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Private firms most important in area economy, readers say

Though the Rochester area’s 25 biggest non-profit organizations now employ more people than the combined total of the area’s top 25 private firms and top 25 homegrown public companies, a majority of respondents to this week’s RBJ Daily Report Snap Poll say private companies are the most important part of the local economy.

More than half of respondents to this week’s poll say private companies are the most important part of Rochester’s private-sector economy.

This year’s RBJ 75—an annual report on the area’s leading public, private and non-profit businesses, which appears as a supplement to this week’s print edition—shows that the area’s top non-profit organizations employ 60,475 people. The 50 public and private companies that make up the rest of the RBJ 75 employ 50,537 people.

Roughly 36 percent of poll respondents say non-profit organizations have the most significant impact on the local economy. Nine percent chose homegrown public companies.

Again this year, the University of Rochester is the largest employer among non-profits—as well as the largest for the RBJ 75 as a whole.

Roughly 375 readers participated in this week’s poll, which was conducted July 25 and 26.

In your view, which of the following is the most important part of Rochester’s private-sector economy?
Private companies: 55%
Non-profit organizations: 36%
Public companies: 9%


As non-profits such as UR continue to grow, there are positive and negative results to the local economy. Each time they expand, more properties are removed from the tax rolls, adding to the property tax burden of homeowners and for-profit businesses. RIT and UR are both well-funded private and yet non- or not-for-profit financial machines—neither of which pays a dime in property taxes on their large and ever-expanding complexes. Yet they still use taxpayer-funded services such as the fire departments without contributing a share of the expense.
—Bill Mohrman

I would say that private and public companies are still the most important part of the economy. Non-profits like RIT and UR might bring money in, but most other non-profits I know about rely on government money or donations from the public, which I do not feel are reliable sources in today’s economy.
—Damian Kumor

Non-profits not only employ people in a vast array of professions and levels but also provide the social safety net in terms of health care and services. Meanwhile, our academic institutions educate our present and future workforce, thereby setting the stage for individual and collective economic recovery.
—Monica Mattioli, associate dean, Genesee Community College at Lima

Although I appreciate the positive economic impact non-profits such as the University of Rochester bring to our local economy, I am very concerned about the erosion of the property tax base in the municipalities in which they are expanding. Legislation needs to be drafted that protects the communities in which they are physically situated from the adverse effect of losing property tax revenues. The loss of revenue should be absorbed by all communities in the region, and not just the ones in which the non-profits are located.
—Michael J. Lebowitz, real estate broker

It’s good to see the rise of the non-profit organization. Unfortunately, many “for-profit” companies are in the red directly or indirectly because of the insane tax-and-spend policies of local, state and federal government.
—John Rynne, president, Rynne, Murphy & Associates Inc.

You should have added the sector of people working for and those supported by the government. Add those numbers and they become the most important to the economy.
—Ron Borden

What may be viewed by many as an economic boon in non-profits is exactly the problem in our U.S. economy. Non-profits are consumers of transfer payments from tax collections (Medicare, Medicaid, SSI payments, etc.). If a family cannot afford college tuition, it applies for financial aid and loans guaranteed by the government. Where is the value? The only way to create value and create capital is private enterprise. The loss of private enterprise jobs is the root of our economic problems local, statewide and on the national level. The remedies can be covered in another RBJ poll.
—Dennis Kiriazides, retired

I checked the non-profit organizations, primarily because so much research and development is being done at our local colleges and universities. That R&D will produce new technologies and new businesses, which bode well for Rochester’s future economy.
—Don Adair, Adair Law Firm

This question needs clarification as to the definition of non-profit organizations. All of the educational, hospital and insurance companies (BlueCross BlueShield, MVP) are non-profit institutions and major employers and contributors to the local economy. Other non-profits such as the United Way, ABC, Urban League, Medical Motor, etc., contribute to the local economy but are a very small part of the equation. They all receive a substantial amount of revenue from all levels of government (with the exception of the United Way), so the government is an important part of the local economy. All of the sectors are important to the economy of this region; you cannot select one over the other.
—Richard Schauseil

I would question calling the University of Rochester a “non-profit” organization. Regardless, when you aggregate the employment impact of all SUNY campuses, K-12 education and governments in our wider area, these have clearly become the major component of our economic engine.
—Frank Muscato

OK, it’s time to get real. The president can’t do it by himself, and we can’t expect him to. People, were you listening Monday night? The big companies are getting the breaks, the little companies are getting taxed to death, and it’s the same in the non-business world, as well. The rich pay less taxes, and the mid- and low-income pay the same if not more. I know it’s the land of the free, but nothing is free! Freedom is not free. It’s time we roll up the welcome mat, bring home our troops and recall some of these loans we have out to the big companies and countries. Let’s rebuild America. Let’s make it a place to be proud of again.
—David DeMallie

This is a question that good in-depth job analysis by your staff could answer. As a public opinion leader, you need to change the question(s): How many private-sector jobs—private and public companies combined, a choice your survey doesn’t allow—are there in the community vs. looking at the single largest employers’ numbers? What’s the comparison between the average salary and educational requirements of all of the employers? What employers have and are hiring the kind of people that have more than a high school education? These jobs are the ones that count in any community. The Rochester area has a significant number of companies that are on the leading edge of their fields that employ people with skills and education beyond the minimum. This is the kind of employment we want. The UR employs some people with high skill and educational backgrounds, but nowhere near the number that a manufacturing company or software/high-tech company employs by job type percentage comparison.
—Bob Volpe, Highland Development Services 

Unfortunately non-profits, since they are exempt from many tax payments and other financial obligations to the community. This reduces the means for the obligations of governments for the good of the community and citizens. On the other hand, the non-profits need the help of private and public companies to survive and strive. Thus, they directly support private enterprise. The employees of the non-profits, however, pay taxes, Social Security and Medicare just as much as employees in private enterprises, and add to the local economy. Many non-profits provide employment and services that private enterprises don’t want to or are unwilling to do, but which are needed for the good of the county and towns. It is not the fault of the non-profits that private and public companies have not been capable or willing to grow the economy to make them the dominant force in the county and towns. Especially our biggest public companies have been mostly active in reducing employment and thus adding to the financial problems of all local governments, county and towns. Most private companies are too small to make a significant contributions individually. Without non-profits, the county and towns would be in deeper financial trouble than they are now.
—Ingo H. Leubner, Crystallization Consulting

While the non-profits may employ more people, I still believe our strong private companies are the greatest contributor to our local economy.
—Hutch Hutchison, In T’Hutch Ltd.

Most of the private for-profit businesses have left New York or closed, leaving us with the not-for-profits who by their nature cannot leave. It’s a sorry state of affairs, but we’ve done it to ourselves by electing politicians such as Gantt, Morelle, Robach, Susan John, Harry Bronson, Alesi, Nozzolio—all of whom are members of the Government Class and who have watched from the sidelines as our businesses have gone out of business or left the state.
—Bob Sarbane

7/29/11 (c) 2011 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.



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