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September 23, 2009

NY policies unavailing, local leaders tell fact-finder

By DAN HEATH The Press Republican Wed Sep 23, 2009, 11:28 PM EDT

PLATTSBURGH — Local business leaders complained Wednesday about how state fees, taxes and regulations are hindering their competitiveness and ability to create and retain jobs.

The setting was the third of five statewide hearings to gather business input, Unshackle Upstate Executive Director Brian Sampson said. The purpose is to create a record to bring to state government officials to develop a pro-growth agenda for the state.

Besides Sampson, the hearing panel included State Sen. Betty Little, Assemblywoman Janet Duprey, Meg Wood (representing Assemblywoman Teresa Sayward) and Plattsburgh-North Country Chamber of Commerce Board Chairman John VanNatten.

BURSTING BUDGET
Chamber President Garry Douglas said that if the state government were a doctor and the residents of New York the patients, "boy, would there be a malpractice suit."

Health-insurance costs, property taxes, energy taxes and fees increased significantly in what was supposed to be a reform budget.

"There was no meaningful reform in this year's budget," Douglas said.

That includes an additional $230 million in new taxes on health insurance on top of $500 million added in the deficit-reduction plan in February. Energy taxes increased from $93 million to $653 million.

Robert Frenyea of Abbott, Frenyea, Russell and Coffey, a local accounting firm, said new and increased fees are a big part of the problem.

The Empire Zone recertification requirement, for example, came after many firms had filed tax returns that included expected tax credits. Those returns were not accepted.

Others had to file without claiming the credits until they were recertified.

Although most of the recertifications were completed by the end of June, Frenyea said he doesn't know of any company that has received the credits.

HIGHER LIVING COSTS
Kirk Stallsmith, manager of the Georgia-Pacific mill in Plattsburgh, spoke as someone who can compare the cost of living in Plattsburgh and the Green Bay, Wisc., area, where he previously worked.

He said the school and property taxes here are about double for a comparable house in that area of Wisconsin. His auto insurance is also nearly double, and other living expenses are 10 to 20 percent more.

G-P recruits are trained and mentored, he said, then frequently leave the state. Their new location allows them to increase take-home pay by $6,000 to $10,000 without a raise.

CONSOLIDATION
Stallsmith said government should use lean principles similar to those that corporations use to eliminate waste. Consolidation is a big part of that.

Little said that has long been one of her causes.

"It has to come from the voters and the community," she said. "Personnel is the biggest cost in government."

Duprey said she was taken aback during consolidation discussions this year by the number of government officials who said they can't consolidate anywhere.

BEYOND MISSION
TwinState Voice Data Video President and CEO Devi Momot encouraged greater scrutiny of state agencies such as BOCES.

She said its original intent was to enable rural school districts to combine their resources to provide services that otherwise would have been uneconomical, inefficient or unavailable.

One example of BOCES going beyond its mission is its Northeastern Regional Information Center, Momot said, which provides telephone and data services for local school districts.

Those services could be provided by companies such as TwinState. One reason the Information Center often gets selected is that school districts can use state aid to offset that cost.

"State aid is used as a discount to give the impression that NERIC's services and recommendations of services are less, but, in fact, state aid is not free to us as taxpayers; it is money from our other pocket," Momot told the Press-Republican afterward.

STATE LANDS
Sylvie Nelson, executive director of the Saranac Lake Area Chamber of Commerce, said the property-tax burden in the Adirondack Park is particularly high because the state is not paying full taxes on its lands.

Little agreed, noting the state says it can't pay but then goes out and buys even more land.

SALARIES
Unshackle Upstate literature says upstate New York and local government salaries are 10-percent higher than the private-sector average. That includes 29 percent higher in the North Country.

Job growth is happening only in the public sector, Douglas said, and that is not sustainable growth.

He said bringing public workers' salaries and benefits in line with the private sector would go a long way toward solving the problems.

Instead, public-sector employees got raises in the midst of the state's fiscal crisis.

"That's mind boggling," Douglas said.

Sampson said the focus needs to be on private-sector job creation.

"Without the private sector thriving and creating jobs, there are no public-sector jobs."

Others who provided statements were Hope Coryer of ETS; Jay Ward of Ward Lumber; Dan Votraw of NYCO Minerals; Gary Titherington of Mold-Rite Plastics, Treadwell Bay Marina and Geoffrey's Pub; Jim Forcier of Westelcom; and Ron Graham of Monaghan Medical.

E-mail Dan Heath at: dheath@pressrepublican.com