Economic
and
Fiscal
Impact
Analysis
of
the
Saratoga
Economic
Development
Corporation
June
2014
Prepared for:
Saratoga Economic Development Corporation
28 Clinton St, Saratoga Springs, NY 12866 518.899.2608 www.camoinassociates.com @camoinassociate
About
Camoin
Associates
Camoin Associates has provided economic development consulting services to
municipalities, economic development agencies, and private enterprises since
1999. We specialize in real estate development feasibility and the economic and
fiscal impact of public and private investments. Through the services offered,
Camoin Associates has had the opportunity to serve EDOs and local and state
governments from Maine to Texas; corporations and organizations that include
Lowes Home Improvement, FedEx, Volvo (Nova Bus) and the New York Islanders;
as well as private developers proposing projects in excess of $600 million. Our
reputation for detailed, place‐specific, and accurate analysis has led to projects in
twenty states and garnered attention from national media outlets including Marketplace (NPR), Forbes magazine, and The Wall Street Journal. Additionally,
our marketing strategies have helped our clients gain both national and local
media coverage for their projects in order to build public support and leverage
additional funding. To learn more about our experience and projects in all of our
service lines, please visit our website at www.camoinassociates.com. You can also
find us on Twitter @camoinassociate and on Facebook.
The
Project
Team
Robert Camoin
President, Project Principal
Rachel Selsky
Senior Economic Development Specialist, Project Manager
Tom Dworetsky
Executive Summary ... 1 Introduction ... 1 Methodology ... 1 Economic Impact ... 2 Fiscal Impact ... 3 Introduction ... 4 History ... 4 Programs ... 4 Methodology ... 5 Data Software ... 6 Impact Analysis ... 6 Selected Businesses ... 6 Economic Impact ... 7 Annual Employment ... 8 Annual Construction ... 8
Total Economic Impact... 9
Fiscal Impact ... 10
County Sales Tax ... 10
Property Tax and Payment In Lieu of Taxes ... 11
State Income Tax ... 13
State Sales Tax ... 13
Case Studies ... 15
Introduction ... 15
Quad/Graphics ... 16
SEPSA/Albatros ... 17
GlobalFoundries ... 18
Attachment A: What is an Economic Impact Analysis? ... 20
Attachment B: Aggregated Multipliers ... 21
Attachment C: Full List of SEDC Projects since 1978 ... 22
Executive Summary
Introduction
After over 35 years of successful economic development efforts in Saratoga County, Saratoga Economic
Development Corporation (SEDC) was interested in quantifying how the organization has contributed to
improving quality of life for county residents through the creation of job opportunities and additional tax
revenue to support public services. To conduct this analysis, Camoin Associates was commissioned by
Saratoga Economic Development Corporation to complete an economic and fiscal impact study on its
operations to calculate the jobs, earnings, sales, and tax revenues that are generated as a result of the
businesses that it assists through its attraction, retention, and expansion programs. In addition to the
quantitative analysis, Camoin Associates also spoke with representatives of three businesses assisted by
SEDC to get more information about SEDC’s role and how the impact ripples through the local and regional
economy. The following is a summary of the major findings of the report with more detail available in the
full analysis.
Methodology
SEDC has assisted with over 200 successful attraction, retention and/or expansion projects during the last
35 years, accounting for approximately 17,500 additional jobs in the County. These projects range from
small startups to large, multinational corporations and everything in between. SEDC works with many
partner agencies to pursue these deals including the Saratoga County Industrial Development Agency,
New York State’s Empire State Development (ESD), regional economic development organizations, local
banks, local colleges, municipalities, and others.
It was clear from the beginning of this project that Camoin Associates and SEDC would be unable to obtain
the necessary job data for every business assisted by SEDC and its partners within a timely fashion, so the
methodology was developed to instead identify a number of projects that SEDC played a vital role in
accomplishing and for which up‐to‐date job information could be gathered. Using these criteria we
identified seven businesses that would act as a sample of the type of impact SEDC has had on Saratoga
County (referred to as “Selected Businesses”). The seven Selected Businesses include:
1. Ace Hardware
2. Ball Corporation
3. GlobalFoundries
4. Quad/Graphics
5. SEPSA/Albatros
6. State Farm Insurance
7. Target
We acknowledge that this analysis only includes a small sampling of the businesses and projects in which
SEDC has played a role, but the methodology was designed to limit the analysis to selected projects for
which, if not for the efforts of SEDC, the businesses would not have located and/or expanded in the
county. In all cases, SEDC called/relied on other partners to assist in securing these projects. However,
these seven projects were cultivated and led to completion by SEDC. The organization was also a
contributor in hundreds of other projects over 3+ decades. In those instances, either its role was as a
partner (where others also played a vital role) or there were other factors beyond SEDC’s efforts that
contributed to businesses’ decision to invest in the county. As such, this study was designed to be very
Economic Impact
In total, the Selected Businesses account for over 5,500 direct jobs (direct impact of operation and
construction) in Saratoga County in 2014 including on‐site employment and annual construction‐related
jobs. These jobs result in additional indirect jobs (created from spinoff spending), earnings (wages paid to
business employees in Saratoga County), and sales (sales made by businesses to consumers or other
companies) throughout the county. The total direct and indirect impact of the seven Selected Businesses
is 9,689 jobs, $480 million in earnings, and over $2.2 billion in sales. For more detail, please see page 8
and 9 of the following report.
*Includes impact of both operations and construction
Direct Jobs 5,546
Indirect Jobs 4,143 Total Annual Job Impact* = 9,689
Direct Wages $370,302,808
Indirect Wages $110,364,218
Total Annual Earnings Impact* = $480,667,027
Direct Sales $1,814,630,415
Indirect Sales $430,408,266
Fiscal Impact
In addition, Saratoga County and municipalities (all taxing jurisdictions) receive over $22.6 million in new
tax revenue annually as a result of economic activity associated with the Selected Businesses. This is a
result of the Selected Businesses paying property taxes and Payments In Lieu of Taxes to the various
jurisdictions, and the sales tax revenue paid by employees spending their money in the county and
businesses selling in the county. For more information please see pages 10 through 12 of the following
report.
Total Sales Tax
Revenue From
Earnings,
$2,523,502
Total Sales Tax
Revenue From Sales, $3,203,409 Total Property Tax Revenue, $16,905,675
Annual County Tax Revenue From Selected
Businesses =
$22,632,586
Introduction
Camoin Associates was commissioned by the Saratoga Economic Development Corporation (SEDC) to
conduct an economic and fiscal impact analysis to measure the organization’s contribution to the county’s
economy. The results of the analysis are intended to be used by SEDC to convey and document the
benefits of SEDC to its members and public leaders in terms of new jobs, wages, and output generated by
the businesses assisted. This report illustrates the total jobs, wages, and output of a select number of
projects for which SEDC provided critical assistance between 1978 and 2014 and determines the tax and
other public revenue benefits accrued to all taxing jurisdictions in 2013 from the subject projects. In
addition to the impact analysis, the report also provides case studies that highlight several of the projects
that SEDC has overseen and how the resulting new investment has positively affected existing local
businesses, workers/residents, and taxing jurisdictions.
History
The Saratoga Economic Development Corporation is a private, non‐profit organization that was formed in
1978 with the mission of creating jobs and diversifying the tax base in order to improve quality of life for
the residents of Saratoga County, New York. SEDC accomplishes these objectives through both the
retention of existing businesses and the attraction of new industry. It also works toward making Saratoga
County an attractive place for businesses to locate.
SEDC’s Board of Directors, comprised of local businesspeople, and staff of economic development experts
work to provide existing and prospective businesses with a range of services to facilitate efforts to locate
or expand within Saratoga County. Since its establishment over 35 years ago,
SEDC has been instrumental in helping local employers invest in the county,
marketing and selling the county to targeted prospects, and building the
county’s capacity to expand economic opportunity.
Over the years, SEDC played a pivotal role in attracting a host of companies,
including Ball Metal Corporation, Quad/Graphics, State Farm Insurance, Ace
Hardware, and Cascades Tissue Group. It was also critical in the more recent development of the $200
million Luther Forest Technology Campus and the attraction of AMD, which subsequently became
GlobalFoundries. Across all of the projects with which SEDC has been involved since 1978, it has helped
to generate more than 17,500 new jobs, $12 billion in investment, and $35 million in total annual property
tax revenue for Saratoga County.
In addition to over 200 successful business attraction, retention, and expansion projects, SEDC is also
consistently working to bring even more new businesses to the area. Its efforts include undertaking trade
missions, developing marketing materials, and promoting Saratoga County as a great place to do business.
On average, SEDC works with approximately 100 different companies on an annual basis, contributing
hundreds of hours of work in its ongoing efforts to grow the county’s economy.
Programs
Over the years, SEDC has assisted over 200 businesses ranging from small local establishments to
international corporations. Equipped with its broad collection of services, SEDC has been successful at
attracting and retaining industry and creating jobs. In addition to offering start‐to‐finish economic
development project management to clients, SEDC is heavily involved in marketing Saratoga County to
prospective employers and investors. SEDC maintains a comprehensive inventory of available buildings
SEDC is actively involved with over 100 businesses each year, working to attract them to Saratoga County.
and sites so that businesses can easily assess opportunities for moving to or expanding within the county.
Among the many businesses that SEDC has attracted to the county are Bast Hatfield, a full‐service
construction company based in Halfmoon; Kivort Steel, an industrial aluminum and steel distributor in
Halfmoon; and Dura‐Mill, a cutting tools producer located in Malta.
Recognizing the importance of collaboration with the public sector, SEDC works as a liaison between its
clients and Industrial Development Agencies (IDAs), local governments, and other public agencies. SEDC
has marketing relationships with Saratoga County’s four IDAs and is responsible for qualifying companies
for IDA incentives and guiding them through the application process. Below are a few examples of
companies that SEDC has helped with IDA programs and funding:
Connected Bobrick Washroom Equipment with the Clifton Park IDA to help finance construction
of a new facility in 1994, and is now providing assistance again with Bobrick’s planned $3.7 million
expansion.1
Assisted Creatacor, a company that designs showcase displays, to secure $140,000 in tax
exemptions from Saratoga County IDA to offset its $1.2 million facility expansion in Halfmoon in
2012.2
Worked with the developer of the planned $55 million Esplanade apartment project in
Mechanicville to secure tax incentives from the Mechanicville‐Stillwater IDA.3
Finally, SEDC also provides financial services, small business assistance, and customized workforce training
programs through the NYS Department of Labor, as well as real estate and labor market analysis.
Methodology
Camoin Associates employed the following methodology to determine SEDC’s contribution to the county
economy. It should be noted that Camoin worked closely with the organization to identify which projects
and businesses to analyze. The process of identifying the businesses considered first, the ability to gather
the current job count for businesses assisted by SEDC; and second, the level of the organization’s role in
each project. The final methodology employed was designed to provide a report that shows a snapshot
of the work done by SEDC by identifying a sampling of the assisted businesses.
1. SEDC provided Camoin Associates with information on all of the businesses it has assisted since
1978.
2. Camoin Associates worked with SEDC to identify the businesses that (a) were a representative
cross‐section of the types of businesses SEDC works with, (b) SEDC played a crucial role in assisting
to either locate or expand in Saratoga County, and (c) had available current job count information
(“Selected Businesses”).
3. SEDC provided current job counts for the Selected Businesses as well as the appropriate NAICS
(North American Industrial Classification System) Code for the company.4 The current jobs at the
Selected Businesses are considered to be the direct impact associated with SEDC’s work.
1 https://saratogaedc.com/2014/general/promoting‐business‐retention‐saratoga‐county
2 http://www.bizjournals.com/albany/news/2012/07/09/saratoga‐ida‐approves‐tax‐breaks‐for.html 3 http://www.dailygazette.com/news/2013/nov/07/agency‐oks‐tax‐breaks‐esplanade‐project/
4 SEDC received job counts directly from the business when available. Information was also provided by the
4. Modeled indirect impacts on jobs/economic activity using multipliers provided through the EMSI
software package.
5. Arrived at total economic impacts as the sum of all direct and indirect impacts in an average year
of operation.
Data Software
Economic Modeling Specialists Intl. (EMSI) designed the input‐output model used in this analysis. The
EMSI model allows the analyst to input the amount of new direct economic activity (spending or jobs)
occurring within the study area and uses the direct inputs to estimate the spillover effects that the net
new spending or jobs have as these new dollars circulate through the study area’s economy. This is
captured in the indirect impacts and is commonly referred to as the “multiplier effect.”
The input‐output model in this report is based on EMSI's gravitational flows multi‐regional social account
matrix model (MR‐SAM). It uses data from the Census Bureau's Current Population Survey and American
Community Survey; as well as the Bureau of Economic Analysis' National Income and Product Accounts,
Input‐Output Make and Use Tables, and Gross State Product data. In addition, several EMSI in‐house data
sets are used, as well as data from Oak Ridge National Labs on the cost of transportation between
counties. State data is also incorporated from the following agencies: New York Department of Labor,
Division of Research and Statistics
The key advantage of EMSI is its ability to model the impact of a variety of different inputs into an
aggregated output to quantify the impact of the individual projects on the study area. The model uses
geographically unique multipliers that take into account local, regional, and national trends to determine
the specific impact on the County. See Attachment A for more information on economic impact analysis.
Impact Analysis
Selected Businesses
The first step of the analysis was to identify those businesses in Saratoga County that were directly
impacted by the work of SEDC. It is clear that SEDC has impacted (and continues to impact) many
businesses throughout the county through its programs and assistance, but it was important that we
identify the businesses that, but for SEDC’s efforts, likely would not have located or expanded in Saratoga
County. It is not to say that SEDC was the only player in these deals (many
also involved an Industrial Development Agency), but SEDC played a large
enough role that we are confident in calling the jobs associated with these
Selected Businesses “net new” to Saratoga County. In other words,
without the work of SEDC, these jobs would not be in Saratoga County and therefore are a result of SEDC efforts. Again, these Selected
Businesses are not the only businesses where SEDC played a large role but
they were selected for the analysis because they also represented a
variety of types of businesses assisted, and current job counts were
available.
Without the work of
SEDC, the Selected
Businesses and associated
jobs would not be in
Saratoga County and are
therefore “net new” as a
The following businesses were identified by SEDC as meeting the criteria for being a Selected Business:
In total, the Selected Businesses employ 5,473 people in Saratoga County5 and account for approximately
$9.4 billion in construction spending.
Economic Impact
The direct economic activity generated by the Selected Businesses as a result of employment and project
cost were used as the direct inputs for the economic impact model. Camoin Associates used the input‐
output model designed by Economic Modeling Specialist International (EMSI) to calculate total economic
impacts. See Attachments A and B for more information.
5 Current employment as reported to SEDC in the first quarter of 2014. Assistance on job counts and earnings of
the Selected Businesses was also provided by the Department of Labor’s Quarterly Census of Employment and
Wages, developed through a cooperative program between the State of New York and the US Bureau of Labor
Statistics.
2014 Jobs 5,473
2014 Earnings $ 363,697,135
Total Project Cost $ 9,419,550,000
Annual Average Project Cost (34 years) $ 277,045,588
Source: Department of Labor Quarterly Census of Employment and Wages, Camoin Associates
Annual
Employment
The table below outlines the direct and indirect economic impact of employment at the Selected
Businesses on Saratoga County. The direct impacts are the current jobs at the Selected Businesses. The
indirect impacts are those that occur as the dollars from direct impacts cycle through the economy. For
example, the new employees receive wages and in turn spend a portion of those dollars in the local
economy for daily needs, housing, and other expenses, and a portion of those dollars are again re‐spent
in the local economy (See Attachment A for more details). As those dollars continue to circulate, additional
jobs and business activity are created. This effect is captured in the indirect impacts. The 5,473 initial
direct jobs thus result in a total of 9,583 jobs, $472.8 million in earnings, and over $2.2 billion in sales in
and around Saratoga County.
Annual
Construction
The work of SEDC contributes to construction and equipment purchasing in the local economy as the
Selected Businesses construct their buildings; purchase furniture, fixtures, and equipment (FFE); and make
other renovations and improvements to property and plants. This construction spending impacts the
economy by generating jobs, earnings, and sales for local construction companies hired to make the
improvements. We can assume that the annual average construction cost will continue as SEDC continues
to attract new businesses and assist existing businesses with expansion.
In total, the Selected Businesses have accounted for over $9.4 billion in construction costs, equipment
purchases, and site improvements, most of which includes the massive $9 billion GlobalFoundries project.
SEDC Selected Businesses have contributed over $277 million in annual construction costs to date. If we
assume that approximately 50% of the total non‐GlobalFoundries construction‐related sales and 3% of
the GlobalFoundries construction‐related sales6 are made within Saratoga County, then there is nearly
$14 million in annual direct construction impact for the county.
6 The GlobalFoundries project is so specialized that most of the project cost could not be sourced from within the
County. A large portion of the necessary equipment was not available from Saratoga County vendors and therefore
had to be purchased elsewhere. During our conversation with GlobalFoundries we learned that most of the large
and expensive equipment and machinery is so unique that it had to be imported from outside of Saratoga County,
and in some cases, the United States. Additional information from the company suggests that approximately 3% of
the materials and labor associated with the project were sourced from Saratoga County.
Direct Indirect Total
Jobs 5,473 4,110 9,583
Earnings $ 363,697,135 $ 109,109,141 $ 472,806,276
Sales $ 1,800,699,091 $ 427,121,255 $ 2,227,820,346
Source: Camoin Associates, EMSI
Economic Impact - Employment
Total Project Cost $ 9,419,550,000
GlobalFoundries Project Cost $ 9,013,000,000
3% of GlobalFoundries Costs (amount spent in County) $ 270,390,000
All Other Project Costs $ 406,550,000
50% of All Other Project Costs (amount spent in County)$ 203,275,000
Total Project Construction Costs Spent in County $ 473,665,000
Average Per Year (34 years) $ 13,931,324
Source: Camoin Associates, SEDC
The following table shows how this $13.9 million annual construction spending, in 2014 dollars, impacts
the Saratoga County economy. The $13.9 million in direct sales for construction results in a total of 106
jobs, $7.8 million in earnings, and $17 million in sales.
Total
Economic
Impact
The following table illustrates the annual economic impact of the construction and employment related
to Selected Businesses.
Another way to look at the economic impact analysis is how one direct job created as a result of the
assistance of SEDC results in additional jobs, earnings, and sales in the Saratoga County economy. The
economic impact shown in the table above is shown in a different way below to illustrate the impact of
one Selected Business job in Saratoga County.
The economic impact analysis finds that for each of the 5,473 direct jobs at the Selected Businesses, there
are total impacts of:
Direct Indirect Total
Jobs 73 33 106
Earnings $ 6,605,673 1,255,078 $ 7,860,751
Sales $ 13,931,324 3,287,011 $ 17,218,335
Source: Camoin Associates, EMSI
Economic Impact - Project Construction
Direct Indirect Total
Jobs 5,473 4,110 9,583
Earnings $ 363,697,135 $ 109,109,141 $ 472,806,276
Sales $ 1,800,699,091 $ 427,121,255 $ 2,227,820,346
Direct Indirect Total
Jobs 73 33 106
Earnings $ 6,605,673 $ 1,255,078 $ 7,860,751
Sales $ 13,931,324 $ 3,287,011 $ 17,218,335
Direct Indirect Total
Jobs 5,546 4,143 9,689
Earnings $ 370,302,808 $ 110,364,218 $ 480,667,027
Sales $ 1,814,630,415 $ 430,408,266 $ 2,245,038,681
Source: Camoin Associates, EMSI
Economic Impact - Project Construction
Economic Impact - Total Annual Impact Economic Impact - Employment
Fiscal Impact
County
Sales
Tax
County Sales Tax from Earnings
The total earnings generated by both employment and project construction ($480 million) as calculated
in the section above titled Total Economic Impact (page 9) leads to additional sales tax revenue for the
county. It is assumed that 70% of the earnings would be spent within Saratoga County7 and that 25% of
those purchases would be taxable8. Under these assumptions, the county receives approximately $2.5
million each year in tax revenue from the earnings impact of the Selected Businesses.
County Sales Tax from Sales
The economic impact analysis found that the total sales impact of the Selected Businesses is
$2,245,038,681 annually (section Total Economic Impact, page 9). Some of these sales would be subject
to sales tax, thereby generating revenue for the county. The full $2.2 billion would not be taxable for two
reasons: 1) the vast majority of the sales are from companies that are part of the supply chain for other
manufacturers and therefore generally not subject to sales tax and 2) sales associated with project
construction are not taxable because many of the projects work with an IDA which can provide the benefit
of sales tax exemption on construction material. However, there will be some sales tax revenue from
general purchases in the local economy by the companies (the indirect and induced impacts) such as
general office supplies, food purchased from local restaurants, hotel stays, etc. For this analysis, we
assume that 25% of the indirect sales associated with the Selected Businesses operation will be subject to
sales tax. With a 3% sales tax rate, Saratoga County earns $3.2 million annually from sales tax associated
with the Selected Businesses.
7 A retail leakage analysis of Saratoga County suggests that a vast majority of the goods and services that
employees will be purchasing are available within the county (food, clothing, vehicles, computers, etc.), but there
still will be some outside spending on travel and through purchases made online and in neighboring counties.
Based on third‐party proprietary retail spending data, 70% is a reasonable assumption for the amount of in‐county
spending. (Source: ESRI Business Analysis Online Retail Market Profile)
8 Camoin Associates assumes that 25% of the sales are on goods that are taxable based on the consumer
expenditure profiles that are published by the Bureau of Labor Statistics. The Bureau of Labor Statistics publishes
information about average American spending habits and a review of this information indicates that approximately
25% of the goods are taxable (clothing, household goods, food away from the home, etc.) and 75% are not taxable
(food at the grocery store, mortgage, investments, etc.). (Source: Bureau of Labor Statistics)
Total Earnings $ 480,667,027
Amount Spent in County (70%) $ 336,466,919
Amount Taxable (25%) $ 84,116,730
County Sales Tax Rate 3.00%
County Tax Revenue From Earnings $ 2,523,502
Source: Camoin Associates, Saratoga County
Annual County Sales Tax Revenue From Earnings
Total Indirect Sales (excluding sales impact of construction) $ 427,121,255
Amount Taxable (25% of the indirect sales) $ 106,780,314
County Sales Tax Rate 3.00%
County Tax Revenue From Sales $ 3,203,409
Source: Camoin Associates, Saratoga County
Total County Sales Tax
Combined together, the sales tax revenue from earnings and from sales results in $5.7 million in sales tax
revenue for the County. The $5.7 million in sales tax revenue from the economic activity associated with
the SEDC Selected Businesses accounts for 5% of the county’s total sales tax collection. A portion of these
funds will be transferred to the various towns and cities within the county.
Property
Tax
and
Payment
In
Lieu
of
Taxes
Property taxes paid by the Selected Businesses make up a significant proportion of Saratoga County,
municipal, and school district budgets (note special districts are not included):
Saratoga County’s 2014 adopted budget totaled $313 million, with all receipts relating to real
property—including property taxes, payments in lieu of taxes (PILOTs), interest, and penalties—
totaling $57 million, or 18%.9 Of that amount, the seven Selected Businesses contributed about
$2 million, or 3%.
The City of Saratoga Springs is home to Ball Corporation and Quad/Graphics. The City’s 2014
adopted budget tax revenues of $16 million, of which Ball and Quad together contributed about
$231,000 in property taxes, or 1.4% of total receipts.10
The Town of Stillwater received about $521,000 in PILOT payments from GlobalFoundries in 2013,
10% of all of its annual spending.11
GlobalFoundries contributed a total of $11.1 million to local school districts for the 2013–14
school year. $8.7 million went to Ballston Spa Central School District, 11% of its total budget.12
The remaining $2.4 million was paid to Stillwater Central School District, comprising 11% of its
budget.13
Together, Ace Hardware and Target contributed $1.6 million to the South Glens Falls School
District, 3% of its total budget.14
SEDC’s success in attracting and retaining businesses keeps property taxes affordable for county residents.
Commercial and industrial land uses pay significantly more for public services than they consume, and are
thus quite beneficial to communities from a fiscal perspective. Residential uses, on the other hand, are
heavy consumers of services. Public education, for example, is by far the single greatest expenditure for
communities. In places with a limited non‐residential tax base, this cost burden of services is placed on
residents. SEDC’s efforts have been critical in helping Saratoga County to diversify its tax base and ensure
that residents alone are not footing the entire tax bill.
9 Saratoga County 2014 Adopted Budget 10 City of Saratoga Springs 2014 Adopted Budget 11 Town of Stillwater 2014 Adopted Budget
12 Ballston Spa Central School District 2013–14 Adopted Budget 13 Stillwater Central School District 2013–14 Adopted Budget 14 South Glens Falls School District 2013–14 Adopted Budget
County Tax Revenue From Earnings $ 2,523,502
County Tax Revenue From Sales $ 3,203,409
Total Sales Tax Revenue From Selected Businesses $ 5,726,911
Total Saratoga County Sales Tax Collected $ 110,700,000
Percent of Saratoga County Sales Tax From Selected Businesses 5%
Source: Camoin Associates, Saratoga County
In total, the seven Selected Businesses contributed $16.9 million in property taxes to the county, its towns, and its school districts. The table below
breaks out this amount by jurisdiction.
Ace Hardware Ball Corporation Global
Foundries** Quad/Graphics
SEPSA/
Albatros* State Farm Target
Total Tax Receipts
Saratoga County $ 83,774 $ 34,508 $ 1,532,107 $ 80,320 $ 790 $ 104,008 $ 157,346 $ 1,992,853
City of Saratoga Springs $ 69,507 $ 161,784 $ 231,291
Town of Ballston‡ $ 0 $ 0
Town of Malta† $ 71,056 $ 6,186 $ 77,242
Town of Stillwater $ 521,212 $ 521,212
Town of Wilton‡ $ 0 $ 0 $ 0
Burnt Hills-Ballston Lake
Central School District $ 6,745 $ 6,745 Ballston Spa
Central School District $ 8,685,512 $ 784,301 $ 9,469,814 Saratoga Springs
City School District $ 181,531 $ 422,528 $ 604,059 South Glens Falls
Central School District $ 557,574 $ 1,047,242 $ 1,604,816 Stillwater
Central School District $ 2,397,644 $ 2,397,644
Total Tax Payments $ 641,348 $ 285,545 $ 13,207,531 $ 664,632 $ 7,535 $ 894,496 $ 1,204,588 $ 16,905,675
*PILOT agreement
**Special PILOT agreement under which GlobalFoundries pays full tax amount
†Includes library
‡Towns with no town property tax
Tax Payments by Selected Businesses to Saratoga County Jurisdictions
County, City, Town, and Library tax payments made by GlobalFoundries are for 2013. Tax payments made to those entities by all other businesses are for 2014. School District tax payments made by all companies are for the 2013-2014 school year.
Source: SEDC; County, municipal, and school district tax records
Note:Eexcept where noted special districts are not included in the PILOT agreements and therefore the Selected Businesses are making additional payments to special taxing districts such as fire districts, lighting districts, water districts, etc.
State
Income
Tax
While not a direct benefit to the county, economic activity associated with SEDC supports earnings and
therefore income tax revenue for New York State. Based on current estimates, sales generated by the
Selected Businesses as calculated above in the section titled Total Economic Impact (page 9) account for
0.19% of the state’s Gross Regional Product (GRP) therefore we assume that 0.19% of the state’s income
tax revenue is from the Selected Businesses’ activity. Using this estimate, Selected Businesses account for
over $75 million in income tax collections for the state. The following table calculates the impact of SEDC
on the state’s income tax collection.
State
Sales
Tax
State Sales Tax on Earnings
The total earnings generated by both employment and project construction ($480 million) as calculated
in the above section Total Economic Impact (page 9) contributes to sales tax revenue for the New York
State. It is assumed that 85% of the earnings would be spent within New York State15 and that 25% of
those purchases would be taxable. Under these assumptions, the state receives approximately $4 million
each year in tax revenue from the earnings impact of the Selected Businesses.
State Sales Tax on Sales
The $106 million in taxable sales associated with Selected Business sales would also result in additional
sales tax revenue for the state. It is assumed that 25% of the total indirect sales impact of the Selected
Businesses will be taxable, under the same assumptions discussed under the section titled County Sales
Tax from Sales.
15 The remaining 15% accounts for spending on travel and purchases made online and in neighboring states.
Total Sales in Saratoga County from Selected Businesses $ 2,245,038,681
Gross State Product of New York State $ 1,200,000,000,000
Percent State GSP from Selected Businesses 0.19%
Total State Income Tax Collected $ 40,226,714,989
State Income Tax from SEDC Activity $ 75,258,776
Sources: EMSI, 2012-2013 New York State Tax Collections, Camoin Associates
State Income Tax Revenue From Selected Businesses
Total Earnings $ 480,667,027
Amount Spent in State (85%) $ 408,566,973
Amount Taxable (25%) $ 102,141,743
State Sales Tax Rate 4.00%
State Tax Revenue From Earnings $ 4,085,670
Source: Camoin Associates, Saratoga County
Annual State Sales Tax Revenue From Earnings
Total Indirect Sales (excluding sales impact of construction) $ 427,121,255
Amount Taxable (25% of the indirect sales) $ 106,780,314
State Sales Tax Rate 4.00%
State Tax Revenue From Sales $ 4,271,213
Source: Camoin Associates, Saratoga County
Total State Sales Tax
The table below summarizes all New York State sales tax revenue generated as a result of employment
and operations at the Selected Businesses. The total impact is estimated at about $8.3 million in sales tax
revenue.
State Tax Revenue From Earnings $ 4,085,670
State Tax Revenue From Sales $ 4,271,213
Total State Sales Tax Revenue $ 8,356,882
Source: Camoin Associates, Saratoga County
Case Studies
Introduction
The impact of SEDC goes beyond just the economic and fiscal impact numbers of these seven Selected
Businesses and can be experienced by businesses and residents throughout the Saratoga County
economy. In addition to quantifying the economic and fiscal impact, the following section qualifies the
impact by summarizing interviews conducted by Camoin Associates with representatives of three of the
Selected Businesses. These interviews were conducted to go beyond the data to understand how SEDC’s
role in the attraction, retention, and expansion of these businesses has real‐life multiplier effects that can
be felt throughout the county by vendors and residents. The interviews were held in early April 2014 and
included conversations about the role of SEDC, how the Selected Businesses use local vendors, and what
impact the businesses have had on retaining and attracting families and talent to the county.
Quad/Graphics
Quad/Graphics is a global printing company founded in 1971 in
Sussex, Wisconsin. Its business lines include print and
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail inserts/circulars, direct mail, books,
directories, and commercial and specialty products. Among the
magazines the company prints are BusinessWeek, Time, Sports
Illustrated, and People. Over the last 43 years, Quad/Graphics has
grown to include over 50 print‐production facilities in the United
States, Canada, Latin America, and Europe. It opened its Saratoga
Springs printing facility at the Willard J. Grande Industrial Park in
1985. The company’s Saratoga Springs location began as an
80,000‐square‐foot plant with 180 employees and has since
expanded to over 1 million square feet, making Quad/Graphics
one of the largest employers in Saratoga County.
Camoin Associates spoke with Dan Frankowski, plant director at
Quad’s Saratoga Springs plant, about the company’s experience
with SEDC. In 1984, Quad/Graphics decided to expand from its
Wisconsin headquarters into the Northeast. After evaluating sites
throughout the region, Quad was able to narrow its options to
Seacaucus, New Jersey, and Saratoga Springs. SEDC played a
critical role in selling the company on a Saratoga County location,
touting the county’s high quality of life and skilled labor pool. Even
considering the advantages that Seacaucus’s proximity to New
York City would afford, Quad ultimately opted for Saratoga
Springs.
With a site chosen, a dozen employees relocated from Wisconsin
to Saratoga County to oversee the opening of the new plant. Since
then, the plant has grown to employ 800 workers with an annual payroll of $29.5 million. Almost 70% of
employees live in Saratoga County today.
In addition to employing hundreds of workers, Quad/Graphics contracts
with numerous county vendors. Middle Grove‐based general contractor
Munter Enterprises, for one, has worked on a variety of construction
projects for Quad over the years. W.J. Morris Excavating of Saratoga
Springs provided excavating services when Quad expanded its facility.
Other local vendors include Allerdice Building Supply in Saratoga Springs
and F.W. Webb of Ballston Spa for plumbing services. Quad/Graphics has
also made $6 million in charitable donations in the county in the last 10
years.
Quad’s constant stream of business travelers have also helped to support
the local economy over the years, with visitors patronizing a number of
local hotels and restaurants during their stay in Saratoga County. Quad even purchased a mansion, known
as the Brackett House, on North Broadway in Saratoga Springs that the company uses to accommodate
its out‐of‐town clients.
SEDC
instrumental
in
continuing
promotional
sales
tax
exemption
in
New
York
In 2009, the New York State
legislature considered abolishing the
promotional sales tax exemption
that relieved Quad/Graphics and
other printers from having to charge
sales tax on catalogs and other items
of a promotional nature. Ending the
exemption would have disastrous
effects for the industry, jeopardizing
400 jobs at Quad/Graphics. It would
have prevented printers from being
able to compete with states still
offering the exemption.
SEDC was the first to bring the
proposition to the attention of
Quad/Graphics and was heavily
involved in rallying other industry
members in opposition. SEDC staff
arranged a meeting of industry
leaders and members of the
legislature, ultimately resulting in the
exemption being put back into the
bill. SEDC’s proactive advocacy saved
hundreds of Saratoga County jobs.
“Very
good
experience
working
with
SEDC.
They
got
behind
the
process
and
supported
us.”
—
Dan
Frankowski
Plant
Director
SEPSA/Albatros
SEPSA North America is a division of Corporación Albatros, headquartered in Madrid, Spain. SEPSA
designs and manufactures static converters for passenger rail and subway cars. SEPSA has built and
retrofitted converters for passenger rail systems in 24 countries with more than 20,000 converters and
18,900 electronic systems in service around the globe since the company was founded in 1981. The
company’s 36,000‐square‐foot Ballston facility opened in 2011.
Camoin Associates interviewed a representative at SEPSA about
the role SEDC played in SEPSA’s decision to relocate its facility to
Saratoga County. By late 2009, SEPSA had outgrown its 17,000‐
square‐foot building in Schenectady, New York, and began the
process of searching for a more adequate facility. Having decided
to purchase a site instead of continuing to lease, SEPSA
management initially focused their search to Schenectady and
Albany counties but later decided to consider Saratoga County, as
well. After a site in Malta proved unsuitable, they contacted SEDC
staff for assistance.
SEDC was instrumental in facilitating SEPSA’s relocation process.
In addition to assisting SEPSA with selecting its current site on
McCrea Hill Road in Ballston, SEDC guided SEPSA through the IDA
application process, helped garner support from local officials,
and fast‐tracked the project through the necessary Planning
Board approvals required to begin construction. Timing was very
important to SEPSA, and working with SEDC allowed the company
to move through the relocation process swiftly. For example,
securing Planning Board approvals that would normally take
several months required just one meeting. SEPSA stressed SEDC’s
strong relationships with local officials, the IDA, and other stakeholders as critical to the ultimate success
of the project. SEDC’s ability to gain support for the project from all the involved parties made the
experience a very positive one for SEPSA.
Since relocating to Ballston, SEPSA has been able to draw from the
local labor pool. SEPSA estimated that four to five of its new hires live
in Saratoga County. As the company begins work on a new large
contract, SEPSA anticipates adding additional employees, some of
whom will likely come from the county.
SEPSA used several Saratoga County vendors for construction of its
new facility. Aztech Technologies, located just across the street from
SEPSA, performed groundwork at the site. Malta‐based DJ Rossetti Inc.
poured concrete for the building’s foundation. A Clifton Park‐based
engineering firm assisted SEPSA with securing LEED‐Silver certification
for its facility. County Waste, in Halfmoon, continues to provide waste disposal services. Finally, Integrated
Staffing, headquartered in Saratoga Springs, provides SEPSA with temporary staffing services. At any given
time, SEPSA employs two to six temporary workers.
The facilitator role played by SEDC was crucial in attracting SEPSA to Saratoga County. SEDC drew on its
experience and relationships to make the process as quick and easy as possible for SEPSA. Its efforts
paid off, and SEPSA continues to be a valuable addition to the county’s economy.
SEPSA
business
travelers
contribute
to
local
economy
Frequent visits by business travelers
from Spain to SEPSA’s Ballston
location help to support the Saratoga
County economy. Managers and
engineers based at SEPSA’s facilities
in Spain make regular visits to
Ballston, both short‐ and long‐term.
Short‐term visitors enjoy the many
accommodations that Saratoga
Springs has to offer and contribute to
visitor spending in the area.
Additionally, SEPSA currently has
two long‐term visitors from abroad,
each carrying out three‐year
assignments, who are living in
Saratoga County.
“Small,
focused
team
to
help
you
navigate
the
local
government.
They
have
all
the
information
and
tools
necessary.”
GlobalFoundries
GlobalFoundries is a semiconductor foundry headquartered in Santa Clara, California. It was created in
2009 through a partnership between Advanced Micro Devices (AMD) and the Advanced Technology
Investment Company (ATIC) and is now fully owned by ATIC. The company manufactures integrated
circuits for companies including Broadcom, Qualcomm, STMicroelectronics, and its former partner, AMD.
It has seven fabrication plants in Singapore and Germany. Its eighth
plant—known as Fab 8—broke ground in 2009 in Malta, New York, at
the Luther Forest Technology Campus. Phase 1 of the plant will
eventually total 2.9 million square feet, and by the end of 2014, the
plant will employ over 3,000 workers with an average salary of
$87,000. GlobalFoundries’ reliance on a complex network of suppliers
has led more than two dozen companies to set up operations in and
around Luther Forest, so far creating 1,800 additional jobs in Saratoga
County.
Camoin Associates asked Travis Bullard, GlobalFoundries’ senior
manager of public affairs, about the role that SEDC played in the
company’s decision to open a new plant in Saratoga County. In 2006,
AMD manufacturing operations were based at a single plant in
Dresden, Germany, when management had begun considering the
possibility of expansion somewhere in the world. SEDC led a group of
New York State entities, including Empire State Development
Corporation (ESDC) and the office of then Governor George Pataki, in
reaching out to AMD decision‐makers. SEDC pitched Saratoga County
as a great fit for a new AMD plant, given that the attraction of
semiconductor manufacturing was a key component of the region’s
and state’s economic development strategy.
Long before AMD had even considered Saratoga County as a
possibility, SEDC had been working to prepare the county for its future role as the host community of a
chip fabrication plant. Because this type of facility is very technologically complex, an appropriate site
requires a number of improvements to make plant operations feasible. In addition to needing a large
amount of land, the site requires a great deal of water and power, suitable access to transportation
networks for chemical transport, etc. Armed with the extensive
research it had conducted into the needs of semiconductor
manufacturers, SEDC was able to prepare an ideal site at the Luther
Forest Technology Campus. When AMD site selectors visited the
county, they found a site that was shovel‐ready. The comprehensive
efforts of SEDC and its partners to prepare the site, together with the
attractive economic incentives offered by the State, were enough to
compel AMD to locate in Saratoga County.
GlobalFoundries’ massive global supply chain has positively impacted
the county. The company’s operations require highly specialized
equipment that it purchases from a variety of global vendors. Because
this equipment needs frequent technical support, maintenance, upgrades, etc., engineers and technicians
from vendor companies must have a presence at or near Fab 8. This has led to the creation a number of
indirect jobs in the county, as suppliers set up satellite offices in the county in order to provide adequate
GlobalFoundries
workers
from
abroad
bring
economic
and
cultural
diversity
SEDC’s success in attracting
GlobalFoundries to Saratoga
County has boosted the local
economy in a number of ways.
In addition to providing jobs to
locals, the Fab 8 plant in Malta
has brought high skilled workers
from around the world to the
county.
Plant workers hail from over 40
countries, creating a demand for
international products in the
region. Regional grocery chain
Price Chopper, for example, has
expanded its offerings of
international foods to cater to
the newcomers.
“SEDC
was
our
go
‐
to
advocate
and
resource
to
get
all
of
the
pieces
together.”
—
Travis
Bullard
Sr.
Manager,
Public
Affairs
service to GlobalFoundries. Tokyo Electron, for example, a supplier of production equipment, opened an
office of 50 employees in Malta.
Approximately half of Fab 8’s 2,200 employees were hired locally, while the other half were relocated
from around the world. About 70% of all employees reside in Saratoga County, with the remaining 30%
living throughout the Capital Region. This even split of local and global employees benefits the county in
two ways: Not only are locals provided with well‐paying jobs, but the influx of workers from abroad with
high spending power has boosted the local economy and expanded the market of buyers for all sorts of
goods and services.
SEDC’s proactive efforts to attract a semiconductor plant for Saratoga County paid off tremendously—
Attachment A: What is an Economic Impact Analysis?
The purpose of conducting an economic impact study is to ascertain the total cumulative changes in
employment, earnings and output in a given economy due to some initial “change in final demand”. To
understand the meaning of “change in final demand”, consider the installation of a new widget
manufacturer in Anytown, USA. The widget manufacturer sells $1 million worth of its widgets per year
exclusively to consumers in Canada. Therefore, the annual change in final demand in the United States is
$1 million because dollars are flowing in from outside the United States and are therefore “new” dollars
in the economy.
This change in final demand translates into the first round of buying and selling that occurs in an economy.
For example, the widget manufacturer must buy its inputs of production (electricity, steel, etc.), must
lease or purchase property and pay its workers. This first round is commonly referred to as the “Direct
Effects” of the change in final demand and is the basis of additional rounds of buying and selling described
below.
To continue this example, the widget manufacturer’s vendors (the supplier of electricity and the supplier
of steel) will enjoy additional output (i.e. sales) that will sustain their businesses and cause them to make
additional purchases in the economy. The steel producer will need more pig iron and the electric company
will purchase additional power from generation entities. In this second round, some of those additional
purchases will be made in the US economy and some will “leak out.” What remains will cause a third
round (with leakage) and a fourth (and so on) in ever‐diminishing rounds of spending. These sets of
industry‐to‐industry purchases are referred to as the “Indirect Effects” of the change in final demand.
Finally, the widget manufacturer has employees who will naturally spend their wages. As with the Indirect
Effects, the wages spent will either be for local goods and services or will “leak” out of the economy. The
purchases of local goods and services will then stimulate other local economic activity; such effects are
referred to as the “Induced Effects” of the change in final demand.
Therefore, the total economic impact resulting from the new widget manufacturer is the initial $1 million
of new money (i.e. Direct Effects) flowing in the US economy, plus the Indirect Effects and the Induced
Effects. The ratio between Direct Effects and Total Effects (the sum of Indirect and Induced Effects) is
called the “multiplier” and is often reported as dollar‐of‐impact per dollar‐of‐change. Therefore, a
multiplier of 2.4 means that for every dollar ($1) of change in final demand, an additional $1.40 of indirect
and induced economic activity occurs for a total of $2.40.
Key information for the reader to retain is that this type of analysis requires rigorous and careful
consideration of the geography selected (i.e. how the “local economy” is defined) and the implications of
the geography on the computation of the change in final demand. If this analysis wanted to consider the
impact of the widget manufacturer on the entire North American continent, it would have to conclude
that the change in final demand is zero and therefore the economic impact is zero. This is because the $1
million of widgets being purchased by Canadians is not causing total North American demand to increase
by $1 million. Presumably, those Canadian purchasers will have $1 million less to spend on other items
and the effects of additional widget production will be cancelled out by a commensurate reduction in the
purchases of other goods and services.
Changes in final demand, and therefore Direct Effects, can occur in a number of circumstances. The above
example is easiest to understand: the effect of a manufacturer producing locally but selling globally. If,
however, 100% of domestic demand for a good is being met by foreign suppliers (say, DVD players being
imported into the US from Korea and Japan), locating a manufacturer of DVD players in the US will cause
a change in final demand because all of those dollars currently leaving the US economy will instead
remain. A situation can be envisioned whereby a producer is serving both local and foreign demand, and
an impact analysis would have to be careful in calculating how many “new” dollars the producer would