By Timothy Chipp
October 12, 2011
A new study released Wednesday is shedding some light on “wasteful spending” happening in Niagara County development.
Sam Magavern, co-director of the Partnership for the Public Good, released the report, titled Generating Waste, which focuses on the three most active industrial development agencies in the region, as well as the New York Power Authority.
The report addresses a lack of sufficient return New York residents are seeing on their billions of dollars invested in development each year, Magavern said.
“New York faces severe budgetary challenges and has slashed spending in most sectors of state government,” he said. “Now more than ever, New Yorkers need to take a close look at the state’s spending on economic development and the results that it is yielding.”
The report, funded through the Coalition for Economic Justice, the Niagara Orleans Central Labor Council and the Western New York Area Labor Federation, identifies 13 considerable flaws in the economic development process and possible solutions to each.
One problem, he said, is that IDAs rarely bring new businesses to the region. In 2010, he said, only one of the 71 projects IDAs were involved in within the region brought a company from outside Western New York into the area. The rest, he said, were already here and just moved communities.
Magavern’s report also says the IDAs have no requirement for the businesses receiving the money to create new jobs.
“There’s almost no job provisions in these development subsidies,” he said. “If this doesn’t get your blood boiling, it should.”
The report also questioned agencies promoting development of industries that, when they do hire, create low-income positions. Service professions, like retail and hospitality, don’t provide adequate wages for workers trying to raise a family, he said.
“The average hotel chambermaid makes $18,920,” he said. “These positions force individuals to seek public assistance just to get by, especially if they’re raising a family.”
In a statement released Wednesday, Niagara County Industrial Development Agency Chairman Henry M. Sloma disagreed with the results of the study.
He said the agency’s board accepted new proposals Wednesday to bring 74 new jobs to the community through more than $30 million in new investments.
“Our efforts are making Niagara County a more attractive place to do business as evidenced by the number of applications we have received over the last several months,” Sloma said. “These projects are generating significant economic impact for the community and most importantly creating jobs, which are providing real people with employment opportunities that otherwise simply would not exist.”
The study also addresses low-cost power generated by NYPA. He said not enough of it is staying local for residential and business consumption.
According to Magavern, NYPA is the largest agency in the industrial development game in Western New York. It provides low-cost power to several local communities, school districts and businesses, he said. But NYPA, he said, should stick to just providing low-cost power and not worry about economic development issues, which should be left to Empire State Development.
But NYPA Spokeswoman Connie M. Cullen said the low-cost power goes to create many jobs in the area, part of what economic development is all about.
“There are multiple economic development programs, created by the state legislature and implemented by the New York Power Authority, to support the companies that underpin the Western New York economy,” Cullen said. “The power allocations from these programs are linked to tens of thousands of jobs, which are critically important during these economic times.”
Generating Waste is available to the public through the Partnership for the Public Good’s Web site, www.ppgbuffalo.org.