For the second time in two years, Sullivan County officials sat down at the table to play for high stakes with the big boys, and folded their handand ourson a bluff.
The first time was early in 2005, when Governor Pataki told Sullivan County Legislators that the county would have to choose between five casinos and none. They obligingly approved five, falling hook, line and sinker for Patakis (bogus) claim that the Bureau of Indian Affairs wouldnt approve any casinos unless all pending land claims in the state were settled.
This years fiasco is the Sullivan County Industrial Development Agencys (IDAs) decision to grant tax relief to the Millennium Pipeline Company, which plans to install a new, larger natural gas pipeline along the existing right-of-way for the Columbia Gas line. The payment in lieu of taxes plan will reduce taxes paid by the company by 75 percent for the first five years, 50 percent for the second five years and 25 percent for the third five years, before the company starts paying taxes in full. (See article on page one).
The company, naturally, told the counties with which it was negotiating that it would take its marbles and go home if it didnt get tax relief. That doesnt make it true. With or without tax relief, the route through our county would be the cheapest one because it follows an existing right-of-way. Plus, potential revenue would more than justify the full tax expenditure; the uptrend in energy prices of all kinds, as worldwide demand surges and supplies dwindles, is surely one of the most prominent economic facts of our time. Finally, those who fear that the company is too impoverished to afford all those taxes should take a look at its ownership. Two out of three of the holding companies, NiSource Inc. and KeySpan Corporation, are in the Fortune 500. The third, DTE Energy, posted $9 billion in revenue in 2005. In fact, revenue for the three companies combined was about $24 billion in 2005.
Did the members of the IDA research energy industry trends? Did they look at the companies financial statements? The sum foregone by the county over the entire period due to the IDA decision is estimated to be about $14 million. The three CEOs of the companies that own Millennium Pipeline, combined, get that much in executive compensation in a single year. The sums of money we are talking about are pocket change to them, untold treasure to us. Yet our representatives decided that the residents of a county with below-average incomes must dole out welfare to these energy moguls for fear they wont play with us. Tioga County, which stuck to its guns, will be paid in full while our shortfall will just about cover a years worth of CEO compensation for the fat cats.
The incident is especially troubling because, increasingly, our county leaders are going to have to learn to play with the big boys. We are being approached from all sides by people with a lot of money, a lot of sophistication, a lot of influence with the federal government and a lot of very high-priced lawyers—NYRI, casino developers, residential developers and a bevy of other predators looking for virgin territory to exploit. We dont have money but we do—or ought to—have our wits and our courage. We are going to need every ounce of them, and we are going to need, at the very least, to learn to call a bluff when we see one.
So far, we have seen little evidence of these qualities in our leaders. If the county legislature and its appointees, like the IDA, cant show a little more spine in bargaining away our resources, its high time we replace them with people who can.
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Happy U Near
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The Industrial Development Agency (IDA) in Sullivan County has recently voted unanimously to grant tax breaks to the Millennium Pipeline Project. This pipeline passes through several towns here in western Sullivan County. The project is to replace the existing 12 pipeline with a larger 30 pipe.
Cochecton stands to be affected perhaps the most of any Sullivan town. Depending on what figures are used, we will be affected by approximately $500,000 in lost revenues over the next 15 years. Our total annual budget for the town is about $1 million.