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Working on Ideas

Local officials, business owners have suggestions for state group

July 26, 2009
By RODNEY MINOR, The Leader-Herald

Local businesses and officials suggest the New York Small Business Task Force - and state officials in general - look for ways to reduce taxes and fees, unfunded mandates and cumbersome regulations to assist the growth of smaller enterprises in the state.

Wally Hart, the president of the Fulton County Regional Chamber of Commerce & Industry, said one thing that would help small businesses is easier access to services and programs.

He noted that there are already state grants available to help small businesses in a number of areas, such as workforce development.

Article Photos

The Leader-Herald/Bill Trojan

Wayne Bovee, the president of Seely Conover’s Office Centre of Amsterdam, moves a desk chair in the showroom Wednesday.

However, he said, many small businesses are not aware of them.

"And if they do [know about the available grants], they do not always have the time to explore them further," Hart said.

One possible solution might be to make an organization such as a chamber of commerce or a trade association a sort of "clearinghouse," he said. Organizations with direct access to their small-business members might be able to get the relevant information to them more efficiently.

Hart, one of about 45 people on the task force, was selected by Gov. David Paterson to participate on it. He is representing the Fulton County chamber and the statewide Chamber Alliance of New York State, the latter of which he chairs.

The task force was created to brainstorm solutions and recommendations to promote the growth of small businesses in the state. The group will meet monthly in New York City, Hart said, and will deliver a final report to Paterson in November.

Hart said the task force has four subcommittees: Access to Capital, Technical Assistance, Government Regulations, and, the one he is on, Workforce Development. While he has an interest in all four topics, he was particularly interested in Workforce Development and Government Regulations.

He noted that sometimes, there are areas where the state could be a little more clear about what it is doing and what it wants.

"I deal with many small-business members who call and say they are having trouble understanding specific regulations," he said.

Wayne Bovee would have settled for just being notified of a change to a state fee.

Every year, in order to do business in the state, corporations have to pay a fee. Bovee, president of Seely Conover's Office Centre in Amsterdam, said the fee had been about $100 for his business.

However, Bovee was surprised to find out earlier this year that rather than go with its old system, the state determined the amount owed by a business's gross sales.

For the small office supply business, that meant a ten-fold increase in the tax amount to $1,000.

"At $1,000, we have to do a lot of sales to make up for that," Bovee said.

Going by gross sales is unfair, he said. Businesses such as car dealerships tend to have very high gross sales because of their merchandise, irregardless of their profit. Meanwhile, a law firm might have low gross sales but a high profit.

He said a better, fairer way to go about assessing the fee would be looking at the profit a corporation reports.

Besides the money, adding to the problem is there was no warning. No letter from the state indicating a procedure had been changed was sent to him, he said.

Deborah Auspelmyer, the president of the Montgomery County Chamber of Commerce, said she was surprised when Bovee told her about the change. To her, it was also part of a larger issue the state needs to address - reducing taxes and fees.

Auspelmyer also said small businesses would benefit a great deal if the cost of health insurance could be reduced. Some are finding it difficult to deal with the annual increases in costs they have to pay.

"Health insurance is huge," she said.

Michael Rooney, 5th Ward supervisor for Gloversville and a certified public accountant, said some of the businesses he does work for are having a tough time paying their unemployment taxes.

In general, unfunded mandates are always an issue, he said. In particular, local Medicaid costs also are helping drive up property taxes in the area, he said, discouraging businesses from staying in or moving to the area.

According to figures released by the Tax Foundation, Fulton County is locked in a five-way tie for 14th place in the country for homeowners paying the highest property taxes as a percentage of their entire home value from 2005 to 2007. Montgomery County is tied with three other counties in the state for second place.

Rooney said most states pay about 50 percent of their Medicaid costs, while the federal government picks up the other half. In New York, the state picks up about 25 percent of the cost, and makes the local governments pick up the other 25 percent.

Rooney said a customer of his is only expanding its business outside of the state due to the high costs of doing business here.

"The state has to stop creating new taxes and levying taxes on small businesses," he said.

Lee Schopmeier, the owner of Lee Schopmeier Restorations in Gloversville, said reducing or eliminating many "hidden fees" businesses deal with would help.

In his business, there are fees involved in licensing and registering vehicles that many consumers do not know about, he said. They ultimately have to get passed along to the customer.

Having been in business for about 30 years, Schopmeier said he has watched the number of regulations and the amount of fees and taxes go up over time.

"If there is a fee [the state] can raise, they will raise it," he said.

Both Hart and Auspelmyer said an area of regulation that can be particularly bothersome for small businesses is getting a license to sell alcohol. Both said it always seems to take many months for new business to get approval from the New York State Liquor Authority, not to mention the additional time it can take if there is a problem with an application.

Bill Crowley, a spokesman for the state Liquor Authority, said a restaurant that wants to sell alcohol, for example, has to fill out a 26-page application. A variety of information - by law - has to be included and needs to be checked, including fingerprints, and information about the proposed establishment. Background checks also must be conducted.

For a restaurant in Gloversville to get a license to sell alcohol, he said as an example, it would probably take about four months for an application to be approved after it was submitted.

However, the time it takes can vary based on where the business is located and any specific issues with the information in the application.

Crowley said getting applicants their license does take longer than the agency would like. He noted it supports a proposal given to the state Senate and Assembly this year that would allow any establishment that wants to sell alcohol a temporary license to sell alcohol until its full application is approved.

Crowley said the agency receives calls from applicants who are concerned about the money they may be losing by not being able to sell alcohol until the application is fully approved.

"It would alleviate a lot of problems," he said of the proposal.

According to a news release, the task force will be charged with identifying ways to improve small-business development in the state, including the following:

Reducing regulatory burdens that increase costs.

Reviewing the effectiveness of the state's programs and services targeted, and available, to small businesses.

Developing a strategic plan to promote the growth of small businesses that includes recommendations for new or redesigned services, along with recommendations for legislative and administrative changes.

Hart said the group was convened with the idea members would do more than merely complain about problems in the state. They are tasked with giving suggestions to solve those problems, he said.

Of course, for members of the task force, that may be easier said than done.

"Unfortunately, part of the challenge is that there are no quick solutions to these problems," Auspelmyer said.



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