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AREA BUSINESS LEADERS LUKEWARM ON GORSKI'S TAX FREEZE

Dan Hess isn't doing cartwheels over County Executive Gorski's pledge to freeze Erie County's already-high property taxes for the next three years.

Not that he isn't pleased to see Gorski try to stem the steady rise in county property taxes, but Hess, who has his own painting and wallpapering business in Hamburg, wonders what's next.

"It's a start," he says.

"We just can't keep raising taxes," Hess says. "We need people to have more disposable income. We need to induce businesses to come into Western New York."

If Gorski keeps his word, freezing the amount of money that Erie County will raise from its property owners at $226 million means that inflation actually will ease the tax burden of the average homeowner by a little bit during the next three years. That helps, just as the state's continuing push to reduce taxes and its new program to help ease school taxes are steps in the right direction. But there's a long way to go before Erie County or New York are ready to compete with the South Carolinas of the world without having to hand out all kinds of tax breaks and other incentives.

That's why some business leaders are giving only lukewarm reactions to Gorski's proposed tax freeze. After all, he isn't pledging to cut taxes outright.

"It's certainly a step in the right direction," says James J. Allen, executive director of the Amherst Industrial Development Agency. "But we don't want to lose sight of the fact that we've got to bring the costs down."

Andrew J. Rudnick, president of the Greater Buffalo Partnership, has a similar view. "It's both symbolically important and financially inconsequential," he says.

"That's not to belittle it, but some people say to keep property taxes where they are still keeps us non-competitive," Rudnick says. "The key is not to maintain something but to reduce the overall burden."

And what a burden it is. Consider this:

New York's state and local taxes average $4,671 per person, which is the highest in the nation and nearly 52 percent more than the national average, according to the Tax Foundation.

County taxes, including sales and property taxes, rose by nearly 72 percent -- more than twice as much as inflation -- in New York from 1985-95. But the bite won't be quite as bad in Erie County, where taxes rose by almost 60 percent, and Niagara County, where county taxes increased by 70 percent, according to the Public Policy Institute, which is the research arm of the Business Council of New York State Inc.

Despite the recent tax cuts, state taxes in New York averaged $1,878 per person last year, which was 18.8 percent higher than the national average of $1,583. But that was down from being 24.2 percent higher than the national average in 1995, according to the U.S. Census Bureau.

School taxes in New York, outside of New York City, soared by an average of 98 percent per student between 1985 and 1995, which was almost three times the 35 percent jump in consumer prices during the same period, the Business Council says.

That's why it was so noteworthy when Gorski came out with a pledge to freeze taxes. After all these years of people complaining about high taxes, state and local leaders are finally willing to do something to stem the tide.

"If it is a signal to other local elected officials to support what Dennis has started with initiatives of their own, then it is more important," Rudnick says.

If they keep it up -- and the economy holds up as well -- New York may be on its way toward shedding its reputation as an expensive place to do business. "I think companies are beginning to look at New York state as being serious about doing something" to become more hospitable toward business, Allen says.

The big question is whether the message filters down to local school boards, which in some cases have shown an alarming insensitivity to the entire tax issue. That's why 36 percent of the school budgets in Erie County were turned down by voters this year.

Of course, it doesn't take much thought to figure out why some of these initial budget proposals didn't fly. Why any school board would submit a budget that raises taxes by two or three times the inflation rate, as Williamsville (8.3 percent tax increase), Lancaster (6.8 percent tax hike) and Akron (a 5.5 percent increase) did, is almost as puzzling as the nearly 5 percent spending jump in this year's state budget.

"We really need to look at re-engineering government completely in order to be competitive," Allen says.

That's the idea behind the push toward regionalization and the notion that some government services can be shared.

But progress is bound to be slow. That's especially true since some of the region's most ambitious consolidation efforts -- from the Village of Hamburg's attempt to abolish its police department to the elimination of village government in Alden and Lancaster -- have shown that voters aren't ready to accept real and substantial changes, even as they bellyache about high taxes.

Those defeats have sent a very clear signal to local political leaders that they won't win any points with voters by supporting consolidation on a major scale. It's also why the current push is starting off by taking baby steps to find less controversial ways to save money. If those initial steps succeed -- and their supporters still get re-elected -- then they might dare to think a little bigger a few years from now.

That's frustrating, especially given the wholesale inefficiency surrounding the way that New York's government entities are structured and overlap. (What real purpose do villages serve, anyway?)

But for now, it's the best we can hope for. And at least New York and Erie County are finally heading in the right direction.

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