Far from Ideal

We’ve been here before. A business meets with local officials with promises that it will bring economic benefits to the county—but only if the company is paid off with special tax favors. The demands are outrageous, but the officials feel they must capitulate or the company will take its marbles and go home. The business gets what it wants and the taxpayers get the shaft.

It happened over two years ago, when the Millennium Pipeline made a deal with the Sullivan County Industrial Development Agency to make payments in lieu of taxes that reduced their payments by 75 percent for the first five years, 50 percent for the second five and 25 percent for the third. And it’s happening again with Ideal Snacks, which is seeking to become a “regionally significant project” in the Empire Zone program, saying it will create 50 jobs in the next 10 years. The only problem is, four-fifths of those jobs would not only be at low pay, but would not include health insurance coverage—meaning that social services (and emergency rooms) would have to pick up the slack. Why, then, should the taxpayers take a second hit by giving the company Empire Zone tax benefits?

Admittedly, the Millennium Pipeline instance was far worse than the current case, because it was so clear that the immensely wealthy company, which had no viable alternative to its proposed route, was bluffing. Ideal Snacks, on the other hand, is a small company with fewer resources and no special ties to any particular location. It might indeed decide not to expand, or perhaps even relocate, if it doesn’t get what it wants.

It is tempting to take the high moral ground and refuse to reward a type of corporate behavior that has become endemic in this country, in which a company arm twists local governments into making special deals and, in return, supplies only jobs that result in a heavy and continuing drain on local services and tax dollars.

But it’s easy to say that sitting behind our desks in our comfortable jobs, and perhaps not so easy for Sullivan County residents who are currently unemployed, and for whom any job at all would be an improvement.

One way to escape this dilemma would be to create a system in which municipalities formed pacts with each other to abstain from the type of reverse-bidding wars we get now, with every town or county vying to secure a lousier deal for their taxpayers than the next. But as long as voters need jobs, it’s not reasonable to expect that their representatives will leave any stone unturned in competing to attract business.

A state law forbidding Empire Zone status to any company that did not at least supply health care coverage would just move the problem to another level. One of the points of Empire Zones is to create areas that are competitive with other states in attracting business; if New York sets a higher bar than its competitors, there is once again a fear that we would lose business altogether.

There are no easy solutions, but perhaps the legislature could work with the company to see if there are ways to enhance the pay and benefits attached to the job, coordinating with Workforce Development, for instance, on low-cost options for healthcare. Other than that, this whole issue goes to underline the importance of attacking the problem of healthcare coverage at the national level. At that level, the anti-competitive argument no longer applies—in fact, it is reversed. The need to pay private health insurance benefits is one of the major reasons this country has lost so many thousands of jobs in the automobile industry and, indeed, manufacturing in general; many of them have gone to plants relocated to Canada with its universal healthcare system or to other foreign countries where the government, not individual companies, handle health costs.

We would love to see the Sullivan County Community and Economic Development Committee and the Empire Zone Committee take a principled stand on Ideal Snacks and simply not grant them the status they seek unless they meet higher pay and benefit standards. However, we can also understand why those bodies might feel that their options are limited. But perhaps, if the company is willing to work with the government, a third way can be found that doesn’t leave the county settling for the worst-quality jobs in order to get any jobs at all.

Dr. Punnybone

Exxon ruling a lesson for our area