Happy talk

two heads better than one

Eighteen months ago, Ulster County executive Mike Hein announced that up to 250 new jobs would be created by a firm called SourceHOV in the Town of Ulster. The company would process state paper personal tax returns and remittances. Hein’s statement gave credit where he said it was due: “It was a county tax decrease, great workforce and available location that tipped the balance in this decision.”
“We were told earlier this week that they will be pulling out in August,” said one worker on May 8 of this year, 18 months later. The person is not being identified by name because he or she signed a state non-disclosure agreement. Another worker on the same shift confirmed the notification.

Hein’s office has not yet released information on the situation at SourceHOV. The news is discouraging. If there have been major new job hirings in Ulster County beyond those of that firm in the past 18 months, Hein’s website has not announced them.

Though “operations managers, supervisors, trainers, project specialists and team leaders, as well as staff in the areas of information technology support, data entry and quality assurance” were cited in Hein’s December 2012 release, the majority of jobs at the Ulster location involved data entry, keyboarding and clerical tasks. “New jobs and investment in the county are very welcome,” said Hein in his press release then, “especially since we have such a skilled workforce in this area.”

SourceHOV, which has locations in Binghamton and New York City, still processes tax returns for New York City. The Ulster employees were told these would be processed elsewhere.

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Contacted at the Texas headquarters of SourceHOV, spokesperson Jennifer Fredericks declined to provide additional information. Lex Van Loon, an on-site executive at the Boice’s Lane facility where the processing took place, did not return two phone calls.

Back in December 2012 the county executive had presented Francoise Dunefsky, Gateway Community Industries president and CEO, with the county government’s first Business Ambassador Award, bestowed on her because of her efforts “to attract the company SourceHOV to locate in Ulster County, thus creating over 200 new jobs, a percentage of which will be offered to people with varying abilities served by GCI [Gateway] employment preparedness programs.”

Citing the same state pledge of confidentiality, Dunefsky last week said she was not able to provide information on SourceHOV’s local status.

The proportion of New York filers making paper tax returns has been declining rapidly. When SourceHOV, which describes itself as “a global provider of transaction processing solutions, strategic consulting and data analytics services,” made its decision to locate in Ulster, approximately a million and a half paper state tax returns were being filed. The number is believed to be much lower now. Tax transaction processing has become overwhelmingly digital.

Does this all sound familiar? It’s a new verse to the same sad song that has been playing for the past 18 years.
In March 1996, after the closing of the IBM facility in Kingston, governor George Pataki came to the facility IBM had vacated to announce that 4000 tax processing jobs would be transferred there from the Albany area. Some 850 of them were state jobs and the other 3150 were in Fleet Financial Services. Fleet would have ample space “to grow computer imaging to convert paper into electronic records.”

Albany-area politicians were aghast. State comptroller Carl McCall, who would later run against Pataki for governor, said he’d seek to block the relocation. After months of haggling, some state tax processing facilities were moved to Kingston.

The lion’s share of the Kingston work was seasonal, and it consisted of back-office clerical work. Fleet’s goal, it said, was to use its skills to fill out the calendar with new business: other governmental tax processing, plus financial and healthcare transactions. That never happened as much as had been hoped. The state tax department remained its major customer.

Bank of America bought Fleet in 2004 for $47 billion in stock. In February 2011 Bank of America announced it would shutter its tax processing center in Kingston. At that time the Albany Times-Union estimated that the operation was providing 100 full-time jobs and 1500 seasonal ones.

SourceHOV, which took over the tax processing, has more than 70 locations in this country and operations in Canada, Mexico, India, China and the Philippines.

False optimism, an unwise analytical tool particularly prevalent in the American heartland, has long been a mainstay of Ulster County business. One can try to wish a healthier economy into being by celebrating false strengths and ignoring real weaknesses, of course, but it’s not a very good idea. The worst thing about stubbornly nursing an illusion is that it begins to create a reality of its own. People see only what they want to see.

“Mirror, mirror upon the wall,
Who is the fairest of them all?”
The mirror answered,
“Thou, O queen, are the fairest of all.”
— Snow White, 1937

The present plan
To provide a sense of the health of an economy, economists look to a variety of indicators such as labor-market reports, financial results, construction indexes, real-estate transactions and stock-market barometers. The tea leaves they have been recently poring over have been painting a complex and self-contradictory picture. Indicators show an economy simultaneously turning upward and wobbling unsteadily.

You want to see happy? Then you’ll see happy. Unhappy, you’ll see unhappy.

Though mixed signals can be vexing, they’re what businesspeople facing marketplace decisions must sometimes deal with. In its technical definition, business confidence is the degree of optimism on the state of the economy that consumers express through their activities of saving and spending. In a situation like the present one, where businesses have been on the ropes for a while, their managers, lacking business confidence, tend to be cautious in their hiring and borrowing practices.

The Hudson Valley economy is improving, but very slowly. For every positive indicator, the pessimists see two negative ones. The pundits’ description of the national economy as “still fragile” fits the local one as well.
Instead of jumping on every potential job creator as the next salvation (read “casino gambling”), Ulster County would be better advised to devise a flexible but sound economic development strategy to replace Ulster

Tomorrow, its present obsolete and ineffectual effort. What’s the present plan? A PR man under county hire has convened three focus groups and is now preparing a marketing campaign.

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