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SOUR, MYOPIC ATTITUDES DON'T HELP THE BUSINESS CLIMATE

So much for talkin' proud.

The reality, as spelled out last week by a new Fortune magazine survey, is that local executives think the business climate in the Buffalo area stinks.

When Fortune and the Arthur Andersen consulting firm surveyed 15 local executives to find out what they think of Buffalo as a place to do business, they didn't paint a pretty picture.

In fact, they painted such an ugly picture that Buffalo finished at the bottom of the survey, giving it the dubious honor of being among the worst places to do business among the 75 North American cities surveyed.

For the most part, what the executives had to say about the area was right on target and wasn't anything we didn't already know. The region's taxes are stifling, there's too much government red tape, too little venture capital and it's too hard to convince good people to move here.

Yet their responses also indicated that there isn't a whole lot of appreciation for the steps that have been taken lately to cut taxes and ease regulations on the state level or that County Executive Gorski's proposed budget would finally start trimming property taxes -- and spending -- on average at the county level.

"There just doesn't seem to be a recognition of it, and that's what's dangerous," said State Sen. Dale M. Volker, R-Depew. "We have a tendency to kick ourselves, and that's foolish."

Maybe that's because the tax and red tape gap still is so wide, compared with other parts of the country. Or maybe it's because the economy here, while better than it's been in years, remains weak, adding jobs at just a 0.3 percent annual rate.

That gives Buffalo a job growth rate that's about one-eighth the national rate of 2.3 percent. In other words, while the rest of the country is adding 23 jobs, Buffalo is creating three.

Given all that, it's little wonder that the region's economic development efforts in recent years have been focused mainly on keeping what's already here from moving away, rather than trying to convince companies from other parts of the country that they ought to move here.

That's also why virtually no local company embarks on a major expansion project here without first getting lucrative tax breaks from state and local governments.

It's why a company like Sinclair Broadcast Group Inc., which couldn't leave Western New York even if it wanted to, can get almost $2.3 million in tax breaks simply by threatening to move out of Erie County to Wheatfield. Then, of course, it ultimately agreed to build its new broadcast center for its six radio stations on the waterfront in downtown Buffalo.

It's why the owners of the popular Grandma Mora's Mexican Restaurant can get $84,000 in low-interest loans to reopen their burned-out eatery in a vacant building on Hertel Avenue.

Granted, the new broadcast center will give a boost to the efforts to develop the waterfront, which is a justifiable reason for providing the handouts, but it still is a dose of nasty tasting economic medicine. And there's no reason at all to give subsidies to open a restaurant.

Part of it also is the need to keep up with the Joneses. The Fortune survey rated Salt Lake City as the third-best city for business in North America, yet Utah still grants numerous incentives to its businesses, including a full exemption from the state's 6.5 percent sales tax for manufacturers buying replacement parts and machinery, as well as equipment for expansion.

Nobody's going to turn down a handout if someone is willing to give you the money, but the fact that so little gets done here without a gift from taxpayers shows how hard we think it is to make a a go of it in business here.

"The first instinct is to try to get some kind of extraordinary support because there's the feeling that it's the only way you can compete," said Andrew J. Rudnick, president of the Greater Buffalo Partnership.

That's why Rudnick said any plan to market the area has to include a component that is aimed at getting Western New Yorkers to form a better opinion of the area's economic climate. That's what the chamber's old "We're talkin' proud" campaign tried to do during the dark days of the mid-1980s.

"We have a bunch of positive attributes," Rudnick said. "Our negative attributes are our taxes and our business climate, but there's not enough recognition here and elsewhere of our positive attributes."

The trouble is, the negatives tend to overwhelm the positives. For instance, the Fortune survey found that Buffalo had the ninth-lowest cost of living of any U.S. metropolitan area with more than 750,000 people.

Not bad, right? But the cost of living index didn't include most state and local taxes. And around here, that's a lot to leave out.

So there's still a long way to go. And the competition isn't standing still either. Other areas also are cashing in on the strong economy to lower their social services costs, cut utility rates by introducing competition and reap the spin-off benefits from their more robust job growth.

Unfortunately, it's going to take Buffalo a long time to catch up.

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