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October 20, 2012

Area employers react to tax study

Report ranks N.Y. 50th out of 50 for business climate

By Mark Boshnack
The Daily Star

---- — All but one of the area business leaders interviewed Friday agreed with the findings of a nonpartisan tax research group. 

The national Tax Foundation report ranked New York’s business tax climate index the worst in the nation. It compares states in five areas of taxation that affect businesses, including corporate, individual and property taxes.

“They do soak us for a lot of taxes,” Cooperstown Motel owner Al O’Brien said.

In addition, the necessary paperwork for workers compensation, disability, state and federal withholding and social security taxes can require 50-75 hours a week.

“They don’t even send me a Christmas card,” he said.

The business employs three. With that business climate, “I can understand why so many businesses are leaving,” he said. “It really is outrageous.”

If it was possible to move the motel, “I’d be out of this state really quickly.” He helped his parents build it in 1949 and worked there for 45 years.

“I would sell it in a heartbeat,” but he doesn’t want to give so much away in taxes. In contrast, “The Otsego County Chamber is disappointed with the ranking,” Executive Director Barbara Ann Heegan said. “We have to celebrate the milestones that the state is making with tax incentives and reforms under Gov. Andrew Cuomo,” she said.

The chamber will continue to work with Cuomo and the state legislature on tax and regulatory changes that will help improve the county business climate so more doors will be open by businesses of all sizes and sectors, she said.

The others interviewed agreed with the research group’s findings.

David Harder is president of Reinhardt Corp. in West Oneonta. It sells a variety of energy products and has about 22 employees.

“With a customer base that needs to be serviced, we are not going anyplace,” he said. However, it’s a fact that a lot of people are leaving the state and businesses are moving out, because of taxes, he said. “There are states where it is a lot cheaper to do business.”

Interskate 88 owner Eric Nelson said high tax rates help create an environment that is unfavorable for business. He would like to see all taxes lowered. The roller-skating rink employs about 10 in season.

L&J Consultants owner John Marano said, “It’s hard to do business in New York state, and it’s not getting better.”

He is the sole proprietor of the Internet consulting and Web design company he runs out of his Trout Creek home. While business taxes don’t affect him as much as they would a bigger company, “it can be very enticing to pick up your business and move.”

USA Custom Pad in Sidney owner Eric Wilson said his biggest complaint is property taxes. He is a member of the Sidney Town Board. Part of the reason he got involved in local government was to keep those taxes down, he said. He lived in Virginia before moving back to Sidney in 1991. His house there was of equal value but taxed about one-quarter of what it would be here.

His business employs about 40 and manufactures custom journals and notepads. Wilson said he pays more than $20,000 in taxes on his property in the Sidney Industrial Park in the village.

The state needs to come up with something that will give businesses an incentive to grow, he said. While he knows of others who have moved, “there are always challenges when you do that.”

Factors such as training and relocation costs would make it difficult for his business to do so.