Archive: Business & Technology

The Chamber of Commerce Economic Summit offered a few rays of light in the darkness of the current economic downturn.  But the short term prospects seemed bleak, despite the unique economy in Tompkins County.  The summit attracted legislators and business people anxious to know what the prospects are for business in Tompkins County.  Speakers included New York State Business Council of New York State Director of Federal Affairs Maggie Moree, Professor and Chair of the Department of Economics at Ithaca College Elia Kacapyr, and President of Tompkins County Area Development Michael Stamm.

"The challenge for all of us is that the economy in Tompkins County doesn't operate separate and apart from the neighboring counties, separate and apart from the State, the nation, and the world," Moree warned.


Moree said that spending in New York State is too high and not sustainable, and that we must go beyond simply solving the state's current cash flow problems.  She noted that spending in New York is the second highest in the nation, a full 47% above the national average.  Per capita Medicare spending is 128% above the national average, and New York has the worst tax climate in the country.

"From the Business Council's review we do not think this is sustainable," she said.  "Economists and the Governor and his staff has said that even without this economic downturn New York is in trouble."

She said that releasing the Governor's budget early was an opportunity for transformative change in the way the State does business, but it was a missed opportunity.  She said that increased taxes are obvious, but there isn't an accompanying reduction in spending.

"We were really disappointed by a number of provisions in the Governor's budget, in particular the provision that exponentially increases some of the taxes on health care and health insurance in the State of New York," she said.  "For every person who has the benefit of having an employer-sponsored health insurance plan 11% of that premium dollar goes to taxes the State of New York has put on health insurance."

She listed more taxes including increases on motor vehicles and fuel, an 'obesity tax' on sugared drinks, more health care tax increases, cost shifts from the State to local governments, and unrealistic state employee 'givebacks.'

Kacapyr has produced the The Index of Economic Activity in Tompkins County since 1985.  It tracks employment, retail sales, air traffic, building permits, home sales, and help wanted advertisements.  He noted a downward trend in 2008.


"Tompkins County is not recession-proof," he warned.  "Many people think we are because of the strength of our institutions of higher learning, and because of the hospital.  We have a unique economy, but we are definitely not recession-proof.  The 1991 recession started earlier in Tompkins County and it was more severe."

He noted that in 2002 a national recession was not really reflected here, and that at this point it is hard to tell which of those will be reflected in 2009.  "My thinking is that it's probably going to be in-between.  We are part of the state and national economy.  Although we have a unique economic structure here in Tompkins County we feel those tremors."

His current report says that we should look for tough times.  "My guess is that Tompkins County will lose 100 jobs in 2009 bringing total employment to 63,600," he says. "Retail sales will be very soft. I expect them to increase by less than 1 percent after increasing 2.2 percent in 2008. Look for home sales to hold steady. About 900 homes were sold in 2008 and I expect we could approach 1,000 homes sold in 2009. The unemployment rate will approach 4 percent for the year.

"All of these variables, plus building permits, air traffic, and help wanted advertising are included in the Index of Economic Activity in Tompkins County. This index measures the standard of living in Tompkins County. The index decreased 0.2 percent in 2008 and I look for it to decline by a full percentage point in 2009."

Stamm also stressed that the Tompkins County economy is not isolated.  "Durable goods manufacturing in Tompkins County is really suffering," he said.  "Before the recession it was doing really well, which is uncharacteristic of Upstate New York.  Before the recession Borg Warner grew from something like 800 employee to almost 1,700 employees in our region, most of them at our facility here in Tompkins County."


He said that he hopes Borg Warner will weather the economic downturn because of smart choices the company has made in the past.  "While they're really suffering right now because of the automobile industry, we're hoping that their commitment to technology and innovation will carry them though the recession and put them in a good position after the recession," he said.  "That's not the case with all of our durable goods manufacturers here, some of whom are housed in 100 year old facilities and are having a tough time adjusting to new technologies."

Stamm said that technology-related companies should be able to bounce back.  he also said that the many light manufacturing companies in the county that supply parts to other companies should also be able to bounce back.

He said high tech companies are continuing to grow despite the downturn.  "A Rochester company laid off 24 engineers," he said.  "An Ithaca company hired all of them.  It just goes to show that we do have high tech companies here that are selling products across the globe.  We're fortunate to have those and we do everything we can to keep them here and help them grow."

He noted that we haven't been hit significantly by the housing crisis due to the fact that local government is hard to deal with, and noted that local government's opposition to large-scale retail development has had the unintended consequence that there are fewer stores, and therefore less of a bust for those that are here.  He said that it has also has held up the construction of infrastructure that could have created a boom in development.  "There has been a pent up demand for housing, but the supply hasn't been there to meet it," he said.  "We did have that big boom, so we didn't have that big bust."

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