Economic Development A Good Bet?
This is the first in a three-part series that explores taxpayers’ investment in economic development in Saratoga County.
SARATOGA COUNTY – When political strategist James Carville coined the phrase, “the economy, stupid” back in the early 90’s in answer to a question exploring top voter concerns, he could not have known it would become a standard part of the American vernacular.
Debates may rage throughout this Presidential election year on foreign policy, health care, immigration, and a variety of other important issues, but it can be arguably said that none resonate more with the average voter than how that voter will be hit in the pocketbook. That is just as true in Saratoga County as it is across the nation. People want jobs, good-paying salaries, and affordable goods and services. The glimmer of hope seen in the slow rate of the national upturn of job creation and drop in unemployment may have restored some consumer confidence, (as seen in the record sales experienced by the automobile industry in December) but a December Gallup poll showed 57 percent of Americans think the economy is “getting worse.”
Placing the Bet
The Saratoga County Board of Supervisors (the Board) understand, in no uncertain terms, that it is “the economy, stupid,” and have been making preparations to assure the county economy grows in a sustainable way in 2016 and into the future. In late spring of 2014, the Board made a decision to sever its three-decade relationship with the Saratoga Economic Development Corporation (SEDC) and begin a new economic development agency from scratch.
For county taxpayers, this resulted in a substantial increase in allocation of their tax dollars for economic development. SEDC was paid $200,000 in 2014, but in 2015 the Board allocated $750,000 to the newly created Saratoga County Prosperity Partnership (the Partnership). That’s more than triple the prior year allocation. The Partnership did not utilize all those funds and returned the unused portion back to the County, as statute required.
State legislation that was passed last year at the request of the County authorized one-half of one percent of the County’s hotel occupancy tax to go to the Partnership in perpetuity, beginning this year. That, combined with other County revenue, will continue the $750,000 a year for the Partnership.
According to Saratoga Springs Supervisor Peter Martin, there were no tax or fee increases or existing program cuts to cover the additional half-million-dollar expense. The Board used a combination of unallocated surplus funds and increased sales tax revenues to cover the cost in 2015. The local economy was better in 2015, and consumers made more purchases, so the money was there. The Board decided it would be a good bet to reinvest that money into the economy, and additionally decided that it would increase their odds on a return by directing the money to a new economic development agency rather than give it to the existing one.
Arthur “Mo” Wright, who is currently serving his first year as chairman of the Saratoga County Board of Supervisors after nine years of representing Hadley as Town Supervisor, reiterated what other supervisors have been saying, that they didn’t feel they were seeing much in the way of results from SEDC.
“Once GlobalFoundries came in, we haven’t seen much else,” said Wright. “Marty [Vanag]’s presentation to the Saratoga Springs City Council [Tuesday, January 5] was the same as what he gave to the Supervisors, and the number one goal of the county is to work with him and support the Partnership. You can’t lose sight of the fact that there’s more to this county than just GlobalFoundries. Obviously they are a new entity and it takes a while to get staffed and up to speed, but it sounds like he’s hitting the ground running.”
Dennis Brobston, Saratoga Economic Development Corporation president, was unavailable for comment, but SEDC has recently been working to bring Dollar General to the county with a $92 million dollar warehouse project that would bring over 500 new jobs to the area. On Monday, January 11, the Saratoga County Industrial Development Agency (IDA) approved a package of tax incentives valued at more than $11 million to sweeten the deal against the competition. Dollar General is also weighing locations in some New England states. If that deal and others like it come through, taxpayers might wonder whether that additional half a million dollars for the Partnership might have been better spent.
The Ace in the Hole?
Marty Vanags was hired as president of the new Saratoga County Prosperity Partnership back in May of last year. He moved here from Indiana, bringing the heavy-hitting resume of an economic development veteran. According to Saratoga Springs Supervisor Matthew Veitch, his salary is in the neighborhood of $125,000 a year.
“He’s worth every penny,” said Veitch. “You have to understand, we didn’t create SEDC. They are an independent entity. It’s not like we can dissolve it if we feel it’s not meeting its responsibilities. The Partnership was created by statute, and even though it is formed as a nonprofit corporation and has its own board, there’s a degree of transparency there that we just weren’t getting from SEDC. This is taxpayer money, and we have to know where it is going and how it is being used. The straw that broke the camel’s back with SEDC followed a request of the Supervisors to sit on the board – given the financial contribution. When SEDC refused and frankly told us that there was some legal problem that meant they couldn’t do it, the board decided we’d go our own way to meet our needs.”
Rodney Sutton, newly elected chair of the Saratoga County IDA, said Vanags has already brought some business to the county, but is pragmatic about the fact that there are now two agencies with the same goal in the area.
“All due respect to partnership,” said Sutton, “they are the new kid on the block and we are more than willing to cooperate with the Partnership so we can work together to continue the growth of the county. They have to go out and generate activities that they think SEDC has not. That’s the capitalistic enterprise that we live in. If they can bring something to the table, that’s great. I do think over the years SEDC has done its job admirably, but things change. Our economic message could change, economic winds could be changing as we speak.”
Vanags recently announced a four-point strategy for economic development in the County. Veitch said, “In the time we’ve had Marty around, for him to come out with a strategic plan and move forward with it is huge for me. I don’t know that we’ve done anything like that in the past. Now the public knows this is our plan and it’s out there, open to people for them to add suggestions, concerns and criticisms. Now, that’s accountability. The outlook for 2016 and beyond, I think is good.”
Sutton agrees. “My firm belief is that good strong businesses will still come to Saratoga County and find it an attractive place to stay,” said Sutton. “We’ve got good educational institutions, good housing, good transportation, a stable tax base – there are a variety of reasons for companies to move here. Through the recession, we still held our own through that whole period of time. Now we’re seeing an uptick in manufacturing and other companies that might move into the area.”
In our next edition, we’ll take a closer look at the strategy and its potential impact to the local economy. The Saratoga County Prosperity Partnership is located at 2911 Route 9 in Malta. They can be reached at 518-871-1887 or visit SaratogaPartnership.org.