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Another Voice: Tax breaks for FedEx facility are good for Hamburg

By Michael Bartlett

There has been a lot of scrutiny – and criticism – of the Hamburg IDA’s involvement with the FedEx project. Politicians, who usually can’t wait to be invited to this type of new job- and tax-creating announcement, have suddenly lined up, along with The Buffalo News editorial board, to criticize the IDA’s decision to offer incentives to a project that meets all of these goals.

ln this frenzied atmosphere, some facts and analysis about the process of granting incentives to FedEx and the results they will produce should add some clarity. The main criticism centers on the belief the Hamburg IDA approved a project that would create “more than 500 jobs,” when the real number is far fewer. In examining all the records – notes from meetings with the site selector and company officials’ correspondence, the actual application and the minutes of the IDA meeting – nowhere does the claim of “more than 500 jobs” ever appear. ln fact, “more than 500 jobs” appears in a News article on March 6, 2014. The figure is not attributed to anyone by name.

The incentive package approved by the Hamburg IDA was based on the number in the application, which stated the project would create 32 new jobs, retain 177. Additional contract truck drivers were not a part of the FedEx application.

The benefits of this project are impressive. The payroll for the jobs created, retained and added will amount to $9.5 million (average annual salary: $48,500). Estimated construction jobs are 323 with an average annual salary of $51,299.

This project will generate significant “payment in lieu of taxes” revenue to government over the next 10 years. lt is estimated Erie County will receive $251,000, Hamburg $279,000 and the Frontier School District $715,000. Sales taxes are estimated to be an additional $1.8 million. The total tax revenue to these governments from this parcel of land prior to the FedEx project – zero!

Special district taxes, which are never abated, will be impressive. The Woodlawn Volunteer Fire Department will receive an estimated $51,229 annually – a 95 percent increase from the $2,532 generated by the vacant parcel. FedEx will also build a new road for the town, saving Hamburg over $2 million.

Not long ago, The News editorialized on the Start-UP NY program. The News said, “It’s unfortunate that such an incentive program is even needed, but it is a fact of life in tax-and-spend New York. Such incentives are not needed in business-friendly states. But New York State, where political dysfunction reigns, is an expensive place to start and run a business. Who would come here?”

There’s an old saying used by politicians that goes: “The beauty of politics is that you never have to be consistent.” Seems that old adage applies to editorial writers as well.

Michael Bartlett is executive director of the Hamburg lndustrial Development Agency.