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A pizzeria doesn't need a tax break

Thank goodness the Lancaster Industrial Development Agency's board of directors isn't just a rubber stamp, after all.

The agency did the right thing last week, denying Penora's Pizza in Depew a little less than $20,000 in tax breaks for its $425,000 expansion project.

It was an encouraging sign from one of the region's suburban IDAs that, maybe -- just maybe -- some common sense is beginning to buck the disturbing trend of offering tax breaks for dollar stores, doctor's offices, restaurants, children's play centers and doughnut shops.

After all, in a shrinking market like the Buffalo Niagara region, offering tax breaks for retail projects doesn't add anything to the local economy. All it does is carve up the market in a different way without bringing any new growth to the area. We just end up handing out tax breaks so we can spin our wheels.

Each of us only has so much money to spend on eating out and entertainment. And because the population here is shrinking, the overall pool of dining and entertainment money is getting smaller, too.

So if Penora's Pizza gets tax breaks to expand and add nine jobs, it means less business for the other nearby pizzerias, restaurants and other entertainment establishments that weren't lucky enough to get tax breaks. And less business for them means that they'll have fewer jobs, canceling out the new jobs that the tax breaks would have been subsidizing at Penora's.

That's not economic development. It's wasting tax money. And remember this: Since retail projects don't generate any real economic growth -- and with it additional tax revenue -- they just mean higher taxes for you, me and every other resident and business that didn't have the good fortune to be anointed as a chosen one by an IDA.

That's why the local IDAs rightfully have been coming under scrutiny as they have strayed from their original mission of supporting projects that truly generate new wealth and create new business within the region.

"Our IDAs should be focusing their efforts on projects that have an important regional impact and create good-paying jobs, the type of jobs you can raise a family on," says Assemblyman Sean M. Ryan, D-Buffalo, who is leading the charge in Albany to rein in the region's suburban IDAs.

"Subsidizing a pizzeria would have absolutely been the wrong thing to do," he says.

He's absolutely right about that.

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Speaking of taxes, the Village of Wellsville picked up a dubious distinction last week, when an Albany think tank declared the Allegany County community the highest-taxed community in the state.

Wellsville's effective tax rate of $62.63 per $1,000 in assessed property value was more than double the statewide median and almost twice as much as the Western New York median of $35.58, according to the Empire Center for New York State Policy.

In contrast, the lowest effective tax rate is on Long Island, in the tony Hamptons, where the effective tax rate in the Village of Sagaponack is just $1.24 per $1,000.

But remember, the highest tax rate does not necessarily yield the highest tax bill.

Despite Wellsville's high tax rate, someone owning a house valued at the county's median home value of $62,750 is paying $3,930 a year in taxes. But in the Rockland County Village of Haverstraw, where the median home is worth more than six times more, at $390,000, the average annual tax bill is $17,332.

Wellsville doesn't look so bad after all, does it?

***

More proof that the Buffalo Niagara region has gone from being a manufacturing hotbed to a typical factory town.

Back in 1980, when the steel plants were still running, the Buffalo Niagara region had almost a third more factory jobs than the typical U.S. community. Today, with the steel plants a distant memory and the local auto factories a shadow of their former selves, we have just 7 percent more manufacturing jobs than the national average.

But that doesn't mean those remaining factory jobs aren't important. Those jobs still pay very well -- about $57,100 on average and 42 percent more than the average job in the Buffalo Niagara region, which pays about $40,300, according to a report released last week by the Brookings Institution.

Even more encouraging are the signs that the prolonged decline in the region's factory employment may be coming to an end. After losing two of every five local manufacturing jobs from 2000 to 2010, factory employment has rebounded a bit. Our 5.4 percent jump in factory jobs from the beginning of 2010 through the end of last year was double the growth nationally.

It's too soon to say Buffalo's manufacturers are getting back in high gear, but it's an encouraging sign that the decline might finally -- and mercifully -- be over.

email: drobinson@buffnews.com