Economic downturn and rising taxes mark return of movement

Section: Main,  Page: A3

Date: Thursday, December 4, 2008

ALBANY -- After more than a decade out of the spotlight, tax protesters are heading back to court.

This time, they are questioning the constitutionality of the Legislature's practice of giving money to private businesses as often pork-laden member items or economic development initiatives.

"We need to do whatever is necessary to keep them in the box,'' Bob Schulz said Wednesday, referring to the endless proclivity of lawmakers to hand out taxpayer money.

Schulz, who lives in Queensbury, gained a measure of fame more than a decade ago with a series of lawsuits opposing "back-door borrowing," such as the Urban Development Corporation's 1990 purchase of Attica prison. That move raised money for economic development -- but also increased the state's indebtedness without a public referendum.

Schulz wasn't a party to Wednesday's proceedings, but showed up along with a handful of other tax protesters to hear arguments in Buffalo-area lawyer James Ostrowski's "Stop the Pork" lawsuit, filed on behalf of Lockport businessman Lee Bordeleau and others, including an organization that opposes wind turbine development.

Ostrowski argued before Albany County Supreme Court Justice Michael Lynch that economic development grants violate constitutional proscriptions against giving money to private entities.

In addition to the state, defendants in the suit include Advanced Micro Devices, which is part of the consortium planning a chip factory at the Luther Forest tract in Saratoga County.

Also named were IBM, Bass Pro Shops and the Buffalo Hyatt-Regency, as well as the Empire State Development Corp. and Urban Development Corp.

Asking for dismissal of the suit, Assistant Attorney General Robert Siegfried maintained that money could be given out for a public purpose such as job creation. Grants are typically handed out through public benefit corporations.

While both attorneys made brief but logical arguments, some of the discussion about economic development grants echoed criticisms that have raged for years.

Ostrowski, for example, noted the grants are often cloaked in secrecy. In 2006, the Times Union went to court to force lawmakers to unveil details of their member items.

Others have criticized the grants for failing to produce the promised number of jobs.

Rick Karlin can be reached at 454-5758 or