Tariffs Hit Home In the Finger Lakes

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FINGER LAKES — Farmers, school districts, and businesses try to find their way in uncertain economic times.

Farmers are battling financial losses. Home builders and home buyers — all are feeling the effect of tariffs. Millions of dollars are planned for school capital projects, but costs may be rising.

This summer, with prime time for big projects at schools across the Rochester and Finger Lakes area taking place, a price jump in aluminum and steel is forcing decisions by school boards and taxpayers about what to do.

Scale back or spend more money?

A slew of market factors are influencing the price of everything from milk to masonry.

President Donald Trump tweeted recently, “Tariffs are the greatest.” The question: What role do tariffs play in rising costs for local projects and goods and what’s at stake?

Farmers’ $12 billion ‘Band-Aid’

President Donald Trump this past week said $12 billion in aid is headed to farmers, a reaction to the fallout from the president’s own tariffs.

In a statement, New York Farm Bureau President David Fisher said the ”$12 billion plan to support farmers caught up by the retaliatory tariffs slapped on U.S. agricultural products recognizes the dire need for some relief. Farmers are already facing the financial consequences of the trade barriers. Commodity prices are once again dropping at a time when farm income has been at its lowest point in years.”

Farmers in the Finger Lakes have taken a hit, said John Sorbello, state Farm Bureau regional director for Ontario, Wayne, Yates, Cayuga and Seneca counties.

“A lot of folks are hurting right now,” said Sorbello, a former dairyman turned nursery stock and vegetable farmer who lives in Manchester. Mentioning a long period of depressed milk prices and other obstacles local farmers face, “the last thing these guys needed was taking it on the chin like this,” he said.

While farmers aren’t turning away from an influx of government cash, they say it’s not addressing the root cause of the problem.

“The $12 billion is a Band-Aid and what it amounts to remains to be seen,” Sorbello said.

Fisher said in the end, what farmers are asking for are open markets to sell the quality products they produce.

“We hope that the trade matter will quickly be resolved because short-term relief can only go so far when farmers need to plan for the long term.”

Farmers really depend on trade today, said Sorbello. By value, about one-quarter of the agriculture industry depends on exports.

With things “mixed up in politics or tariffs, there is a lot of uncertainty out there,” said Sorbello.

“When countries find they get a better deal buying from countries other than the United States, farmers here lose those markets,” Sorbello said.

Once lost, “it could take years trying to rebuild those markets,” Sorbello said. The longer this trade trouble plays out, “the worse we may be,” he added.

The aid plan borrows money from the U.S. Treasury to pay producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs.

“The Trump Tariff Aid plan draws on the financial resources of a program known as the Commodity Credit Corporation (CCC) and Section 32 funding,” said Jim Wiesemeyer, Pro Farmer’s Washington policy analyst, in a July 24 AgWeb report.

“The initiative does not authorize any new money and thus does not need approval from Congress. But U.S. taxpayers will see deficits go still higher,” he said.

Overbids plague schools

Voters in the Naples School District head to the polls Sept. 11 over whether to approve an additional $2.35 millionfor a $7.7 million capital project they approved in May 2017.

It’s not certain the full additional funds will be needed, but it’s pretty likely, according to Naples Superintendent Matt Frahm.

“After speaking with a number of experts in the field and reviewing area school projects that have come in over bid in the past year, we believe that the costs for construction will come in significantly higher than what our community members have authorized us to spend,” Frahm told the Daily Messenger. “While this is disappointing, we have no control over a market that is saturated with work, a regional shortage of labor, and rising prices involving aluminum, oil and shipping.”

Districts across the state are faced with similar dilemmas.

Fortunately, in some cases like Naples, the additional funds don’t require a tax increase. But the situation has officials scrambling to reassess projects, inform and win over taxpayers, schedule votes and struggle with how to budget for future building improvements.

“From everything we hear, costs will continue to rise,” said Mitch Ball, assistant superintendent of business at Naples.

Dozens of districts across the region have seen their projects overbid. They include North Rose-Wolcott, by $3.9 million; Honeoye Falls-Lima, by $3.17 million; and Churchville-Chili, by $2.3 million. Wayland-Cohocton could need an additional $2 million and Gananda needs about $600,000 more.

How much is due to tariffs?

Todd Labarr is president of Watchdog Building Partners, an upstate New York building management company.

Labarr said the biggest factor driving the price hike is a shortage of construction workers and skilled tradesmen. “A labor shortage is the biggest piece of it,” he said, adding that combines with other factors that include material costs.

“Tariffs have affected the cost, with a fear factor,” Labarr said. He explained how rising costs for construction materials and uncertainty about the future play into the equation.

Asphalt is one example of the price spike, which he estimated at about 25 percent.

“With asphalt there have been four increases in cost since spring,” he said. “A year ago there were maybe one or two increases.”

Political play

Floyd Rayburn is founder and owner of F.G. Rayburn Mason Contractors, a Hopewell-based company known for its brick, block and stone work. It has projects throughout upstate New York for homeowners, businesses and general contractors, and clients include Wegmans Food Markets, Walmart, Lowe’s, Seneca Park Zoo and numerous school districts.

Rayburn said his price for materials spiked over the past six to eight weeks.

“With concrete and steel prices, it has gone crazy,” said Rayburn, who has been in business since 1981. Tariffs are part of the problem, he said.

“Politics is affecting everything,” Rayburn said.

A former Republican candidate for state Senate, Rayburn said tariffs and other factors such as the shortage of skilled labor are topics for discussion with Associated Builders and Contractors Inc. of which he is a state board member.

“Everybody is dealing with this,” he said.

Watch for continuing coverage on the local impact from developments in trade and tariffs.

The tweet

President Donald J. Trump: “Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that — and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!”

By the numbers

$1.6B New York annual exports threatened by emerging trade war

$1.2B Exports to Canada targeted for retaliation

2.7M New York jobs supported by global trade

SOURCE: U.S. Chamber of Commerce: “Trade Works. Tariffs Don’t” at https://www.uschamber.com/tariffs. Visit www.TheWrongApproach.com to see the impact of new tariffs on all 50 U.S. states.

This story was provided by our News Partners at  Messenger Post Media.