Biz council faults state on keeping factories in NY

New York's factories are receiving fewer improvements than those in other states because of the high cost of doing business here, according to a recent report.

The research division of the Business Council of New York State found that companies are spending money on new buildings and machinery in other states, but not in New York, because of its taxes, aggressive enforcement of environmental regulations and barriers to securing capital.

New York received $3.8 billion in manufacturing investment in 2009, the most recent available data. That performance paled in comparison with California which got $14.3 billion; Texas, $12.9 billion; Illinois, $7.2 billion; Ohio, $5.9 billion, and Pennsylvania, $5.3 billion.

"Companies in New York are not making commitments to new plants and equipment, and without upgrades and expansions our manufacturing sector will continue to contract at a rate higher than the rest of the country," said the council's Public Policy Institute.

Factories statewide employed more than 1.7 million people in 1970; today that number is 457,800, or 5.4 percent of all nonfarm jobs. Yet, despite their dwindling numbers, manufacturers continue to support many jobs throughout the private sector -- a total of 1.2 million.

On Long Island, giant airplane makers such as Fairchild Republic Co. have been replaced by small producers of everything from vitamins and bread to hydraulics and software.

About 74,218 people worked at local plants in 2009. Their pay averaged $57,766 per year, or nearly $7,000 above the typical wages of all private-sector jobs in Nassau and Suffolk.

The positive wage difference, combined with the spinoff jobs created in other types of business by manufacturers, has led the council and others to call for action by state leaders.

"We need to do more to attract capital investment in this sector so we can compete with other states," said Heather Briccetti, the council's acting chief executive. "The first step . . . is lifting burdensome taxes and regulations that hinder the industry."

She urged state lawmakers to adopt a cap on yearly increases in local property taxes, which Tuesday appeared closer at hand after the Assembly's Democratic majority unveiled a bill similar to one passed by the State Senate earlier this year.

Briccetti also called for reductions in franchise and corporate income taxes and the repeal of new limits on the use of already-earned business tax credits.

The Long Island Association business group backs this agenda. "Manufacturing is still a very important part of our local economy," said LIA president Kevin Law. "We need to be training the future workforce . . . Manufacturing jobs are going to be very technologically sophisticated."

Some of those educational programs already exist at Suffolk County Community College. In the past six years 480 workers have received training there for various factory positions, according to John Lombardo, the college's workforce and economic development vice president.

He said a dearth of skilled employees, not taxes, is the key complaint of plant managers that he works with. "Manufacturing is definitely coming back on Long Island, but companies need more trained workers," he said. "I also disagree with the [institute's] report . . . the state does an incredible job of keeping manufacturers here with various incentives."