Published: May 11, 2008 11:22 pm      

NIAGARA COUNTY: Failing grade lingers

Last year, Niagara County received a failing grade in economics from a statewide business organization.

Months later, county officials are still trying to shake off the negative perception that comes with getting an F in anything, much less economic growth.

While county leaders once insisted the report wasn’t relevant or accurate, some are now suggesting it may well have been fair, but is no longer timely.

Members of the Republican-lead Majority in the Legislature

argue that the local economy has made significant strides since 2005, the final year considered in the Business Council’s 10-year assessment of New York’s economic vitality.

“I think we’d see a different picture,” said Legislator Clyde Burmaster, R-Ransomville, who suggested this week that county lawmakers invite the Business Council back for a second opinion.

The Business Council is a statewide advocacy group that counts among its members IBM, Verizon, Pfizer and thousands of other New York companies both large and small. Last year, the council’s research wing, the Public Policy Institute, examined five core measures of long-term economic growth in each of the state’s 62 counties.

The study determined that Niagara County, along with 30 other counties in New York, failed to meet or exceed the national average for growth in jobs, average wage per job, total personal income, per-capita personal income and population.

Michael Moran, a spokesperson for the Business Council, said his organization’s report was not intended to indict Niagara County or any other county specifically, but rather to highlight the urgent need for change in the way New York as a whole does business. The point of the review, he said, is to show that communities throughout New York, and in upstate in particular, continue to struggle mightily when compared to others states. The reason, according to Moran, has more to do with irresponsible spending on the part of state lawmakers than it does the efforts being taken by local municipalities to grow their respective economies.

“I think the local officials are sometimes operating in a near impossible situation and that’s what we wanted to document,” Moran said.

The Business Council’s F grade continues to be a sore subject for members of the Legislature’s Majority, in part because it remains a sticking point for their rather vocal critics.

Legislator Rick Updegrove took a few moments during this week’s legislative session to once again address the report, which he believes continues to cast the county’s economic development team in an unfair light.

While his own analysis revealed that the report included several inaccurate figures about the county’s population and job growth, Updegrove admitted that he now believes, overall, the assessment was probably more right than wrong, given the timeframe involved.

“I would suggest that we probably did deserve that grade,” Updegrove said.

“Did” being the operative word.

Republicans insist that the county’s economic development efforts have improved since the early part of the decade when the county — coincidentally lead by Democrats at the time — spent more money trying to become the operator for Niagara Falls International Airport than it did trying to convince private investors to do business here.

Updegrove pointed to a 2002 state audit that showed the county’s Industrial Development Agency was broke and on the verge of bankruptcy. In the years since, he said the agency has managed to turn itself around to the point where its most recent internal audit revealed a healthy bottom line.

In addition, Updegrove noted that the agency completed just five projects in 2002 as opposed to 2007 when it closed on more projects than it ever has in its history. Updegrove also claimed that the county realized more than $172 million in capital investment last year, up from $15 million in 2003.

“These are dollars that are being invested by companies in Niagara County, into their plants and into their equipment,” he said.

Legislator Dan Sklarski, a Democrat from the Town of Niagara who frequently sides with the Republican-led Majority, pointed to another prime indicator of fiscal health — the county’s bond rating. The financial institutions that determine the credit worthiness of municipalities have now increased the county’s bond rating three times in the past two years, Sklarski said.

“We are doing something right and we’re being noticed by them,” he said.

Minority Leader Dennis Virtuoso, D-Niagara Falls, said Republican lawmakers are not presenting the full picture of the county’s economy, both past and present. He noted that back in 2003, the county and its IDA, much like the rest of the country, experienced financial difficulties related to the fallout from the Sept. 11 attacks. He argued that the IDA’s decision to pursue operation of the Falls airport prodded the facility’s current operators, the Niagara Frontier Transportation Authority, to do something with the moribund airport which they had for years largely ignored.

While the Majority’s investment numbers sound good, Virtuoso questioned how much of the money has actually translated into high-quality, high-wage jobs. He noted that while county Republicans continue to trumpet the success of the county’s economic development efforts, large employers in the county like Delphi continue to cut employees and wages.

“We have lost a lot of good jobs in the county and they are not being replaced,” Virtuoso said.

One of the largest and highest profile deals touted by the Republican Majority failed to produce a single job, said Richard Marasco, who challenged Niagara Falls Democrat Jason Murgia on the Republican ticket last year. During this week’s Legislature meeting, Marasco questioned the wisdom of the tax break with AES Corp. which he said gave the company a lower tax bill at the expense of every other property owner in the county.

Marasco also took Republican leaders to task for the failed bid to land a data center for HSBC bank. He likened the mothballed $1 billion investment proposal in the Town of Cambria to an campaign trick that went away as soon as election season ended and the votes were counted.

“When I look at the bottom line of my county taxes, they went up four and a half percent,” Marasco said.

Legislator John Syracuse, R-Newfane, said it’s clear to him that legislators on both sides of the aisle could do more to capitalize on bond rating increases and other positives developments within the county. The key, he said, is getting down to the business at hand.

“We’ve got a lot of good things going on here,” he said. “Let’s get to work.”

Moran said the Business Council has a new analysis in the works and intends to release its latest findings on economic growth later this year.

While the focus, he said, remains on trying to convince state lawmakers that they must reign in spending, cut taxes and address the “economic crisis” they have created in New York, he said the Council does have some advice for what municipalities at the local level can do to become more business friendly. The list of recommendations includes consolidating unnecessary and overlapping levels of government, sharing municipal purchases and services and, above all, advocating for much-needed fiscal reform at the state level.

“It’s like the state Legislature, over the years, has built a brick wall and they keep adding bricks to it,” he said.

Contact reporter Mark Scheer at 282-2311, ext. 2250.