Think Tank

NYC industry to gov: A little help here?

Posted in:Think Tank.

New York City’s manufacturing base is hurting as much if not more than upstate’s

By Assemblyman Joseph Borelli

“Linoleumville.”

The thought of naming a once-bustling neighborhood on the West Shore of Staten Island after cheap flooring is enough to make any realtor cringe. Yet that’s what we called it in the early 20th century — because, back then, American Linoleum, like so many other manufacturers, helped stoke New York City’s population boom and drive its economy.

The systematic erosion of those industries here has eviscerated livelihoods, making it surprising that Gov. Cuomo’s new, otherwise laudable proposal to cut the corporate tax on manufacturers to zero excludes the counties of the MTA region, including New York City.

Like in much of upstate, city neighborhoods once boomed thanks to the companies and workers here who forged brick, sewed garments and brewed beer. Staten Island alone was a home to manufacturing giants like Procter & Gamble, S.S. White, and Bethlehem Steel.

But as the post-WWII prosperity dwindled, manufacturing began its long decline as companies moved to more welcoming municipalities elsewhere. The old breweries of Brooklyn dried up and Manhattan’s market share of the garment industry shrunk.

Even more recently established companies like Colavita, makers of one of the nation’s most popular olive oils, left its Staten Island home for greener pastures, quite literally, on the other side of the Kill Van Kull.

Between 2001 and 2008, New York City lost manufacturing jobs at a higher rate than any other region in the state, with Manhattan, Brooklyn and Queens the first, second and fourth biggest losers.

More manufacturing jobs were lost in Manhattan alone than in all of Western New York. Long Island suffered nearly the same number of losses as those in the counties of the Southern Tier, North Country and Capital Region combined.

Yet Cuomo’s proposal would make our region less competitive than counties elsewhere in the state, further entrenching the upstate-downstate divide.

Looking at it from a different angle, the state’s overall franchise tax on manufacturers is already extremely competitive compared to its neighbors, with most paying just a 3.25% rate. Reducing this to zero upstate will only comprise a $25 million annual reduction to the tax burden on businesses there, a small fraction of Cuomo’s overall plan to slice taxes by $2 billion.

Including downstate manufacturers would not significantly raise this bill, but it would prevent an economic wall from forming between downstate and upstate.

Cuomo has taken the right approach on other related tax reductions. His goals of reducing the overall corporate franchise tax, a property-tax rebate for all manufacturers, and the immediate sunset of the 18-A energy assessment for industrial users will all help lower the operating costs of new and existing businesses across the state. This universal approach should extend to every policy proposal aimed at making New York more desirable to new ventures and more competitive with our neighbors.

New Yorkers are once again beginning to take pride in merchandise made in the city and its surroundings. The popularity of products from the Brooklyn Brewery and Uncle Louie G’s ices is evidenced on store shelves all over the city.

These two and many other companies here have benefitted from the city’s outreach and programs to attract them. Our state government needs to recognize their significance and not make the same mistakes that drove the twentieth century linoleum industry straight out of Linoleumville.

We don’t want the Brooklyn Brewery to ever consider leaving Brooklyn.

Borelli, a Republican, is the New York State Assemblyman representing Staten Island’s South Shore.