Tax Free Downtown
In 2005, the WNY Coalition for Progress advocated for the following:
To spur development and shopping in the downtown corridor, the Erie County Legislature, in conjunction with any necessary approval of the state legislature, might consider waiving a portion of the county sales tax generated for any sales made in a specially designated downtown shopping district.
It would work as a sort of reverse Empire Zone; instead of a business getting perk for siting itself in a certain location, the consumer would get the direct benefit. With the probable development of a mega casino in the Cobblestone District, there will be direct, tax-free retail competition near downtown.
Sam Hoyt is proposing that very thing for central business districts throughout upstate.
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bp…
what’s your take? I think its interesting…
I remember thinking that this would be a great idea. A vibrant downtown would be a good thing for the WNY psyche and, hopefully, the economy (hard to entice businesses to relocate to WNY with a boarded up downtown and bland anywhere America suburban office parks). It would also be helpful if the program could contain incentives for maintenance/reuse of existing suburban commercial corridors (i.e. Walden Ave, Sheridan Dr). Expansion up and down Nia. Falls Blvd and Transit could be redirected to existing commercial spaces in the suburbs.
I was the one who added that recommendation to the Coalition’s report.
Is it fair? Nope. Neither is the Duty Free shop on the other side of the Peace Bridge. Neither is the Indian exclave that’s being carved out of the Cobblestone District.
I think a tax-free district acts as an incentive to bring retail downtown, and customers with it. Nothing would stop retailers at the Galleria or Boulevard Malls to offer 8.75% discounts on items, much as Canadian retailers do with their “we’ll pay your GST” discounts.
I understand that other neighborhoods in Buffalo would feel left out of the fun, but I think that bringing more people into Buffalo will increase traffic up and down Elmwood and Hertel, as well.
In a perfect world, of course, we’d have no need for county sales tax and we’d just pay a competitive 4% state sales tax. Until that day comes, a little reverse Empire Zone is a good experiment to undertake.
thanks bp…
I agree with what you’re saying about elmwood and hertel…
people don’t drive to Elmwood to get a great deal on shoes or a purse…they drive to Elmwood because its fun and unique…
Why is it that the Democrats can recognize that lower taxes will spur economic growth downtown by makking commerce more attractive there, but absolutely refuse to see the same thing state-wide and national levels?
The city will make money with parking fines, so only the county would actually lose money with the tax free zone.
I think this is a great idea. It’s about time the playing field gets evened a bit. If there is one thing Americans love more than ample parking, it’s monetary incentives.
Why did it take so long for this to happen?
Excellent idea, long overdue.
“Central Business Districts”
Buffalo has two…downtown and Broadway-Fillmore…both are the only places in Buffalo to have such a governmental designation…if the legislation is written specifically for “Central Business Districts”, BF would be in the mix…
My guess is that the 8.75% sales tax savings won’t be suffuicient incentive to create enough retail customer flow in areas such as Main St. downtown where Sam’s press conference was held or in Broadway-Fillmore as Indabuff suggests.
Realistically a big jump in people changing their shopping choices to justify businesses deciding to locate new stores in those areas.
To make this work, how about adjusting the proposal to make it a “reverse sales tax” ? Sort of like the Earned Income Tax Credit but for retail. In addtion to no sales tax, the state would subsidize purchase transactions downtown and in B/F, etc. to result in say a 10 or 20 percent reduction of prices.
Start with 10 (which combined with lack of sales tax makes things almost 19% cheaper than anywhere else). That might start drawing enough customers. But if even that doesn’t work, the legislation would automatically hike it to 15%, 20, etc. Eventually it would acheive the end goal that all fair minded progessive thinking people agree is good: having the government adjust prices to acheive desired balance in where retail stores are located.
If that ever becomes too expensive for the state to pay for, the same principle could be applied by having a modest sales surtax in areas that are having disproportionate success in retail, such as Galleria or Williamsville.
I’m surprised Eliot or Hillary never thought to propose this concept. It seems so logical.
“f that ever becomes too expensive for the state to pay for, the same principle could be applied by having a modest sales surtax in areas that are having disproportionate success in retail, such as Galleria or Williamsville.”
Gahhhh! Anybody got any duct tape? My head just exploded.
Why don’t we cut taxes to the point that we as a state are competitive against other states, or even other countries? Then people will want to have businesses here, there will be jobs. People will come here from Pennsylvania, Ohio, NJ, Ontario, Vermont, NH etc. to buy stuff.
It really is maddening to see people so close to the right answer but not quite getting it.
LC, good points.
Hoyt should include a decrease in government spending to correspond with the decrease in sales tax collected. Also, a schedule to eventually include every square foot of NYS. That would provide for the gradual and total elimination of all sales taxes with a corresponding decrease in spending.
Of course, that idea would never fly because the government never gives up control over our money in such a wholesale manner.
Central Beer Districts…no tax on beer ever…
As one of the commentors here who remember when Main St. Actually had LIFE, I’d be willing to piss on a spark plug and grab the wire to see Main St be revived. The stories my parents and aunts and uncles can tell about how Main St was the place to be in the 40’s. Now you can fire howitzers down Main st and not even kill a wino.
I’m not really in favor of governmental intrusion into free enterprise, but why would any business, chain or sole entrepreneur want to relocate to Main St. at this point??
You HAVE to give them something.
Perhaps the city fathers should look at what happened in Norfolk VA since 1977–not just Waterside, Nauticus and the revival of the waterfront, but also this:
When I moved to Norfolk in 1989, downtown OFF the river was a maze of surface parking lots. Sound and look familiar to anyone up there?
Mc Arthur Mall was built, taking the name from the museum and burial place of the General across the street. 3 tier mall, big parking garage, all levels of stores, anchored by Nordstroms and Macy’s. As the mall opened, the city opened up the surface parking lots for sale, created a “Small Business Empire Zone” if you will. If you had not been there in 10 years you’d never recognize the place.
People WANTED to go back downtown. Norfolk bustled in the 40’s and 50’s too, and all it took was some places for people to go, and they came back. ]
It could work on OUR Main St. too, if the pols could get their heads out of their asses long enough to see it.
Mike in WNY should have begun his comment with.
And now, a comment from the libertarians at FNY.
Of course, thinking that WNY Pols would decrease spending for ANY reason, much less offsetting a sales tax decrease makes him sound like a neo conservative.
We’ll pause now while Mike in WNY scrubs his ass with brillo.
After this proposal is thouroughly discussed , would someone tell me why the state is chasing the Indian reservations for tobacco and gasoline taxes? Is it rascism, hypocrisy, or stupidity that allows these two ideas to exist in the same government?
InDaBuff- Buffalo Beer Party? We can all dress up like Hoyt, Bruno, Silver and the Spitz, drink lots of beer and pee in the harbor to protest the taxes!!
Hank- I know you and Mike have had your differences, but why take a poke at him over an issue about which you both agree?
All three of us (among others) have repeatedly called for lower taxes and fewer government incursions into marketplace control.
Scotty, but if tax cuts are across the board then new jobs and new businesses might not be geographically distributed within NY and within Erie County in ways our government leaders and progressive citizen groups feel is appopriate.
For example, downtown and Broadway-Fillmore might still have very little retail comapred to Amherst or North Buffalo.
Your idea may make sense in pure economic terms, but you have to admit it doesn’t provide new powers to the government to help it influence exactly which neighborhoods various retail commerce will occur.
That’s true, Starbuck. My contention is that Albany, the Rath building and City hall have been uniform, abject failures. Don’t let them decide where jobs should be created, let the market do that. Don’t let them decide which retail areas get help, and which get handicapped, let the market do that.
Maybe we won’t get BF and Main street back to their former glory or maybe we will, but we will get growth somewhere, and not just in retail. People that actually create wealth with companies that make products (tangible and/or intellectual etc) will want to come here because it’s cheap. People will want to come here to shop because it’s cheap. If the taxes, and hence costs, are low enough, I can put a store downtown and piles of Canadians will go there from the PB because it’s close.
If we lower our taxes across the board, the folks in BF might have a chance to get a decent paying job. That’s the way to turn that area around-give them the chance to earn enough money to take care of themselves and their homes.
Decades of “Progressive” social entitlement programs have left the BF area devasted. Is that the cause of the devastation? Possibly, but for certain it hasn’t helped.
Across-the-board tax cuts? But Scotty – from the Peace Bridge, Canadians can easily reach the Amhersts and Gallerias. Those areas have already won life’s lottery. Do they really need to get even richer by tax cuts at the expense of downtown and our working family neighborhoods?
Don’t we need our goverment to tip the scale in favor of hard working under-retailed areas such as downtown by shaving say 8.75% off of purchases as Hoyt suggests? Or if that doesn’t work, by creating a higher pricing differential via the anti-poverty reverse sales tax idea I had? Shouldn’t the big purpose of tax policy be to ensure downtown gets more retail even if the marketplace doesn’t realize how important that is?
Btw, this neoprogressive stuff is NOT easy at all. Dunno how the politicians do it. If those ideas above aren’t enough to straighten out your thinking then somebody else will need to finish convincing you. I need training. If Drudge hadn’t linked the article about liberal chicks at rallies being so easy, I doubt I’d even be trying to learn how to talk this way.
I love this idea.. I will love it even more if it includes the Fillmore district..But will we get the greedy politicians to agree to it?
I think this idea could work in Utica.
We recently opened a new state highway in one of the suburbs, and a whole slew of new retail outlets opened. All Uticans with cars now shop in the suburbs . . . but their own downtown goes underutilized and is a drag on the economy.
In a way, we the taxpayers have encouraged the suburban growth with the new roads . . . It is only fitting that we now do something to encourage growth downtown.
“…I doubt I’d even be trying to learn how to talk this way.”
Well, apparently you’re progressing well in your studies. I gotta get my iron-O-meter calibrated.
Haha sorry about that, Scotty – hope you found some duct tape for your exploded head. I really thought a reverse sales tax retail subsidy downtown paid for by Galleria surtaxing would sound… uhhh… well, at least over-the-top enough. Now won’t I feel guilty if some day they ever actually do that!
Sam Hoyt listens.
BTW: it was my idea – I proposed it back in the eighties (smile)
What’s so special about downtown Buffalo and Broadway-Fillmore? All of the city should be a tax free sales zone for the summer months. That way, merchants won’t have to look cross eyed at shorts- wearing potential customers walking by their stores.
It helps the merchants, the mother who needs to save up to buy school clothes and the city will be protrayed as a benefactor. A win win situation for all- except maybe for Sam Hoyt!