Economic Development Plans Fall Short of Fixing State’s Real Problems

By Assemblyman Will Barclay
The Governor has set forth his Economic Development plan in his proposed 2013 budget. While there are some ideas that I can support, overall our state would benefit from policies that are fair to all businesses.

We should focus on cutting red tape and costly burdens and leave more control up to the Industrial Development Agencies to create jobs.

The Governor proposes to include funding again for 10 Regional Economic Development Councils to compete for a third round of grants ($220 million).

He proposes “Innovation Hot Spots” which would designate 10 high-tech innovation incubators at higher ed institutions. These hot spots will be tax free zones, where start-ups and other businesses connected to the incubators will be exempt from business and sales tax for five years.

He proposes a venture capital fund ($50 million) to provide seed funding to technology and research into the marketplace. Buffalo will see an additional $100 million as part of the Governor’s 10-year $1 billion commitment to the region, and an additional $60 million to help keep the Buffalo Bills in Western New York.

As part of what’s being called “Market NY,” the Governor proposes to build three casinos in Upstate New York and create “Taste NY” – a program designed to market agricultural goods grown and produced in New York.

Taste NY would also create “duty free” stores around the state.

He also proposes to set aside $5 million for an advertising competition among counties, to encourage regional marketing plans.

What these plans lack are initiatives that would benefit all businesses.

They also take more control away from localities. While I support the partnership our higher ed institutions can have with private business, Innovation Hot Spots will only benefit those who fall within certain parameters.

Regional Councils can only provide grants to a select few as well.

While the grants might be a boon to one business, the award process is subjective and leaves other job creators out of the equation.

One thing I am particularly opposed to is taking any controls away from Industrial Development Agencies.

The budget proposes to require the Regional Economic Development Councils to approve state sales tax exemptions.

Currently, this is within the local IDAs’ control.

Changing this would add even more layers of government and take limited controls out of the hands of localities. It would add delays and uncertainties as well as hinder growth efforts, especially when time is of the essence.

Local IDAs need to be able to negotiate with businesses in order to create jobs specific to their region.

It’s also unfortunate to see the state try and specify up front which projects receive the tax exemptions according to the number of jobs created, when each area is different and so is each industry.

Further, it would squash opportunities that require quick action, which is the difference between a company choosing to locate in our local area or another state.

We also need to provide incentives to new businesses, not take them away.

The state has nothing to lose and everything to gain by helping new businesses across the board.

We have a good structure in place for those interested in starting a business or finding a job. There are free services people can access to have a professional review a business plan and set people on the right path through the One-Stop Career Centers located at the state’s Small Business Development Centers.

Start-ups generally have the most to lose so why not foster real investment by providing business income tax reductions for the first year and reducing new business application fees by 50% for the first year.

I sponsor legislation that would create these tax reductions. This would improve the playing field for all small businesses.

We also need to say “thanks” to the job creators who have been around doing business in this state and help to keep jobs here.

Why not do that by listening to them.

There are onerous licensing and renewal fees that businesses have come to expect.

Perhaps the things that really angers people are the hoops our state requires business owners to jump through, so they can nickel and dime businesses.

Two years ago, the state cited a farmer at a market for cutting artisan cheese on premise.

The state said they needed a permit equivalent to that of a deli to do so.

And take for example, the sales tax code: there IS sales tax on a sliced bagel but NOT sales tax on a whole bagel.

How do businesses who try to play by the rules navigate or predict this bureaucracy?

We need to eliminate these burdensome regulations that make it difficult for businesses to understand how to play by the rules and make them feel unwelcome.

I’m hopeful budget negotiations will remove the sales tax provision and energy tax renewal.

We need better business practices to lead our state away from the repeated distinction of being ranked the 50th worst state to do business.

If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office.

My office can be reached by mail at 200 N. Second St., Fulton, NY 13069, by e-mail at [email protected] or by calling (315) 598-5185.

You may also friend me, Assemblyman Barclay, on Facebook.