Montgomery County IDA, Capital District
Beech-Nut, the baby food company, received $104.5 million in tax exemptions in 2008 from state and local tax subsidy programs, including the Montgomery County IDA. The subsidies were granted to Beech-Nut in order to build a $124 million state-of-the-art facility in the Town of Florida—22 miles away from its current facility in the town of Canajoharie. According to the Mayor of Canajoharie, the move threatened hundreds of jobs and millions of dollars in tax revenue, particularly to pay the town back for infrastructure improvements made on behalf of Beech-Nut.
As a result of the move, Canajoharie will lose tax revenue of more than $130,000 a year. Extended over the life of the 13-year PILOT agreement, the village will lose nearly $1,700,000. With Beech-Nut gone, other jobs are threatened. Beech-Nut generated steam in its factory that was used by neighboring businesses as an energy source. Without this cheap source of energy, there is danger that other businesses besides Beech-Nut will leave town.
Beech-Nut awarded a major portion of the construction contract for its new facility to an out-of-state company. The project could have employed 25 to 30 local iron workers for four months and could have generated more than 23,000 hours of work and $1.1 million in wages that would have gone back into the local economy.
While some claim that keeping Beech-Nut in New York is a coup for state officials, shifting jobs from one town to another at huge taxpayer expense is nothing to be proud of. The Governor’s office is now working to develop a financial assistance plan for Canajoharie. Ultimately, taxpayers are paying twice – once for an unnecessary relocation, and once for the devastation such a relocation causes to the town left behind.