Friday, January 26, 2018

Cell phone safety tax needs to be put where it belongs

If you take a look at your cell phone bill you will see a $1.20 line item called the “New York Public Safety Communications Surcharge”. Originally appearing as an E911 tax, it was put into place in the 1990s – at $0.70 per month – to provide the state with money to upgrade 911 call centers and public safety communications systems. 

By intent, it was a worthwhile tax as emergency dispatchers needed to keep up with the explosive development of wireless phone technology. Plus, as we unfortunately saw during the horrific events of 9/11, interoperability of two-way devices for police officers and firemen was a “must-have” that they didn’t have at all.

But, intent and realty are two entirely different things, especially when it comes to government and money.

Misappropriation might be too strong of a word (since it implies criminality), but there is likely no more accurate term to describe the state’s ongoing misuse of this tax. Of the $14.40 that you pay into the purported use of the tax each year, only around $5.00 goes to where it belongs. The rest -- $9.40 – is put into the state’s general fund and spent on anything under the sun.

At first glance, it may seem like a pittance to some folks, but consider the growth of the cell phone industry since the tax came to be. Cell phones of all shapes and styles are now used by what seems to be every man, woman, and, yes, child in the Empire State. What once was a luxury has taken on an air of necessity. The family that used to share one landline now has wireless devices for everyone in the household. Putting that to numbers: Last year, there were over 238 million cell phones in the United States.  In 1991, when the legislature introduced the tax, there were only 7.5 million cell phone subscribers in the country. That’s a lot of new sources of revenue from which our state – and others – reap.

In recent years, New York State has collected over $185 million annually from the tax. That number is set to grow as, one, more smartphones and tablets are being put into circulation, and, two, the state just put into play in December a revision to the tax that collects another 90 cents at the point of sale on pre-paid phones.   

In most years, only a third to 40 percent of the funds are put to use across the state for their intended purpose. This has been hanging out to dry local taxpayers as their municipalities upgrade their communications system to meet today’s needs and expectations.

Case in point, consider what happened with the new police and fire radio system that was launched in Niagara County two years ago. It was not only necessary by federal mandate (a 9/11 aftermath), but also by actual need: If you listened to the police scanner before everyone went digital in 2015 you heard numerous first responders struggling to communicate with dispatch from radio dead zones throughout the county.

At a price tag of $10 million it wasn’t a cheap investment. Of that amount, only a fifth was funded by the safety communications tax when in theory -- and actual designation of state law -- it should have been fully funded by the cell phone tax. The other $8 million to cover the County’s project had to come from cash flows and borrowing of money….local taxpayers were footing the bill.

It shouldn’t be that way. The state isn’t playing by its own rules when it comes to the tax. It shouldn’t hold the purse strings and pit county against county through a “competitive” grant process for them to get back just a fraction of the amount that was collected. By doing so, the state is tightening the thumb screws on already cash-strapped municipalities and taxpayers while sacrificing their safety in the process.

This legislative session, the Governor and the Legislature need to develop real strategies to keep the tax out of the general fund. They need to do with the tax exactly what was intended, after all, the state already digs into our phone bills at a 4 percent clip every billing cycle. Let them have that and let us have what we deserve and what we need. 

From the 29 January 2018 Greater Niagara Newspapers and Batavia Daily News

Thursday, January 18, 2018

45 years of business: New York hasn’t made it easy

This week, Confer Plastics celebrates 45 years of business. It’s been an exciting ride, one that has seen our company and people redefine the industry, invent everyday items, and positively affect our coworkers, customers, and community.

It hasn’t been easy. There have been 6 recessions and 9 US Presidents over that time, all with their own impacts and nuances. On top of that, competition has been tough – whether those foes have operated domestically or abroad.

The hardest part of it all, though, as you may have guessed from 13 years of this column, has been running a business in New York. It’s been downright difficult to weather all those storms when it seems like state officials have conspired against small businesses. Around here, we like to say that our success is despite – or in spite of – Albany.

When my father and late-grandfather opened shop in 1973, it was the Golden Age of manufacturing locally. North Tonawanda, Tonawanda and Niagara Falls were hot beds, with factories and machine shops employing thousands in production and the skilled trades.

But, a lot can change in 45 years. Drive down River Road or Buffalo Avenue in the Falls and you’ll see that with brownfields, shuttered plants, and the faded memories of countless men and women punching a time clock and making things.

Where did they all go?

Some business died while many more set-up shop in greener pastures. For some industries it might have been somewhere in the States, like the Carolinas, Indiana, or Tennessee.  For others, it could have been foreign locales like China or Mexico.

That mass exodus of manufacturers was an outcome of New York’s ever-growing cost of doing business. Not a State of the State goes by without a call for new revenue sources or new ways to regulate the day-to-activities of the Empire State’s productive sectors.

They add up. Boy, do they ever!

If I look at cost factors that are directly impacted by Albany – such as electricity, various forms of insurance, and property taxes – my company pays $750,000 more (every single year) for those items than do our competitors from other states.

While $750,000 is a lot, it might not represent my team’s entire competitive impasse. I never really included the cost of labor in that equation because it’s never been an issue – until recently. Once New York started ramping up the minimum wage rate dramatically, it impacted us.

We don’t pay the minimum wage; we’ve always started off our entry level personnel well above that rate, ensuring we get the best job candidates. But as the minimum wage rose, we had to move that gap accordingly. But, we also have had to pay all who work for us (from the least experienced to the most experienced) an equal increase so as not to create a disenfranchised workforce -- we can’t reward those just starting while ignoring the others who helped get us to where we are.

By doing so, I have to assume that beyond what would have been regularly-scheduled, incremental wage increases of our own decision, we are being forced to add $500,000 to $650,000 to the cost of labor every year versus that which states with lower minimum wages would have to shell out. That competitive disadvantage will exist until other states’ minimum wages change…if they do.

So, our consistent $750,000 burden all of sudden is looking like more than $1.25 million.

That’s an almost unbelievable and insurmountable burden to doing business in the Empire State, especially given the fact that we are competing against manufacturers from around the globe. In a business world where purchasing managers try to save every penny they can, our added cost is a killer.

We could be bigger. We could have our bank loans paid off. We could employ more people. Instead, we end up paying for the “privilege” of doing business in New York rather than investing more in the company and our people.

We’re just one company facing that situation. Many more did. But they either withered or left. Many more are, and they, like us, praise every day that they can turn on the lights and keep people employed.

I don’t care if someone is operating a factory, a farm, a restaurant, a boutique, or a doctor’s office in New York. It’s not easy for any of us.

There are the costs, then there are all the rules. Just look at what 2018 has brought: Businesses are being saddled with the most extravagant paid leave system in the country, they are likely looking at the passage of some onerous employee scheduling rules, and there’s also the potential of a huge headache in the form of a payroll tax.

But, we, just like the moms and pops, keep plugging along, doing what we can to take on the competition even though the odds are against us from the start, odds created by the very state that is supposed to be looking out for the best interests of its economy and citizens.

It’s been a tough fight for 45 years, and, despite those woes, I plan to have the Confer family and all the families that work with us keep fighting for at least another 45.

From the 22 January 2018 Greater Niagara Newspapers and Batavia Daily News

Friday, January 12, 2018

Let’s welcome people from (expletive) countries

It’s like riding a roller coaster with Donald Trump as our President. He’s a man of extreme highs and lows.  

There are things he does that I absolutely love. An example would be tax reform, something I am fully confident will lead to outstanding economic development, giving small businesses and their employees more money and success.

But, then, he’ll say or do things that totally gross me out. He often comes across as someone having less intelligence and class than a Neanderthal and you worry about how his world view will impact public policy. Case in point, his recent commentary behind closed doors when he wondered why America would welcome immigrants from (expletive) countries.

Why wouldn’t we welcome them? They want the exact same things my ancestors and Trump’s wanted when they came to America from similar (expletives)   – a better quality of life, economic opportunity, and the chance to live the American Dream.

Some immigrants from today’s (expletive) nations have been getting world-class educations in our universities and saving lives here as our best and brightest doctors and scientists.

Many more -- the folks I am most familiar with -- are doing great work at factories and farms all across the country. They are taking on work that recent generations of Americans have been raised to believe are beneath them. Because of that, you have products in your department stores and produce in your grocery stores. Take away those first- and second-generation Americans and who’s there to keep the productive sectors of the economy chugging along? 

I have the honor of working with 50 people who were not born in the United States. One out of every five coworkers came here as an immigrant or refugee and, they, like the American-born folks in our plant are putting in an honest day’s work that allows them to do whatever they’d like in their personal lives, whether it’s raising a family, buying a car or home, saving for retirement, or investing in their own business.

It’s not coincidental that since bringing on a lot of refugees we’ve had some of our best years at the plant. Sure, there are a lot of circumstances, people, and ideas that have led to our success, but it helps to have teammates possessed of a desire to make their lives better, which, in turn, makes the company, the community, and the country better.

They might come from (expletive) countries but they don’t hold (expletive) attitudes or possess (expletive) work ethic. I often cite as the perfect example a circumstance concerning a Vietnamese fellow I work with. While working on one of his numerous Buffalo apartments (there’s that American Dream), he took a bullet from a random shooter that lodged in his skull. He came to work that same night and I had to forcibly tell him to leave and get it taken care of!

While Trump is dead-wrong about the quality of people who come here from other lands, he is dead-on about them coming from (expletive) countries. If anyone takes offense to that part of his rant, then they need to brush up on world events. Just look at one of those countries that wasn’t verbalized but is no doubt on Trump’s list – Myanmar, where many of my coworkers hail from

For years, Myanmar (or Burma) has been besieged by what is classified as the world’s longest-running civil war. My coworkers were displaced from their homes, sometimes violently, and were forced to live in refugee camps that were so deplorable that if we had sheds on our properties that looked even remotely like them, everyone one of us would tear them down. Even today they look back at their homeland with broken hearts for, in just the past six months alone, the Myanmar army has butchered 10,000 of their loved ones and forcibly relocated 650,000 Rohingya Burmese.

It is (expletives) like that from where we should welcome people. Their homes, families, and lives have been destroyed. There is no hope for them in their homeland.

But, there is hope in America. It’s the same hope that we all have raising kids, going to work, and enjoying the incredible freedoms and pursuits that we do. Why wouldn’t we want the very best for others, especially those who come from the very worst?

From the 15 January 2018 Greater Niagara Newspapers and Batavia Daily News