Canadian shoppers are responsible, in a very significant way, for much of the sales tax revenue, which is generated here in the North Country.

The effort by Essex County to ratchet up their sales tax rate, and the recent decision by Clinton County to impose a bed tax, is additional evidence that visitors to our area, from Canada and elsewhere, will soon shoulder a greater portion of the local tax burden than ever before.

It is a welcome prospect for local property owners whose property tax bills have risen mercilessly and without regard to household income.

With this relief, however, comes risk.  Local governments that share in the booty from retail sales are now even more vulnerable to the economic downturns which are inevitable in a free market economy.  But unlike large banks and state governments, our towns, counties, and small cities like Plattsburgh, do NOT employ economists. Overly optimistic projections for sales tax revenue can and will give way to the harsh realities of a sluggish economy. And local governments are not allowed to engage in deficit spending. In such cases they are forced to raise taxes.

By the same token, ridiculously low (sales tax) revenue estimates, will trigger anger and frustration among local taxpayers, whose tolerance for large budget surpluses is minimal.  The roulette table at Akwasasne would be a kinder and gentler experience.

But for now, the revenue projections are fairly simple. Many people are spending less at the mall and more at the pump. And while some taxing jurisdictions will reap a windfall from the higher gas prices (what you pay for a gallon of gas includes a sales tax), most of these local governments will expect an overall decline in sales tax revenue, or at least a decline in the rate of increase in sales tax revenue.

A word, however, to those wise and often prescient budget officers: Be thou not hasty, nor optimistic, nor foolish, for yours has become a dangerous profession indeed.

Senator Hillary Clinton’s recent visit to Rouses Point for a well deserved “thank you” celebration underscored what a true economic development miracle it was, that before Wyeth Labs could make good on its promise to abandon their Rouses Point facility, a new company-in this case Akrimax- would arrive on the scene to take Wyeth’s place.

In the annals of economic development, it is virtually unheard of that a major employer could be lost and then replaced so quickly. And in the instance of Akriamx, it appears that few if any jobs will be lost.

That is an astounding economic development coup, which some credit to luck, others to Senator Clinton, whose ears were to the ground after yet another one of Garry Douglas’s lobbying efforts, and still others to the power of prayer. (At least one church in the Northern Tier had been praying for a successor company at every Mass, on every Sunday, since the closure announcement was made.)

But once you get beyond the luck, the effort, or the divine intervention which brought Akriamx and Wyeth in to the same room, there is yet another reason for this dramatic reversal of Rouses Point’s misfortune.

It is the North Country workforce.

Time and time again, before, during, and after Hillary Clinton’s visit, there were constant references to the outstanding work ethic of the North Country’s working men and women.  Akrimax officials claim it was the most important reason for their decision to locate in Rouses Point. It is a familiar refrain to those of us who have been working in the trenches of economic development.  Indeed, the number of Canadian companies who have settled in our area and who regularly speak the praises of our local workforce, now number in the hundreds.

And so, I thank Senator Clinton, Garry Douglas, and the good Lord, for whatever role they played in that Cinderella story we now call Akrimax.

But I thank most of all, the men and women at Wyeth, whose job may have been to make tablets, but whose labors produced one of the North Country’s most spectacular economic development achievements, ever.  

Have you ever wondered what leads up to a decision by a Canadian company, to locate in Clinton County? It doesn’t happen by magic. 

A few weeks ago I attended a “Red Carpet Day” at the Chamber of Commerce office. It’s a term which yours truly coined, many years ago, when a group of local professionals decided that we should “roll out the red carpet” whenever a Canadian company expressed an interest in our region.

These half day sessions include free time with a lawyer, accountants, immigration consultants, plus all sorts of one-on-one assistance from a Customs Broker, a Realtor, the NYS Department of Labor, the Empire State Development Corporation, local bankers, insurance experts and, of course,  the Chamber of Commerce.

It has become a crash course in the “do’s and don’ts” of doing business in the United States. And the Canadian business people who “graduate”, very often decide that Clinton County will indeed be their new home.

Even those who decide NOT to come south of the border, will go back to Canada and speak our praises as a community where the teamwork, the genuine willingness to help, and the collective expertise is unlike anywhere else in the country.

There are a host of unsung heroes who regularly donate their time to these meetings, and with no guarantee that there will be a paying customer, down the road. It speaks well of the local business community and of the Chamber, who regularly hosts such affairs, that these behind the scenes efforts continue to take place and that they have been so very successful.

It’s all part of the Canadian connection and while it didn’t happen by magic, the results have certainly been magical. There are now more than 275 Canadian owned companies in Clinton County.

The proposal to cap school spending is of interest to all property tax payers, but also to our Canadian friends, who despite a stronger dollar are still experiencing “sticker shock” when they cross the border and “shop” for new investments.

It is a surprise to them that in a relatively rural area like Clinton County, which cannot hope to offer the municipal services found on the island of Montreal and its environs, property taxes are roughly the same or even higher, south of the border.

It means that local tax payers are the victims of a double whammy, first the pain that comes from our property tax bills, and then the pain of knowing that new investors who could expand the tax base and thus reduce our collective burden, are going elsewhere with their money.

Meanwhile, in Albany, the old canard about school spending and a good education has once again resurfaced. The theory is that if you force the schools to limit their spending to 120% of the inflation rate, even these increases will not be enough to ensure that NYS students receive a decent education.

The value of that conclusion is best realized if you bag it and then spread it on a corn field.

New York City has proven time and time again that more money is NOT the solution.

Under Mayor Bloomberg, spending on NYC schools has increased from12.5 BILLION dollars to 20 BILLION dollars, and students’ performance on standardized tests are either the same or worse.

New York State as a whole now spends more per pupil than any other state in the country, with similar results. Our spending for instructional salaries alone is now 77 percent ABOVE the national average. And yet, the most vocal opponent to a tax cap is the teachers’ union.

A child’s performance in school is affected first and most by the environment at home. It’s the first argument you’ll hear when you ask why all of that money we’ve been spending is producing little or no results.

Why then are we now being told that even a spending rate which is in excess of inflation, will somehow drastically disrupt our children’s education?

Call me the class idiot, but teacher ain’t making a whole lotta sense these days.....

False claims to US citizenship are discernible by a well trained inspector, whether a passport is available for examination or not.

It is the one claim to citizenship that US inspectors are best trained to evaluate.  A few quick questions about the traveler’s elementary school, the Pledge of Allegiance, or family members, is often more than enough to warrant a more thorough secondary inspection.  Once inside the facility, it's just a matter of time before the DHS’ vast resources will prove or disprove the claim to citizenship. And when you add to that scenario, the fact that the traveler would also possess a driver’s license, which proves at least residence, the conclusion is obvious: anyone living within a hundred miles of the border should be exempt from the passport requirement.

Ironically, the US government has simultaneously designated the nationals of 38 different countries, "visa exempt".  It means that citizens of these countries can present themselves at one of our airports or at a land border crossing, without first going to the US Consulate in their homeland, for a background check. It also means that the border crossing guard MUST rely on that traveler’s passport to ascertain a false claim to citizenship.

I checked the list of visa exempt countries. “Citizens” of Botswana, Liechtenstein, Paraguay, Venezuela, and Andorra are just a few of those foreign nationals who now have the privilege of  entering the US with no more than their passport.  So if you’re a “bad guy”, why even bother with a fraudulent US passport?  Why not alter the one you just purchased or stole from a native of Botswana, and take the chance that a border crossing guard is unlikely to notice the difference?

Canadians have been visa exempt for years, and their passports are now a hot item on the black market.  Thefts are at an all time high.  But the Canadian authorities are moving fast to remedy the situation and make their passports more fraud proof. US auhorities did the same thing years ago and now our pasports are increasingly unpopular on the black market.

After a speaking engagement at the Noon Rotary Club, this past Wednesday, I was asked a question about the Champlain border crossing. Why, asked the attendee, do they have only two of six or seven lanes actually open when traffic is backed up and the wait-times are unreasonably long. And, he added, what would 10 or 12 new lanes of access accomplish, after the current construction is completed, if again, the decision is made to open only two lanes of access. It was a devastatingly simple but clearly valid inquiry.

Management at the border will tell you that they carefully monitor the wait-times and take action when the lines reach a certain distance. They’ll also argue that they have a solemn duty to conduct their primary inspections such that national security mandates are satisfied. They will tell you that not all of the uniforms you see in the main lobby are “cleared” for service out on the line.  They will tell you that passengers in the lobby are a drain on the number of officers available for service in the traffic lanes.  And they will add that a myriad of new duties have put a strain on their manpower levels such that occasional back-ups are to be expected, even though their staff has more than tripled..

Herewith then, a dose of reality.  In fact, and I base this on the many hours I have spent at the border crossing, Champlain’s shift supervisors are more often than not, very slow to respond to what is actually happening out on the line. Why that is, I don’t know. But they have had, at this point, more than enough time in which to train their new officers. The training they have accomplished, however, has been poor, most of it being in the classroom and not nearly enough of it, out on the line.

We know this because it is only when you put a senior, more experienced officer in the field with a novice, that the novice will learn what I call “good judgment”.  And that is sorely lacking at our local border crossings.  Witness the decision to admit a man with infectious tuberculosis and the time-proximate decision to impede the entry of a volunteer firefighter, along with his equipment and his fellow volunteers, even as the smoke from the nearby fire wafts overhead. Poor judgment in both cases. And when you notice an inspector on the line who has detained a traveler for an inordinate period of time, that too is poor judgment. If the driver or his passengers have aroused that much suspicion, then send him inside. The primary lanes are NOT designed for secondary inspections.

There is also the phenomenon, which I have personally witnessed on dozens of occasions, wherein an inspector in the lobby is allowed to do nothing at all, because he has not yet been trained to accomplish the task at hand. And the supervisor in charge takes no action, either to show the new inspector how to do the job, or even to ask that a more senior inspector do the instruction.

Please don’t blame the uniformed man or woman out on the line or even in the lobby. They WANT to do a good job. These problems are management problems. But until someone makes some changes, our $100 million dollar “Port of Excellence” will be the most expensive two lane road on the U.S. Canadian border.    

The folks from Laurentian Aerospace have apparently recovered from the setbacks which occurred last year when the banking industry took a hit.  Their effort to raise millions of dollars in the capital markets is now back on track, and to the extent that they may ultimately succeed, we should all share in their “cautious optimism”

Their business model, the use of a relatively new technology to significantly reduce the cost of FAA mandated maintenance activities for owners of wide body jets, is of greater interest to the airline industry than ever before.

Now, more than ever, the big airlines, most of whom are suffering financially, need the cost saving measures which will be made available to them, should Laurentian find the money they need, to build North America’s first multi-docking system.

And, Laurentian’s investors know this, hence the recent progress which has been made toward their goal of adequate start-up financing.

And while we cannot slow, much less cease our efforts to attract other aviation related business and industry to our area, this particular initiative would have the effect of propelling the entire North Country forward, in an exponential way.

Commercial real estate, new home construction, existing home sales, high paying jobs, and dozens of satellite businesses (suppliers) are all a distinct possibility, if Laurentian can pull it off.

We should hope for the best and plan for the status quo. But if Laurentian’s plan should become a reality, the entire economic paradigm here in the North Country will shift, within the next five years. Our challenge then will be to manage massive and sustained economic growth.

I’m old enough to remember when we hired Garry Douglas at the Chamber of Commerce…Herb Carpenter was the out going Chair of the Board…I was within days of trying to fill his great big shoes.

It was a tough time for the Chamber....we had just discovered an apparent embezzlement, our insurance carrier was clamoring for what they believed were unpaid premiums, and we were bleeding memberships. We were also an organization in transition. Garry’s predecessor, Amy Whitehead, recognized that we were obligated to do much more than promote tourism and host the occasional October Fest.  But how to do it, where to start.

When Garry showed up on the list of candidates, there were some who expressed concern that a Beltway veteran (Garry had spent a dozen years with Congressman Gerry Solomon), might not be an appropriate choice for a Chamber which faced extinction if it did not change and grow.

But there was genuine concern among the search committee members that we no longer had the luxury of a local focus.  What was happening in Albany and Washington was having an effect on Plattsburgh. And there were even a few of us, VERY FEW, who were now looking north to Canada for new business and industry, a novel concept at the time.

Eventually there emerged a consensus. And while some argued that the Chamber was “going political”, the majority said it was high time we start to advocate and advocate loudly for the interests of business, both here at home and in the legislative capitals of New York, Quebec, Ottawa, and the United States.

The decision by Site Selection Magazine, the nation’s journal of record for economic development organizations, to recognize the Plattsburgh Chamber as one of the best in the country, is symbolic of the distance we have traveled in the years following Garry’s arrival.

And yet, he would be the first to tell you that it has been a team effort, all the way.  The County Legislature, the Development Corporation, the City & Town of Plattsburgh, unsung heroes like New York State’s John Massella, Randy Beach, Roseanne Murphy, plus a slew of  bankers, lawyers, accountants, and business specialists, who went on the road to promote the North Country and brought back with them hundreds of new, mostly Canadian,  employers. They’re all heroes in my book.

Site Selection Magazine has, once again, put the spot light on our region. But we came out of the darkness when Garry Douglas lit the first candle.

I heard an interesting analysis from an economist yesterday, who argued that the stimulus checks will actually hurt our retail sector.

The reason being that retailers, including those here in the North Country, are offering discounts and sale prices, that would not ordinarily have occurred at this time of the year.  They’re doing it, of course, to attract those shoppers who have rebate money to spend.

As a result the retailers’ margins will be lower than normal and that will hurt their bottom line at year’s end.

The impact here in the Plattsburgh area will be even more negative, because our Canadian friends will take advantage of the same discounts and sales….

Negative thinking or common sense?

Word is that NY's Property Tax Commission will recommend a cap on school property taxes.

Unfortunately, it will be, as my friend Joe Lo said yesterday, "dead on arrival", because the Assembly Speaker is opposed.

The economic growth of our area will slowly grind to a halt if we do not check the rate of growth (2 & 3 times the inflation rate) in property taxes.  Albany and Washington have to stop with the unfunded mandates, and our schools in particular, have to tighten their belts, beginning with teachers' contracts, the bus garages, and the exponential growth in "special needs" programs, which in SOME cases, have become an easy way out for staff and adminstration who might otherwise have to deal with what we USED to call, a student discipline problem or bad parents. Municipalities must step up the pace with respect to shared services, and the smaller units of local government should consider merging with their neighbors. Its time for some bold action....from all concerned!

MLB

The psychology of economics is something which I may never understand….Have you noticed that as the price of gas rises, more and more people are soured on the state of the economy?

Nationwide and here in upstate New York, unemployment rates, interest rates, and inflation rates are as nothing when compared to the Carter years…and yet, even before the “official” definition of a recession has happened (two successive quarters of negative growth) the pundits and politicians have already pronounced the economy as poor and getting worse.

The stimulus package checks are almost uniformly praised, despite the cold fact that they will have little or no impact) but another round of heavy spending increases in Washington and Albany are taking place (clearly an economic negative) with little or no resistance at all….This at a time when EVERYONE should be screaming for fiscal restraint.

Someone, please, explain that to me!!

If Governor Paterson is serious about curtailing NYS spending, and he appears to be, it could only be good news for the New York state economy in general and the North Country economy in particular.

There is rarely a week that goes by in my office, when in the course of discussing the sale or lease of industrial or commercial property, I must explain to a shocked Canadian why our property taxes are as high as they are.

Add to that the NYS Corporate income tax rate, our sales tax levy, and the cost of product liability and workmen’s compensation insurance, and you quickly understand why competing states are now beating us in the site selection game.  This is especially frustrating given the fact that our proximity to Canada SHOULD put us first in line whenever a foreign company comes a calling.

New York State AND Clinton County must guard against the ever present possibility that we will one day tax ourselves, out of the market for new business and industry.

Only the more “senior” of those who observe the economic development landscape here in the North Country will have noticed the changes in the North Country’s Economic Development team…Years ago, there was the Clinton County Area Development Corporation and that was it,.

In the years that followed, a number of sub-county groups were begun, including the Champlain Local Development Corporation, the Friends of Keeseville, and the Plattsburgh Downtown merchants Group.

Some of the smaller groups have since been subsumed by the Plattsburgh & North Country Chamber of Commerce. The Champlain Industrial Development Agency was absorbed by the Clinton County IDA.

Perhaps most remarkable, however, is the role played by the Chamber of Commerce.

For years it was the group that hosted the October Fest, and paid a bit more than lip service to the idea of tourism. Its impact was minimal.

During the past ten years, however, it has grown exponentially. Its mission is clearly the economic development of the entire region, as evidenced by the Chamber’s successes with the purchase of Wyeth, the new Port of Excellence in Champlain, & its continuing efforts to make better the situation with respect to workmen’s compensation, the passport requirement, tourism, Canadian direct investment, and the attention we get from Albany & Washington.

Economic Development has been and always will be a team effort….among and between both public and private sector organizations…but clearly, the Chamber of Commerce in Plattsburgh has changed the economic landscape in a way which few could have foreseen.

The requirement for U.S. citizens and Canadians to have a passport with them when they enter the US is a whole lot of effort in the wrong direction and will have a negative impact on trade and commerce in our area.

Ironically, this so called security measure addresses the two claims to citizenship (U.S. & Canadian) that even new inspectors on the US –Canadian border are best equipped to deal with. A false claim to US or Canadian citizenship is discernible with or without a passport.

Ironically, the U.S. State Department now allows nationals from 27 different countries, including such places as Brunei, Slovenia, and San Marino, to enter the US without first obtaining clearance from the US  Embassy in their native country.

So picture this…the Slovenian national, boards a plane to Montreal and drives to Champlain where he presents his passport and claims Slovenian citizenship.  But in fact, it’s a fraudulently procured passport or the photo has been substituted.  How many of our Homeland Security officers are expert in detecting fraudulent documents from Slovenia??

The time, energy, and money spent on the Western Hemisphere Travel initiative (the passport program) would be better spent, training our officers to detect fraudulent claims to citizenship from these 27 countries.

The bad guys have already figured that out….in the “black market”, US passports are now worth less than ever, because fraudulently procured passports from any one of these 27 countries are easier to obtain, easier to manipulate, and less likely to be detected by border crossing guards.

Meanwhile, you & I will be harassed the next time we go to Lacolle for Chinese food, and forget our passport at home.

Solution:  Anyone with a driver’s license which has an address within commuting distance from the border needs NO passport!

The decision by Nova Bus to purchase land and then build here is significant, but for more reasons than the obvious.

It proves once more that our proximity to Montreal and the thousands of Canadian manufacturers located there, continues to be a prime factor in our search for new jobs and industry here in the North Coutry; this depsite the fact that NYS's tax and regulatory burden is makng our "sales pitch" to such companies, more and more difficult.

In addition local propety taxes and product liability insurance are giving our Canadian prospects, "sticker shock"....As a result we may not be as successful when the next "Nova Bus" comes along....."A warning to the wise....."