“This proposal will be devastating to small businesses,” said Assemblyman Phil Palmesano (R,C,I-Corning) in a strongly worded letter to Gov. Andrew Cuomo urging him to reconsider a change to the sales tax benefit for local Industrial Development Agencies (IDAs). Under the governor’s budget proposal, the sales tax benefit would only be granted to Excelsior-qualified projects. “Gov. Cuomo has said we need to focus on improving the upstate economy, but limiting the sales tax benefit for IDAs would directly counter this goal,” said Palmesano. “Nearly 5,000 jobs would not have been saved or created in the counties of the 132nd Assembly District if the sales tax benefit had been limited to only Excelsior projects. It has been instrumental in driving investment and job growth in the Southern Tier and Finger Lakes regions, which has been vital to the fragile economic recovery in the region.” In his letter, Palmesano cited several examples of projects in his district that wouldn’t have been successful without the sales tax benefit. In Seneca County, 24 projects with investment of nearly $270 million, affecting 2,165 jobs, would not qualify under the proposed rules. In Steuben County, 20 projects, worth over $600 million and affecting over 2,000 jobs would not qualify under the new rules. Officials in Yates County, which has been one of the most active counties in the state for new company attractions and start-ups, said that not a single project would have qualified under the proposed rules. Palmesano stated in his letter to the governor, “… in the context of a $142 billion budget proposal, this item only represents $9 million in this fiscal year and $13 million when fully implemented. However, in my opinion, the negative impact this proposal will have on our upstate, rural region will be devastating, as the numbers I’ve provided demonstrate to you… I cannot stress enough the great concern this proposal has raised among not only economic development officials, but also local government leaders and the business community. This proposal will create another unnecessary burden that will hinder the ability for upstate, rural areas to improve the economic health of their business communities and quality of life. This proposal, coupled with the concerns which have been expressed to me, run counter to New York’s ‘Open for Business’ mantra.” “The Steuben County Industrial Development Agency applauds Assemblyman Palmesano and our other state elected officials for supporting the removal of the IDA limitations being proposed in Gov. Cuomo’s executive budget. The limitation of the sales tax benefit would have impacted over 20 projects in Steuben County, which totaled over $600 million in new investment and induced the creation of over 2,000 jobs in the last 10 years. In this tough economy we need to be doing everything within our power to attract new jobs and investment into our community instead of further limiting the ability to entice development in the Southern Tier,” said James C. Johnson, Executive Director of the Steuben County IDA. “Taking large economic development projects, like the CVS Distribution Center, that are eligible for the Excelsior Program to the Regional Council to get state sales tax abatements is not my concern,” said George Miner, President of the Chemung County IDA. “That’s just another layer of bureaucracy, on top of a mountain of layers required to do such a project in New York already. My concern is that the governor’s proposal excludes small businesses from receiving this economic development incentive that has been available to them for the past 40 years and is available in every other state in America. The governor’s proposal excludes projects that remove blight and revitalize our downtowns. I don’t know how much more small businesses can take. “The governor wants to dictate what economic development goes on in every town, village and city in New York. What’s important for Elmira may not be important for Syracuse and vice versa. New York State ranks at the bottom in every important economic category. This will just push us further in the hole.” “Governor Cuomo has been making great strides to make New York ‘Open for Business’ by promoting New York as having a more business-friendly environment, but this revision unfortunately is most definitely not business friendly. Adding restrictions to the types and sizes of business that could qualify for state sales tax incentives and inserting additional levels of needed government approvals does not lend itself to being open for business. As a rural community that is reliant on the success of our small businesses, this provision will definitely hamper our very successful efforts to help small businesses thrive,” said Steve Griffin, CEO of the Finger Lakes EDC. J. Kelsey Jones, Executive Director of the Schuyler County Partnership for Economic Development (SCOPED) pointed out, the governor has been quoted that he does not want to subsidize a company to move within the state and receive benefits. “I can assure you that not a single project in Schuyler County is the result of a move from one part of the state to another. We are a rural county and have never had a heavy manufacturing or commercial base, and since the Excelsior job incentives are targets that we cannot meet, we need the sales tax incentive for the redevelopment of historic properties that we have undertaken on the Main Streets of Watkins Glen and Montour Falls, New York. It is crucial that we be able to revitalize these commercial centers of activity, which we are successfully doing in coordination with New York Main Street Funding and other programs.” “These projects generate more sales tax for years into the future than what is foregone upfront. We shouldn't lose sight of the cost-benefit relationship,” said Bob Aronson, of the Seneca County IDA. A copy of Assemblyman Palmesano’s letter to Gov. Cuomo is attached with this release.