Largest Putnam Business Grows, But Regulations, Taxes Cause for Concern

By Michael Gold 

Mike Endico’s business, Ace Endico, is expanding, which is cause for celebration.

The food distribution business, the largest private employer in Putnam County, is adding 60,000 square feet to its 200,000-square-foot Brewster warehouse. The job will be finished by the end of the year.

But Endico is troubled by a new federal law that will go into effect in 2025. It’s called the Food Safety Modernization Act (FSMA), which was passed by Congress and signed into law under President Barack Obama in 2011.

The law has a noble intent – to help prevent people from getting sick as a result of food-borne diseases. About 48 million Americans get sick from food-related illnesses and 3,000 people die from them, according to the U.S. Food and Drug Administration.

But the cost of implementing the law concerns Endico.

“FSMA adds one dollar per case to the end user,” Endico explains. “I have a whole team working on it. It’s a bear,” he said.

A case is 12 pounds of sugar, 30 pounds of French Fries, 50 pounds of potatoes or 10 pounds of fresh fish.

In preparation to comply with the law, food manufacturers and distributors need to place tracking codes, or barcodes, on every case, so each product can be traced by the government to end users.

“We need to track products from the warehouse. We have to get a computer tracking system on trucks,” Endico explained. “We’re building databases and buying scanners to comply with the act. We’re buying 200 scanners. We have to write software for compliance.”

“It’s just raising prices. It’s overreaching. I think it’s overbearing,” Endico added. “It will hit the consumer in the end.”

Endico estimated that the FSMA will increase consumer prices by almost 3 percent in 2025, when the law is scheduled to go into effect, “if it doesn’t get reversed.”

On the state level, Endico said business is somewhat hobbled by new state minimum wage levels.

“We’d be more flexible in hiring for certain positions,” he said, without the new wage levels. “Some people don’t have the skill set to make the state minimum wage level for white collar workers.”

The state legislature passed a law raising the minimum wage each year. In Putnam County, the minimum wage is currently $14.20 per worker. Next year it will be $15, and $16.00 by 2026.

“The government seems to be setting artificial wage levels. They (the state) just get in the way. We pay all workers above the minimum wage,” Endico said.

The company employs 650 people and business has grown every year, except for 2020, Endico said, enjoying 5 to 10 percent annual growth.

Endico supplies produce, seafood, grocery products, dairy and meats to its food service customers, including Yankee Stadium, the New York Zoological Society, DeCicco’s Family Markets and Connecticut casinos as well as local restaurants.

Putnam County Executive Kevin Byrne sees high state taxes as a further hindrance to businesses operating in the county.

“New businesses are trying to start up and grow,” Byrne said. “We want businesses to grow and prosper. Sales taxes hurt lower-income residents.”

At 6.35 percent, neighboring Connecticut’s sales taxes are significantly lower. Sales tax in Putnam County is 8.38 percent. That combines county and state sales taxes.

“In New York, a lot of this is part of a culture that blames business instead of recognizing business as the engine of economic growth,” said Byrne, noting that 60 percent of the county’s workforce is employed by small businesses.

Also, state regulations, from distribution and sales of alcohol to auto body shop inspections, make it harder for companies to do business in Putnam County, Byrne pointed out.

“All the regulations cost them (companies) money. You’ve got to quantify what the cost is. It (regulations) can hinder economic growth,” he said.

In his 2024 budget presentation on Oct. 5, Byrne referred to The Tax Foundation’s 2023 State Business Tax Climate Index that ranks New York’s tax system 49^th overall. This year’s Rich States, Poor States, a report that ranks competitiveness between states, lists New York State dead last for economic outlook.

The Putnam County Legislature has approved the 2024 budget, which Byrne signed earlier this month.

The property tax rate for 2024 will be 2.85 percent, “the lowest in 15 years,” Christopher Formisano, Putnam County’s director of communications, wrote in an e-mail.

“The legislature has signed off on the sales tax exemption on clothing and footwear program for two years,” Formisano stated.

The county will participate in a state program to eliminate sales tax on clothing and footwear under $110.

“Our budget is reducing the overall tax burden, without taking on debt,” Byrne said.

Dr. Mark Hirko, Putnam Hospital’s president, made a counterpoint case for more government involvement, at least in the healthcare sector.

An aging population is forcing the hospital to reorganize its services to provide more outpatient care, he said.

The federal government reduced its FEMA/COVID but expenses keep climbing.

“There’s a crisis in mental health and suicide prevention and drug abuse and treatment and crisis intervention,” Hirko said.

“We’ve worked with New York State on mental health advocacy. New York State and the federal government have helped us a lot over the last years. We’re working with the county government, too. The county government is very helpful,” Hirko pointed out.

An e-mail from the hospital’s public and community affairs manager stated, “Dr. Hirko wanted to reiterate that as a hospital and health system we are appreciative of the financial support we have received from state and federal governments and look forward to continuing those partnerships.”