As most of us have read, the GCEDC recently announced that it is responsible for retaining 21 jobs in the Batavia area. According to the GCEDC, this was achieved by providing two existing hotels with sales tax breaks on their project to replace windows in their buildings.
I wrote to GCEDC inquiring how we can save jobs at $429/job, and specifically, what jobs are being retained. In the email I also questioned the wisdom of granting these tax breaks for a project that will, most likely, pay for itself over time though reduced energy costs.
The following are my original e-mail, and Steve Hyde's response. I call it a response, because I certainly cannot find any answers in the verbiage.
My e-mail:
Many taxpayers would like to know exactly how $429 saves a job.
That figure is derived from your own statement that a $9,000 sales-tax break for two hotels will retain 21 jobs. I cannot, for the life of me figure how that works. Are you asserting that the two firms would not go forward with this project without this tax incentive that constitutes 4 percent of the total cost? I find that doubtful. Even if so, specifically, what jobs will be “retained”?
Please also clarify how GCEDC justifies this tax break for two existing private businesses, when they are replacing older windows with new ones that will obviously pay for themselves over time through reduced energy costs. Your prompt reply is anticipated and appreciated.
Thank you.
Bob Harker
His response:
Feb. 7, 2011
E-mail Correspondence
[ e-mail address deleted ]
Dear Mr. Harker:
Thank you for taking the time to write us with regard to the Days Inn and the Super 8 project in which the GCEDC board approved a sales-tax exemption on Feb. 3, 2011.
The GCEDC Board of Directors, by way of this project and others, is focusing on and taking action in accordance with key elements of our legal authority and with regard to our organization’s mission, which includes catalyzing community economic development success by supporting the growth, expansion and retention of Genesee County’s existing base of businesses.
The GCEDC board’s philosophy is to assist area businesses by helping to ensure that companies across Genesee County remain successful, viable, employ residents and contribute to the overall tax base of the county.
The sales-tax exemption on the renovation project at the Days Inn and Super 8 hotel is an example of a retention project by GCEDC. And through our participation, albeit in a small way (a $9,000 sales-tax exemption), we are supporting and helping retain the ongoing viability of one of our area businesses which is actively investing in our community and contributes a considerable amount to the tax base of our community by way of sales-tax generation and property-tax payments.
Given New York recently ranked number 50 in state business-tax climate as measured in October 2010 by the Tax Foundation – it is pretty clear of the importance to provide tax assistance to new and existing businesses in order to level the cost playing field and to reduce some of the tax burdens on area businesses -- especially in order to ensure their long-term viability and contributions to the community’s tax base and employment base.
Given the Tax Foundation rankings, we must continue to do what we can at the local level to ensure Genesee County is known as a “business-friendly community,” despite the high-cost structures so well known by many at the state level.
It is imperative for our long-term economic success that we continue these practices of providing tax assistance to new and existing businesses, because without viable businesses in our community – we have no economic certainty -- our employment climate would be perilous and the tax burden placed on area residents -- because of a declining business tax base -- would be far worse than it is today.
Thank you again for your correspondence and please do not hesitate to contact me if I can ever be of further assistance.
Sincerely,
Steven G. Hyde
President, GCEDC
Can anyone help me find the answers to my questions?
