Lourdes completes $70M Mission 2012 project

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BINGHAMTON — After three years and $70 million, Lourdes Hospital completed its Mission 2012 project and celebrated with an open house at the new facility

Hardinge reports improved first quarter

Manufacturing & Engineering, Regional News

ELMIRA — Machine-tool manufacturer Hardinge, Inc. continued its return to profitability with a strong first quarter in which profit jumped and sales edged up. Hardinge

Bankers Healthcare Group reaches $1 billion in loans

Employee Benefits & Human Resources, Health Care, Insurance & Financial Services, Subscriber Only

SYRACUSE — Reaching $1 billion in loans is just another milestone for a company that has averaged 2,526 percent growth over the last decade. This sustained expansion has earned Bankers Healthcare Group, Inc. (BHG) continued recognition on Inc. magazine’s list of the fastest-growing companies in America. BHG is a private-equity corporation that originates, funds, and

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BHG is a private-equity corporation that originates, funds, and places loans to licensed health-care professionals. The company, which operates in 43 states and, to date, has served more than 50,000 clients, was started by Robert Castro, Eric Castro, and Albert C. Crawford in 2001. The trio met on Martha’s Vineyard and soon joined together in a company called Apex Financial Services. The three partners bought the company within a year and changed the name to Bankers Healthcare Group in August 2002. At the time of the launch, BHG’s start-up capital amounted to a scant $25,000. Within three months, the fledgling company generated $5 million in loan sales.

Corporate headquarters is located in the Ft. Lauderdale, Fla. area, where the Castros oversee sales origination and funding. Crawford, the chairman and CEO of BHG, is responsible for marketing, credit underwriting, accounting, collections, and bank sales from the Syracuse office, currently located at 325 James St.

Crawford projects BHG’s sales “… to be well north of $150 million in 2012.” The company currently employs 126 and projects adding another 8 to 10 workers this year. BHG typically makes loans in a $20,000 to $200,000 range with terms up to 10 years, repackages the loans, and sells most of them to a group of 400 community banks, while retaining an in-house portfolio of $15 million to $20 million.

Crawford cites BHG’s business model as a major reason for the company’s success. BHG focuses only on loans needed by doctors, dentists, and veterinarians to run their businesses: working capital, debt consolidation, and equipment financing.

The company makes the process easy and offers fast approval. “We’re like FedEx,” says Crawford. “We offer different rates and delivery times depending upon the level of service requested.” BHG can turn around a loan request in 24 to 48 hours and typically deliver the money in five days. In return, the client offers a personal guarantee but pledges no assets. There are no up-front fees and the loans, which are classified commercial, do not appear on the borrower’s personal credit report. BHG offers service and speed because the firm has developed a detailed credit composite of its clientele, whose annual income averages $345,000 and 10 years in business, and because it uses its own funds for lending.

Crawford, 50, cites a second reason for BHG’s explosive growth — “… the staff, headed by a dynamic management team.” Crawford, as chairman and CEO, has a quarter-century of experience in coordinating loan/lease sales and financing between community banks and companies. A 1984 graduate of Gettysburg College, he holds licenses as both a commodities broker and a stockbroker and is the sole owner and president of another company, A.C. Crawford Futures, Ltd.

Robert T. Castro, 45, serves as BHG’s president and is responsible for loan origination and sales. Before BHG, he was president of Finance Team of America (FTA), a commercial-finance institution located in Florida from 1993 until 2001.

Eric R. Castro, 44, holds the office of COO at BHG, overseeing operations at the corporate office in Florida and managing the underwriting of the medical-loan portfolio. Eric Castro previously served as FTA’s vice president, COO, and senior credit officer. Under the leadership of the Castros, FTA facilitated and underwrote about $350 million in commercial financing and became the primary origination source for four national leasing companies.

The BHG management team also includes Edmund S. Durant as CFO, Chris Cali as general counsel, Chris Panebianco as the vice president of marketing, and Michelle Crawford as the senior vice president of placement and human resources.

Crawford and the Castro brothers are the only BHG stockholders, each owning a third.

Continued growth in BHG is not only coming from the traditional loan portfolio but also from new marketing directions. The company recently established a joint venture with a community bank in Scranton, Pa. — Landmark Community Bank — offering a credit card through BHG’s Business Healthcare Group, LLC. The program markets the credit cards to its existing clients and to medical professionals who have elected not to take out a loan from BHG. Landmark owns 50.1 percent of the venture, with BHG owning the remaining 49.9 percent. The firm markets the cards in all 50 states.

BHG also set up the Fund-Ex program 18 months ago to offer loans to those clients seeking funds up to $5 million at lower interest rates than those offered by direct BHG loans. These loans, with interest rates as low as 6 percent and terms out to 25 years, qualify for the Small Business Administration’s (SBA) 7(A) loan program, which guarantees most of the proceeds for the purchase of land and buildings, equipment, new construction, the purchase of existing businesses, and for similar expenditures.

Since BHG is not an SBA–approved lender, it originates and places the loans with banks such as Oneida Savings Bank, Beacon Federal, Generations Bank (formerly called Seneca Falls Savings), and Adirondack Bank. Fund-Ex generated $30 million in 2011, and Crawford projects “… revenues in 2012 of at least $50 million.” Crawford goes on to say, “we have done no marketing yet of Fund-Ex but already receive 650 applications each month.” Fund-Ex currently employs 14.

Crawford and the Castro brothers also own a company called BHG Commercial Credit, which is not affiliated with the health-care field. The company handles invoice factoring, international-trade finance, and other non-health-care activities. BHG Commercial Credit works with exporters with the requirement that all transactions be part of a government-backed program. While current revenues for this company are under $1 million, the three stockholders are focusing their attention on the growth potential

Syracuse move/expansion

Crawford anticipates rapid continued growth, especially in the credit card and Fund-Ex programs. To deal with the growth, BHG recently bought property on Solar Street in Syracuse’s Franklin Square area and retained Parsons–McKenna Construction Co. to tear down an existing structure on the property. Bids for a new 19,000-square-foot, one-story building with mezzanine are expected soon with occupancy anticipated in the first half of 2013. The new structure will initially house about 55 employees, with plenty of room for additional staff. Crawford says the decision to expand in Syracuse “… is based on the fact that expansion in Florida would cost four times the cost of expanding in Syracuse.”

On May 15, the Syracuse Industrial Development Agency approved tax exemptions related to the project that will save BHG nearly $95,000 on sales taxes on construction materials, furnishings and fixtures, as well as mortgage-recording taxes, according to a story on Syracuse.com.

Bright future

With $44 million in reserves, $61 million in assets, and no debt on the balance sheet, BHG plans to grow aggressively. “The future looks good,” says Crawford, “with plenty of [medical] professionals who still want their own practice and with the demand for expanding rural hospitals.” Michelle Crawford says the company has “… no trouble attracting phenomenal, young talent,” especially with the number of colleges and universities in the area. Finding experienced employees is more of challenge and requires a national search.

BHG has been nominated in 2012 by Ernst & Young for the accounting firm’s “Entrepreneur of the Year” award.

Busy summer construction season set for SUNY Oswego

Construction, Design & Real Estate, Health Care, Subscriber Only

OSWEGO — The State University of New York (SUNY) Oswego will be humming with construction activity this summer as the school nears the end of a $300 million expansion plan that began in 2008. This summer, a $17.2 million project will begin that will connect Oswego’s two School of Education buildings. The university’s Park Hall,

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OSWEGO — The State University of New York (SUNY) Oswego will be humming with construction activity this summer as the school nears the end of a $300 million expansion plan that began in 2008.

This summer, a $17.2 million project will begin that will connect Oswego’s two School of Education buildings. The university’s Park Hall, the second oldest building on campus, will also be renovated as part of that project.

New construction linking the School of Education’s Park and Wilber halls will provide a new main entrance for the school. It will feature a three-story atrium, common-area seating, and a lounge.

Bergmann Associates of Rochester designed the structure. It will improve the flow between the buildings, previously connected by a skyway, according to SUNY Oswego.

The work on Park Hall will include a complete overhaul. The building will get a new roof, mechanical systems, sprinkler system, and windows.

New facilities like a webinar room and computer lab will also be added. New classrooms and offices are on tap as well. Park Hall opened in 1932, just 19 years after the campus’s first building, Sheldon Hall.

The work at Park Hall overlaps with the completion of a 13,700-square-foot, $5.8 million addition to Wilber Hall that will house new laboratories for technology education and the School of Education’s field placement office. That addition will open in August.

PAC & Associates, Inc. of Oswego, already general contractor for some other projects on campus, will also handle the School of
Education project.

In addition, work continues on one of the biggest pieces of SUNY Oswego’s development plan, a $118 million project involving renovation to the campus’ Piez Hall and a 150,000-square-foot addition that will house the university’s sciences and mathematics programs. The building remains on track for opening in the fall of 2013, says Thomas Simmonds, associate vice president for facilities at the university.

Work is also under way on a $10 million project to improve the exterior of Sheldon Hall. New windows, brickwork, and replacement of terra cotta molding are planned for the summer, according to SUNY Oswego.

Roofing and improvement of the front entrance will also take place in the coming months.

The work ongoing now is the culmination of years of planning, Simmonds says.

About $200 million in funding for the projects came from the state. The remainder, which went to earlier work on residential buildings, came from residence-hall fees, Simmonds says.

The school is also planning to replace its Rice Creek Field Station with a new structure. The former station, a 1960s-era wood structure will be replaced in a $5 million project, Simmonds says. The station is used for biological sciences research and teaching.

SUNY Oswego is also renovating Romney Field House, the former site of its ice-hockey arena in a $2 million project. The hockey facilities moved to a new location in 2006 and the old field house will receive a new four-lane running track, a multipurpose field, and new heating and lighting.

Once the current expansion plan wraps up in 2013, there is still more to do, Simmonds says. Campus leaders are already planning projects including a new home for its School of Communications Media and the Arts and a new regional information resource center that would involve Oswego’s Penfield Library.

American Granby seeks growth in Canada

Manufacturing & Engineering, Regional News, Subscriber Only

CLAY — American Granby Inc. has a new pipeline into Canada. It’s a line laid on March 20, when American Granby owner John Lowe acquired a group of five Canadian companies based in Burnaby, British Columbia, near Vancouver. The Canadian firms will give American Granby, a Clay–based distributor, access to an enlarged distribution network north

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CLAY — American Granby Inc. has a new pipeline into Canada.

It’s a line laid on March 20, when American Granby owner John Lowe acquired a group of five Canadian companies based in Burnaby, British Columbia, near Vancouver. The Canadian firms will give American Granby, a Clay–based distributor, access to an enlarged distribution network north of the border.

Lowe will run the newly acquired firms separately from American Granby, as its sister companies. But the businesses have similarities, according to Gary Palley, American Granby’s vice president of sales and marketing.

“The product portfolios are close,” he says. “We do differ because our direction and the markets we serve are different.”

American Granby distributes pump, well, pool, spa, irrigation, plumbing, and heating components. The Canadian companies manufacture and distribute products for use in plumbing systems as well as heating, ventilation, and air-conditioning systems.

Their main member is CB Supplies Ltd., which handles distribution in Canada. Other members are Seymour Industries Ltd., the group’s U.S. distribution arm, Vanguard Pipe and Fittings Ltd., a plastic piping manufacturer, Canfit Industries Ltd., which makes plastic fittings, and Canip Industries Ltd., a producer of metal nipples — pipes with threading on both ends.

Palley declined to disclose the financial terms of the companies’ acquisition. The acquired firms’ former owners decided to sell primarily because they were growing older, he says.

American Granby will use CB Supplies’ distribution network in Canada to expand its sales in that country, according to Palley. In addition to its headquarters in British Columbia, CB Supplies has warehouse space in Calgary, Alberta, in Montreal, and in Mississauga, Ontario, near Toronto, he says.

American Granby’s only current Canadian distribution location is a small warehouse operation in Toronto, Palley says. That warehouse, which has about five employees, will merge with the Mississauga warehouse, he says.

“What it basically allows for is movement from one distribution center to four,” Palley says. “We’ll make American Granby products available through the entire CB Supplies network.”

Plans for distributing the Canadian companies’ products in the United States are not as firm. Their U.S. distribution arm, Seymour Industries, does not have a physical presence in the country, Palley says. Instead, it coordinates distribution through sales and stocking representatives and ships directly to wholesalers, he says.

Seymour Industries could be merged into American Granby, according to Palley. But no discussions about a merger have taken place yet, he says.

“It’s all in the works right now in terms of making those decisions,” he says. “Within the next six to 12 months, a lot of these decisions will be made.”

Local plans

Palley doesn’t anticipate American Granby moving from its current headquarters at 7652 Morgan Road in Clay. That building, which the company owns, is about 100,000 square feet.

He also does not believe there will be any changes in American Granby’s staffing levels. The company employs 45 workers at its headquarters and has seven people on the road in sales.

“I doubt seriously you’ll see any head-count change in the United States,” Palley says. “We can handle more with the existing personnel that we have. We’ve made a commitment to the [Clay] location.”

Palley declined to disclose revenue totals for American Granby. He projects revenue growth between 5 percent and 7 percent in 2012, up from growth between 3 percent and 4 percent in 2011.

However, the 2012 growth projections do not take into account distribution opportunities coming from American Granby’s new sister companies. The firm does not yet have projections that include the potential for increased Canadian distribution, Palley says.

About 80 percent of American Granby’s sales are in the United States, he says. The remaining 20 percent are in Canada.

CB Supplies has a similar sales ratio — except most of its sales are in Canada, according to Warren Lowe, the firm’s vice president of corporate development. About 80 percent of CB Supplies’ sales are in Canada, and 20 percent are in the United States, says Warren Lowe, who is also John Lowe’s son.

The five recently acquired Canadian companies employ a total of about 100 people, Warren Lowe says. He declined to share revenue totals or growth projections for the firms.

But he did say that he expects CB Supplies’ U.S. sales to grow while American Granby’s Canadian sales expand.

“We think they will be able to sell to each other’s customers and distribute each other’s products,” Warren Lowe says. “Between American Granby and CB Supplies, we have some of the same customers. We’re just excited about the opportunity to be able to grow on both sides of the border.”

John Lowe also owns Monarch-McLaren, Ltd., based in Elkhorn, Wis. That firm manufactures industrial leather

seals.

Currier Plastics ready to start expansion in Auburn

Construction, Design & Real Estate, Manufacturing & Engineering, Subscriber Only

Plans to add 50 new jobs over three years AUBURN — Currier Plastics, Inc. is moving forward on a 55,000-square-foot expansion project that was in limbo at the end of last year. The project is nearing a groundbreaking after Empire State Development awarded the Auburn manufacturer a $750,000 Economic Transformation Grant — a grant

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Plans to add 50 new jobs over three years

AUBURN — Currier Plastics, Inc. is moving forward on a 55,000-square-foot expansion project that was in limbo at the end of last year.

The project is nearing a groundbreaking after Empire State Development awarded the Auburn manufacturer a $750,000 Economic Transformation Grant — a grant plugging a funding gap left last year by New York’s Regional Economic Development Council initiative.

In November, the Central New York Regional Economic Development Council recommended the state give Currier Plastics a $750,000 capital grant. But that grant was not included when New York announced regional council funding Dec. 8.

“Everybody kind of agreed that they wanted to nail down what New York State could do,” says John Currier, president and majority owner of Currier Plastics. “It’s difficult to bring this project together at one time.”

The expansion project, which has a total price tag of about $21 million, will nearly double the size of the headquarters Currier Plastics owns at 101 Columbus St. in Auburn. The facility, which is currently 65,000 square feet, will grow to 120,000 square feet after work is finished. Nearly all of the new space will be dedicated to manufacturing, Currier says.

Currier Plastics, which specializes in custom designs, injection molding, and extrusion blow molding, will acquire 9 acres of adjacent land to make way for the new construction. It also plans infrastructure improvements, including new water lines, roadways, parking, and traffic patterns.

“It’s a big logistical improvement for us,” Currier says. “Right now we have trucks and passenger cars coming in the same entrance.”

The new building and infrastructure will cost about $8 million, he says. Crews could break ground by the end of the spring, and
Currier Plastics would like the structure to be complete by Nov. 1.

Construction and infrastructure improvements are only part of Currier Plastics’ planned improvements. The company will also invest about $13 million in new equipment over five years.

The manufacturer will use the $750,000 state grant to help pay for the project, along with private financing from First Niagara Bank. It is also in line to receive $1 million in Excelsior Jobs Program tax credits through the Regional Economic Development Council initiative.

That’s because Currier Plastics expects to hire more workers as a result of the expansion. The company currently employs 100 people full time and 20 temporary workers. It plans to add 50 more full-time employees over the course of three years, according to Currier.

“We’re pretty maxed out right now,” he says. “Our guys have done a really good job of finding new work, securing it, and, most importantly, doing a lot of growth with our existing customers.”

The Currier Plastics project may also receive some funding through the city of Auburn. In addition to working on a local incentive package, the city applied for $1 million in Economic Transformation Program funding from the state to put toward the project. Currier Plastics does not yet know if it will receive that funding, Currier says.

“We’re working with the city right now,” he says. “We are holding out hope for that.”

The manufacturer has not yet selected a general contractor or architect for the expansion project. It is currently bidding the
project, Currier says.

Currier Plastics generated $24 million in revenue in 2011, up 17 percent from the prior year, Currier says. The company is predicting 15 percent revenue growth in 2012, a rate it is on pace to meet through the first quarter of the year, he adds.

Before receiving the latest $750,000 in state funding, Currier Plastics looked at potential relocation sites in Central New York and in other states. The company also purchased new equipment for its Auburn headquarters to keep up with demand.

In April, it spent $1.75 million to purchase three extrusion blow-molding machines. Currier Plastics used its own cash and financing from First Niagara to pay for that equipment.

John Currier is the son of Raymond Currier, who founded the manufacturer in 1982.

New York manufacturing conditions improve in May

Manufacturing & Engineering, Subscriber Only

Business activity on New York’s factory floors picked up in May, according to a monthly survey from the Federal Reserve Bank of New York. The general business conditions index in the New York Fed’s May Empire State Manufacturing Survey jumped 10.5 points to 17.1. That indicates manufacturing activity expanded at a “moderate” pace, according to

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Business activity on New York’s factory floors picked up in May, according to a monthly survey from the Federal Reserve Bank of New York.

The general business conditions index in the New York Fed’s May Empire State Manufacturing Survey jumped 10.5 points to 17.1. That indicates manufacturing activity expanded at a “moderate” pace, according to the New York Fed.

It also means the index has largely rebounded from a drop last month. The index skidded 13.3 points in April.

May’s survey results show that 40.5 percent of manufacturers reported improving general business conditions. Another 23.4 percent said conditions worsened, and 36.1 percent indicated conditions remained the same as last month.

“Most companies are doing very well,” says Robert Trachtenberg, the president and CEO of the Central New York Technology Development Organization (TDO), a not-for-profit consulting and training organization that focuses on helping manufacturing and technology companies.

“They’re exceeding previous performance,” Trachtenberg says. “It’s not the current business conditions that are concerning them.”

New orders picked up speed, with the survey’s new-orders index climbing 1.8 points to 8.3. And shipments spiked, as the shipments index sailed up 17.7 points to 24.1.

The unfilled orders index rose slightly, increasing 2.4 points to -4.8. The negative result shows that more manufacturers had a lower number of unfilled orders in May than had higher unfilled orders.

Delivery times fell, according to the delivery-time index, which dropped 4.8 points to 0. Inventories grew, as reflected by the inventories index increasing 3.6 points to 4.8.

Manufacturers continued to report increases in the prices they pay and the prices they receive. However, both the prices-paid index and prices-received index dropped in May, showing that the rate of price hikes slowed.

The prices-paid index dipped 8.4 points to 37.4. The prices-received index slid 7.2 points to 12.1.

Hiring stepped up slightly, according to the number-of-employees index. It rose 1.2 points to 20.5 in May. Employees also worked slightly longer hours than last month, as May’s average employee-workweek index moved up just over 6 points to 12.1.

Future expectations

Manufacturers slowed their production of optimism for the future, according to the survey’s forward-looking indicators, which measure expectations for a time six months into the future.

The survey’s future general business conditions index tumbled 13.9 points to 29.3. Even so, more respondents expected improved business conditions in six months — 47.6 percent — than anticipated worse conditions — 18.3 percent. The remaining 34.1 percent of survey respondents predicted conditions will be about the same as they are now.

Manufacturers also pulled back on predictions for higher orders and shipments. The future new-orders index skidded 15.7 points to 30.1. The future shipments index sank 19.3 points to 25.3.

The future unfilled-orders index eroded 9.6 points to 0, and the future delivery-time index crept up 1.2 points to 2.4. The future inventories index plunged into negative territory, losing 15.7 points to -10.8, showing that manufacturers predict lower inventories in six months.

Prices will still be climbing in six months, according to the survey. The future prices-paid index rose 7.2 points to 57.8, while the future prices-received index registered 22.9, unchanged from last month.

Survey respondents predicted increased hiring in six months, but cut back on their projected staffing increases from previous survey results. The future number-of-employees index shed 15.7 points to 12.1. Meanwhile, the future average employee-workweek index dipped 2.4 points to 8.4.

Staffing is becoming more difficult for manufacturers, according to Trachtenberg.

“The skills available and the skills required just don’t seem to match each other,” he says. “Getting unskilled workers is not a problem at all. But getting math skills and engineering skills is getting very competitive.”

Planned capital expenditures took a hit as well. The future capital-expenditures index descended 12.1 points to 19.3. And the future technology-spending index declined 6 points to 12.1.

“That has to do with the uncertainty of the economy,” Trachtenberg says. “A lot of companies right now are doing well, but they’re nervous about the future, so they’re holding back on some of their high-tech investments.”

Year-to-year price changes

This month, the New York Fed asked survey respondents to compare prices on a yearly basis.

Manufacturers reported that the prices they pay have increased by an average of 3.6 percent in the last 12 months. That’s lower than the increases they reported in May 2011, when they said prices had climbed an average of 8.1 percent in the previous 12 months.

Prices will likely continue to rise at the same rate in the next year, according to the survey. Manufacturers predicted the prices they pay will rise an average of 3.5 points in the next 12 months — down from an average 5.6 percent increase they predicted in May 2011.

Selling prices haven’t gone up as quickly, manufacturers said. They reported their average selling prices have increased by an average of 1.7 percent over the last 12 months, down from a 1.9 percent average reported in May of last year.

Manufacturers also said they expect their selling prices to jump 2.1 percent, on average, in the next 12 months. That’s lower than the predictions they made in May 2011, when they said their prices would probably rise 3.6 percent.

The New York Fed polls a set pool of about 200 New York manufacturing executives for the monthly survey. About 100 executives typically respond, and the Fed seasonally adjusts data.

Going for the Gold

Business Mentors, Subscriber Only

What do these things have in common? Social Security. Disability. Windmills. Food stamps. A state’s low taxes. Big contributions to politicians. These are linked by a basic ingredient of our nature. We go for the gold. What prompted this thought was the number of Americans who recently signed up for Social Security disability payments. As

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What do these things have in common? Social Security. Disability. Windmills. Food stamps. A state’s low taxes. Big contributions to politicians.

These are linked by a basic ingredient of our nature. We go for the gold.

What prompted this thought was the number of Americans who recently signed up for Social Security disability payments. As people lost jobs in this lousy economy, millions more became disabled — disabled enough to claim Social Security should send them checks every month. Within a few years, “we the people,” became “we the afflicted.” By the millions we did. Our backs acted up. Migraines felled us. Shoulders froze.

Of course, a big percentage of us did not suddenly become disabled. Out of work, millions simply saw the gold and went for it. Millions more than before.

This is why outrageous percentages of firemen and police retire disabled. In cities and states where their contracts allow generous early retirements, we see huge numbers retire early. With bad backs, migraines, etc. Too many simply smell the gold. And they go for it.

This is why green ventures popped up like mushrooms in manure in this country. The government held out billions in loans and grants for green projects. Guys who planned to put their money into hotels switched to solar-panel ventures. And windmills. What the hell, they figured. If government wants to give us a few hundred million dollars, let’s go for it.

This explains why so many of these ventures crashed and so few thrived. Basically, they did not fire up the venture for the money in the marketplace. They did so for the gold offered by the government.

Studies tell us most food stamps are undeserved. You don’t have to be a wizard economist to know food stamps go to millions who need them. And to millions who do not. The latter sell them for cash for drugs and booze. They use food stamps for a few necessities. So they can then afford the highly nutritious necessities like cheese puffs and ice cream.

The lust for gold explains why states with high taxes lose people and businesses to states with low taxes. People work hard for their money. They want to keep more of it. Low-tax states offer them the chance to keep more. So they go for it.

You know big hitters give big money to big politicians. Do you suppose this is out of the goodness of their hearts? Do you suppose their generosity springs from a belief in the goodness of the candidates? Nah. They want something. They want laws that favor their businesses. They want contracts. They want loans and grants. It is no accident that most of the green loans of the last few years went to guys who contributed big time to the president’s last campaign. When they contributed, these birds knew what they were doing. They were going for the gold.

We go for more than just the gold. Many times, I have seen millionaires at conferences push and shove to collect free t-shirts. They demand extra bars of hotel soap to pop into their Gucci suitcases. The way they covet them, you would think they were bars of gold.

From Tom…as in Morgan.

Tom Morgan writes about financial and other subjects from his home near Oneonta, in addition to his radio shows and new TV show. For more information about him, visit his website at www.tomasinmorgan.com

Tax Filing Follow-Through

Business Mentors, Subscriber Only

At the risk of sounding like a CPA, I advise you not to fall into the trap of complacency now that the April tax deadline is behind you. Your attention is still needed. Whether you are looking to next year, or still gathering data from the past year, there are important points to consider. Filing your

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At the risk of sounding like a CPA, I advise you not to fall into the trap of complacency now that the April tax deadline is behind you. Your attention is still needed.

Whether you are looking to next year, or still gathering data from the past year, there are important points to consider. Filing your tax return is a complex business and you should make every effort to take all the deductions to which you are entitled, but remember that documentation is absolutely essential to upholding those deductions should your return be reviewed by a taxing authority.

The IRS is highly focused on preventing fraud, which is on the rise, and has implemented several methods to weed out the bad apples. IRS computers detect potential fraud by comparing many items in each return to certain “standards.” If your data falls outside of the parameters, it increases your chances of being audited.

The “red flags” are what one might expect — self-employed workers filing Schedule C, artificially low salaries, unreported income, and exceedingly high charitable-contribution deductions, high levels of income, and home-office deductions are tops on the list. Some taxpayers have been said to be banking on the idea that a smaller budget and fewer employees at the IRS would result in fewer audits this year.

To a quality-minded CPA, this sounds a bit like roulette, and not a great overall approach.

I can’t help but think that a smaller number of audits means a drop in federal revenue, and fewer IRS employees translates into less help for taxpayers seeking assistance. And what about controlling identity theft and complex changes in tax law? Doesn’t it stand to reason that if all the non-filers and dishonest filers paid their dues, perhaps tax rates could be lowered for everyone?

If you have already completed filing your return and believe there was an error, you could file an amended return to reflect the correction and stop the clock running on certain additional charges. If you are one of the procrastinators or have a complex tax situation that needs to be attended to, do so now. By waiting to pay tax balances due, additional charges for interest and penalties can add up quickly.

If you’re flirting with the idea of not turning in your taxes at all, you may want to think again before using what the IRS considers to be “frivolous” tax-evasion arguments, like claiming that tax forms are an invasion of your privacy or that your state isn’t technically part of the United States. The IRS does not find these amusing, and you could end up going to court and being slapped with significant penalties.

Want my advice? Buckle down and get the filing beast behind you to ensure you have covered all your bases from a deductions perspective and that all income is properly reported to your CPA.

Gail Kinsella is a partner in the accounting firm of Testone, Marshall & Discenza, LLP, and serves as the president of the New York State Society of Certified Public Accountants. Contact Kinsella at gkinsella@tmdcpas.com

Seminar: Uncertainty remains regarding health-care reform

Employee Benefits & Human Resources, Health Care, Law, Accounting & Taxes, Subscriber Only

Employers have plenty of changes to keep track of this year due to the 2010 federal health-care reform law, even though it faces an uncertain future, according to speakers at a health-care seminar May 11 in Syracuse. “Two years into it, we’re still left with a lot of uncertainty and a lot of court challenges,”

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“Two years into it, we’re still left with a lot of uncertainty and a lot of court challenges,” says Maureen Pelose, vice president for employee benefits at insurance brokerage firm Brown & Brown Empire State. “It’s going to be a challenge for health plans and employers.”

Brown & Brown Empire State, which has its Syracuse office in Suite 200 at 500 Plum St., held the seminar at the Genesee Grande Hotel at 1060 E. Genesee St. in Syracuse. About 90 people attended the seminar, which was titled, “Health Care Reform — What it Means to You and Your Business.”

The federal reform law faces an uncertain future, as the U.S. Supreme Court heard arguments on its constitutionality in March. The court is expected to issue a decision in June that will either keep the law in place, invalidate parts of it, or throw out all of it.

Elections in 2012 add another layer of uncertainty to the law’s future — Republicans have signaled they want to unravel at least part of the reform package if they win more power in Washington, D.C. this fall, Pelose said.

Even so, Pelose briefed employers on issues that are arising as the law’s reforms roll out. One of those changes has to do with the W-2 forms employers issue to their workers. Forms that large employers distribute for 2012 will have to include the aggregate cost of most employer-sponsored health benefits.

“This only applies if you’re filing a W-2 for 250 of your employees,” Pelose said. “If you’re under that amount, you’re excused from that filing for the 2012 deadline.”

Employers should also know about Summary of Benefits and Coverage (SBC) documents, Pelose said. Insurers have to start providing SBCs, which present information about insurance plans in a standard format, for employees in new and renewing plans starting Sept. 23.

Some tax changes are on the way as well, Pelose said. Starting in 2013, the Medicare hospital-insurance payroll tax for employees is slated to rise for single taxpayers with wages exceeding $200,000 and married taxpayers with wages over $250,000. The rate is currently 2.9 percent, and the new tax will tack on an additional 0.9 percent.

Fully insured and self-funded plans ending after Sept. 30, 2012, will also be subject to a premium tax, according to Brown & Brown. That tax is $1 per covered life for the first year and jumps to $2 per covered life for later years.

Additionally, Pelose mentioned an excise tax on high-value “Cadillac” health plans that is scheduled to take effect in 2018. The tax, which will be 40 percent, is supposed to kick in on single plans with an aggregate value over $10,200 and family plans with an aggregate value of more than $27,500.

Although few plans have that value today, price increases could make the “Cadillac” tax a possibility for more plans by the time it takes effect, Pelose said.

“It’s not something that we should just brush off,” she said. “We’re watching it.”

Looking further ahead, 2014 will bring an employer mandate requiring companies with more than 50 full-time workers to offer health insurance or risk paying a penalty, Pelose added. The penalty, which is $2,000 per full-time employee per year, will be levied if an employee who wasn’t offered health insurance through work purchases insurance on New York State’s planned individual health-insurance exchange — and that employee is eligible for an income-based premium credit.

The insurance exchange is another part of the health-care reform package that should be on employers’ minds, Pelose said. In addition to an exchange where individuals can purchase insurance, there will be an exchange that is a place for small businesses to shop for coverage for their employees, she said.

The exchanges will be web-based, according to Todd Muscatello, senior vice president of Rochester–based Excellus BlueCross BlueShield, who also spoke at the seminar.

“Has everyone used Expedia?” he said. “At its highest level, that’s what an exchange is. It’s a website where you will be able to go as an individual or a small employer and compare health-insurance options.”

The exchange will likely increase the number of health insurers a small business must interact with, Muscatello said. That’s because employers who use exchanges to offer their workers insurance won’t select a specific insurer. Instead, they will pick a benefit level and employees will be able to log on to the exchange and choose between insurance companies offering plans at that level, he said.

“In today’s world, as a small employer, you likely offer only one product, maybe two, but usually with the same company,” Muscatello said. “In tomorrow’s world, that would likely not be the case.”

Muscatello recommended staying tuned as New York constructs its health exchange. The state is only starting to build the exchange, since Gov. Andrew Cuomo ordered its implementation in April, he added.

“We’re still a little bit away from understanding how this is really going to work,” Muscatello said. “As you go forward, the best you can do is stay abreast of it. It’s going to impact you in some way.”

Brown & Brown Empire State is a full-service insurance brokerage firm that also specializes in employee benefits, estate planning, and surety bonding. In addition to Syracuse, it also has offices in Endicott and Clifton Park. It is a unit of Brown & Brown, Inc. (NYSE: BRO), headquartered in Florida.

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