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September 24, 2002

Manufacturing leaders: New York needs more tax cuts to compete in manufacturing

New York State must cut taxes further and enact other reforms to keep manufacturing jobs in the state, leaders of several manufacturing companies agreed during a panel discussion at The Business Council's Annual Meeting.

"The tax structure is daunting," said Mark M. Little, vice president, Energy Products, for GE Power Systems, in a comment echoed by other panelists.

"Property taxes are the biggest problem we have," said Gregory M. Harden, president/CEO of Harden Furniture Co. "It makes it more difficult for us to attract people. You buy a home here and you pay thousands of dollars in property taxes. Or you can buy a home in another state and pay a lot less."

Andrew D. Herbert, manager of Ford Motor Co.'s Buffalo Stamping Plant, said company facilities in other states have "much lower" taxes.

The panelists also said that New York has important competitive advantages over many other locations, including good schools and plentiful supplies of water.

"We have a great school system and that's an advantage for families," Little said. Charles C. Barrentine, vice president of Eastman Kodak Co. and manager of Kodak Park, added: "The quality of the people in the schools is very good."

New York State's regulatory environment also needs further improvement, the manufacturing executives agreed.

Barrentine said the company has high environmental standards but employees must devote "a lot of wasted energy" to deal with regulations that do not serve worthwhile purposes.

Harden said, "At some point, we have to have the answer, whether to turn right or turn left, and it can be very difficult working with New York State." Little agreed, saying: "Your average person would feel the (regulatory) climate here is tougher than most other states."

Costs for electricity and workers' compensation also can cause competitive problems for New York manufacturers, the panelists said.

Herbert said Ford's bill for electricity at its Buffalo plant is second-highest among all Ford manufacturing plants in North America, even though the company benefits from the Power for Jobs program and low-cost hydroelectric power from Niagara Falls.

The manufacturing executives said state business incentives should be available to help support existing employers as well as companies moving into the state.

"Clearly, some other states are more pro-business in trying to give businesses incentives to come there," Little said. "People sometimes think we're a given in the community, whereas other states will welcome you."

More must be done to educate New Yorkers as to the broader economic benefits of industrial jobs, and the attractiveness of manufacturing as a career, the executives said.

Eastman Kodak indirectly pays the salaries of some 7,000 men and women who work for contractors at Kodak Park, in addition to its 24,000 or so employees, Barrentine said. "When you have a lot of manufacturing jobs, you create a lot of other jobs," he added.