The state estimates the lost revenue will be $323 million through March 2017. The program allows businesses to pay no taxes for 10 years on property, sales or mortgages. Their employees don’t have to pay taxes.
The state’s figures are not the only costs here. Municipalities will lose property tax revenue. Development could be shifted from one town to the town that has the tax-free incentive. For example Rochester may have trouble filling up its vacant buildings because the new businesses are flocking to SUNY Brockport’s campus.
Do you honestly think this will pay for itself? Let’s say the average job pays $50,000. $323 million divided by $50,000 equals 6,460 over the next four years. But those people wouldn’t pay any taxes for 10 years. And their employers wouldn’t pay any taxes for 10 years.
Guess who pays for these new jobs? We do. Someone has to make up that $323 million.
It’s possible these jobs would have been created without the incentive if the state adopted a more even approach to reducing business costs. The state has been throwing money at businesses for a long time – with little success. It just gave a Batavia company $500,000 for an expansion and it’s not clear if the company needed the money. It just gave Xerox $500,000 for its toner expansion in Webster, after Xerox threatened to build it elsewhere. (Right out of Xerox playbook.)
Astoundingly, Lt. Gov. Bob Duffy suggested Bausch + Lomb might be able to take advantage of Start-Up NY. The company is on the verge of axing hundreds of Rochester workers and we want to reward it?
Links of the Day:
– Buffalo teachers are tired of cleaning up after students who eat school-provided breakfasts in class. They filed a grievance. (I think food belongs in a cafeteria.)
– Is Greek yogurt in schools just an industry subsidy arranged by Sen. Chuck Schumer?
– How cast iron skillets are made at a small Syracuse factory.
– Princeton, N.J. is requiring students to wear headgear when player soccer, lacrosse and field hockey, even though experts say it will do o good.