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Viewpoint: Super Steel took millions, then abandoned county

Viewpoint: Super Steel took millions, then abandoned county

That Super Steel is leaving is not a surprise, writes Christopher Chichester. Our Empire State’s des
Viewpoint: Super Steel took millions, then abandoned county
Shawn Banner/For The Sunday Gazette

A super sham has now been completed in Schenectady County.

Super Steel, the Glenville-based plant that manufactures railroad cars, announced it is closing. One hundred seventy-five New Yorkers will lose their jobs come April.

This is not a surprise. Our Empire State’s destructive corporate welfare culture has achieved another milestone. Of failure.

In 1995, Super Steel was boldly predicted to be a Capital Region success story. I know. Because I served on the designated Pravda-like predictions team as a spokesman for Governor George Pataki during his first term.

We hailed Super Steel relentlessly. They were The Next Big Thing. From the way we hyped it, you’d think Super Steel was destined to be a new General Electric in the Electric City. Wrong. We engaged in a woefully pathetic exercise in how to speak nonsense to the public.

Revealing study

Super Steel is a super sham since it pocketed millions of dollars from New York taxpayers, and left. In a devastating study on corporate welfare, former Sen. Franz Leichter reported:

“ . . . the State agreed to provide $4.69 million in subsidies and other financial assistance to GM Super Steel in 1996. This includes up to $2.04 million in direct loans from the State’s Job Development Authority [JDA]; a $400,000 interest subsidy grant from the Empire State Development Corporation [ESDC]; $750,000 in training grants; and rail improvements made by the State’s Department of Transportation valued at $1.4 million.

“GM Super Steel will also receive $1.8 million in property tax exemptions; $1.8 million in tax exempt financing; $1.7 million in electricity savings; $1.1 million in wage tax credits; a $900,000 investment tax credit on the facility; $810,000 in employee tax credits; and $245,000 in sales tax exemptions. With over $1 million more in local assistance, the total package of incentives and benefits to Super Steel amounts to $13 million.” $13 million.

All that cash, and Super Steel is deserting Glenville anyway. It makes you want to scream at the injustice of those lost 175 jobs, and the impact it will have on the employees’ families.

The ESDC, JDA and other agencies that dispense these government subsidies are mere press release factories. They pretend to understand the econometrics of a region. But they’re staffed by political appointees with little or no knowledge of businesses and markets.

In 1995, there was no railroad car expert at the ESDC or JDA who had market knowledge of Super Steel’s potential ability to compete in Glenville. But bureaucrats who knew how to hand out the money were at the ready.

We have corrosive Soviet-style agencies, and their propeller-hat bureaucrats who send millions of dollars to the Super Steels of New York. And pray they’ll stay. The praying hasn’t worked. They leave. It has failed for easily over a decade now.

Is anyone even paying attention to what’s happening here in our state with these policies?

Our state Legislature should schedule multiple hearings on ESDC and JDA operations. Summon their bureaucrats to the Legislative Office Building in Albany, and grill them on how they reach their decisions.

Our state is so pathetic with economic policy that we’re reduced to bribing businesses such as Super Steel to either remain here or re-locate here. Unlike South Carolina, Nevada or other growing states, the reputation of our business climate doesn’t speak for itself. Our reputation is hostility.

It’s no secret what needs to be done: cut taxes across the board. Corporate taxes and personal income taxes. It’s that simple, and it will not happen given the impending one-party Democratic control of the state Legislature.

This dynamic is lost on Schenectady’s elected officials. They begged for help even after Super Steel’s announcement. Robert Farley helped lead the way.

“We need to do whatever we can as a community to try and get them through this and not have them close their doors,” he said.

Whatever we can. To get them through this.

That means Farley wants another hand-out, another special government giveaway for Super Steel. He doesn’t get it and likely never will.

Why didn’t Farley call for sweeping tax reductions for New York’s businesses? Or reform to our oppressive regulations? Perhaps call attention to how the Department of Environmental Conservation unleashes itself for the sole purpose of harassing business owners?

Because he wants more of the same. He favors the same type of “deal” that drove Super Steel out of Glenville.

End the charade

We can’t continue this charade. The same policies result in the same failures.

Government can’t pick winners and losers in the marketplace. The market always makes the final determination.

This is not the last time a company like Super Steel will receive a handout from New York taxpayers, and promptly head out of state. Many will come calling again, and Governor David A. Paterson, along with our 212 state legislators, will fail to simply tell them: No. Enough.

Christopher Chichester lives in Albany and is a former spokesman for Gov. George E. Pataki, Sen. Olympia J. Snowe and Rep. Lamar S. Smith.

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