The State (and Fate) of Doing Business on Long Island Today

Stepping In

“We can no longer afford to have government operate as if businesses are always going to want to be here no matter how long it takes [to get building permits approved] and no matter how much it costs in our region to operate,” says Suffolk County Executive-elect Steve Bellone after meeting with local business leaders last month at a business forum in Melville. “We know that businesses are being recruited off Long Island every day…and if we’re going to reverse that trend…we need to fix these governance problems.”

He’s promised to speed up the permit process and encourage municipal cooperation.

“We have to stop thinking of ourselves as separate municipalities and separate counties. We are one region,” Bellone says. “What we have to communicate to everyone in Suffolk County is that if you want to protect your family and your property values and your community, then you also have to be thinking about what’s good for the region as a whole. Because if [you] don’t think of things collectively as a region, you will end up hurting your property values and your family.”

His sentiment is shared west of the county line.

“Long Island has lost too many jobs to other states,” says Nassau County Executive Ed Mangano in a statement. He says that his administration and the Nassau County Industrial Development Agency “are working tirelessly to retain employers and keep jobs in Nassau County. Together, we have worked with the private sector to create 1,300 new permanent jobs, retain over 800 local jobs and generated over $1 billion in new economic activity.”
He adds, “Government must do all it can to remove obstacles to job growth and help employers weather this economic storm.”

Earlier this month, Mangano and officials of the Nassau IDA attended a ribbon-cutting ceremony in Plainview to mark the opening of new corporate headquarters of the BWD Group, LLC, one of the largest private insurance brokers in the country, which will keep its 147 high-paying jobs on the Island instead of moving to Pennsylvania. The IDA gave the firm a $475,000 break on sales tax for purchasing new equipment as well as a 15-year payment-in-lieu of taxes agreement, which reduces its property tax bill.

InvaGen Pharmaceuticals in Hauppauge is about to open a new factory there thanks to incentives from New York’s Empire State Development Corp. and the Town of Islip’s Industrial Development Agency, with predictions that the new location may lead to the hiring of more than 350 employees.

CPI Aerostructures Inc., a defense contractor in Edgewood, said that in return for $900,000 in tax incentives, it would create 890 jobs on LI by June 30, 2015.

“Canon is a great example of what happens when entities in government work together,” says David Calone, chairman of the Suffolk County Planning Commission. But the problem, he adds, is that “we have these various economic development groups that are actually competing against each other in many cases.” He mused that it’s “bad enough when you have other states coming in…”

He says it’s very hard for LI to attract businesses because of the high taxes and expensive energy costs.

“We can do a much better job of helping the businesses that are here thrive here,” he says. He describes two contrasting approaches to economic development: “hunting and gathering, where you go out and you try to poach companies from other places” and the other is “economic gardening…because it’s so much easier to grow an existing business than it is to try and spend taxpayer money to try and recruit businesses from out of state…. If people are playing offense against us, we need to play better defense, and that’s what economic gardening is all about.”

Marc Herbst, executive director of the Long Island Contractors’ Association, which represents the heavy construction industry, says that Canon is a bright spot in an otherwise bleak landscape, although “there’s a lot more discussion than we saw a year ago” about big projects like rebuilding bridges, highways and sewers, to name a few.

“There’s a lot of dialogue but the actual dollars remain to be seen,” he says, adding that a big concern the contractors have, as well as those members of the operating engineers union, the men and women who drive the pay-loaders, graders, and bulldozers, for example, is that the last three years of the state’s five-year capital program has not been funded, and it expires next March.

“So we have no plan,” he says, “and no major projects for Long Island on the books right now.”

By contrast, on the local level, many municipalities have capital programs but haven’t borrowed funds for such projects amid declining revenue.

“So even though things are on the books, the actual construction hasn’t taken place,” says Herbst. “If you don’t have the dollars, you can’t plan.” He hopes that Gov. Andrew Cuomo’s next budget will have a better funded capital program, but says the state is dependent on the federal government and “they’re still playing games” in Washington.

Meanwhile, the construction trades continue to hemorrhage jobs, going from 70,651 people in 2008 to 58,743 last year and averaging out to 52,221 in the first quarter of this year.

“For every job in our industry, the ripple effect is three jobs,” Herbst says, citing LICA studies. “Just getting this industry back to 2008 levels could create 40,000 to 50,000 new jobs throughout the region,” his organization reports, and “that would provide a significant infusion of dollars into a stagnating economy, spur tax receipts and aid Long Island’s path to economic recovery.”