobs and come primarily from outside the state.
In addition to the SUNY campuses, there are also 20 state-owned properties, including some jails shut down in past years, that would be included in the program, Driscoll said.
Fulton County Administrative Officer Jon Stead said there could be benefits for the county in such an effort, but the role taxes play in rural, less-populous areas is an important consideration.
“You have to be cautious, but I also think we’re open-minded. The one thing I think we all agree with is jobs, jobs, jobs,” Stead said.
He said boosting local jobs could mean important revenue for local businesses.
The county has been working to get the former Tryon youth prison in shape for business, Stead said, and he’s anxious to learn more details about the governor’s program in case that facility might be eligible for inclusion.
Montgomery County Economic Development Director Ken Rose described the initiative as “bold” and said linking educational facilities with job creation is a good idea because it gets local students trained for local jobs.
One of the most critical needs for businesses, Rose said, is sewer and water systems — something communities are struggling to develop in rural areas. That should encourage municipalities, Rose said, to collaborate to develop these systems and improve their chances of landing a job-creator.
Some business owners weren’t happy with the idea of seeing firms from somewhere else avoid the crushing taxes that make life difficult for their established competitors.
“There’s going to be a lot of resentment,” said Bion Soblosky, owner of Johnstown-based BioTech Mechanical, a plumbing and heating, ventilation and air conditioning service company.
Aside from the ire of existing businesses and employees watching their neighbors enjoy life without taxes, Soblosky suspects companies will take advantage of the benefits for 10 years and then leave.
“I wish the governor would do something more for existing businesses in the state,” said Stephen George, president of Gloversville-based North Country Ecological Services Inc.
George said his and other small businesses currently operating would be able to hire more people with fewer burdens coming from the state.
“What about the people who already live here, who already work here?” he asked.
Driscoll said the state has to try something aggressive to reverse the continued drain of people and business.
“The reality is we need to so something different. … We’ve got to do something bold and creative,” he said.