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Anyone who thinks taxes don't matter when it comes to attracting companies to Florida should chat with Douglas Gyure.
Gyure's company, S4J Manufacturing Services, makes special fittings used by more than 1,000 companies in the medical-device field to connect fluid- and gas-carrying tubes. Some of its customers include Fortune 500 companies, and the company makes about 1 million fittings a year.
Tucked away in an industrial park on the north side of Cape Coral, S4J is the kind of company that industry recruiters are eager to attract. The company manufactures custom parts and provides skilled “blue tech” jobs.
When New Jersey boosted taxes in 1990, Gyure's father, Steven Gyure, decided he'd had enough. “Our governor doubled the state income tax,” the younger Gyure recalls. “Dad said, 'I'm going away.' And he loves fishing.”
The lesson for politicians and economic development groups who want to attract high-paying jobs to Southwest Florida: The weather's nice, but low taxes matter a lot.
It's not just corporate taxes that affect corporate relocations. “When you're in a small business, you look at personal and business taxes,” says Gyure.
Florida's overall comparatively lower tax scheme made it easy to leave New Jersey. “It was far cheaper,” Gyure says.
When the elder Gyure decided to leave New Jersey, he didn't leave many employees behind. “All of our key people came,” says his son, who today manages the business. “We flew them down here to meet with a real estate agent.”
The younger Gyure, who had worked for S4J since he started sweeping the factory floor when he was 8 years old, says cell phones and the Internet make it easier to relocate companies today. “We could be anywhere in the world,” he says.
S4J is the kind of high-tech manufacturing that gives the U.S. an edge over the competition. Although it sells 250 standard items, many customers turn to S4J to create special one-of-a-kind parts. “Much of our work is custom,” says Gyure.
Gyure says he first saw the company's parts in action when his wife was in labor in the hospital. S4J connectors connected the blood-pressure monitor hoses to a machine, and Gyure jokes that he was as excited about seeing his products in the delivery room as he was about the birth of his child.
Gyure declines to share sales data, but he says growth has been flat in recent years because of the recession. A looming tax on medical manufacturers as part of Obamacare isn't encouraging, he says. “We have very little competition, but I don't feel like we can raise prices,” says Gyure.
S4J hasn't raised prices despite rising labor and material costs. Gyure says automation is the key to productivity improvements. The entire operation runs with 13 employees. “It's all in the automation and efficiency,” Gyure says, pointing to one machine he recently acquired for $300,000.
Video: Amanda Heisey
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