By Cara Matthews
July 12, 2011
ALBANY — Reporting requirements for New York's industrial development agencies are lacking and there is no apparent connection between higher tax exemptions and job growth, state Comptroller Thomas DiNapoli said in a report released Tuesday.
The report compares the total net tax exemptions given by the 115 IDAs that were operating in 2009 to the total job gains or losses by county. IDAs are independent public authorities that aim to attract and keep businesses by providing them with exemptions in property, sales and mortgage-recording taxes as well as low-interest bonds.
While there has been some improvement in the quality of IDA reports submitted to the state in recent years, the lack of complete job data makes it hard to evaluate whether the projects are meeting their goals, DiNapoli said.
"For four years, I've called on IDAs to improve the accuracy of the jobs data. Taxpayers should know if the projects they're paying for are creating the jobs that were promised," the comptroller said.
The IDAs operating in 2009 reported that they supported 4,577 projects and gave almost $500 million in net tax exemptions that year. The number of employees working for the projects totaled 724,390, with a cumulative gain over the life of the projects of 204,172 jobs, the report said. The average cost per job gained was $2,429, down from $3,300 the previous year.
In Rochester, Judy Seil, executive director of the County of Monroe Industrial Development Agency said she believes the agency has served the community well, creating about 10 times more jobs than expected by the end of 2009 at a cost of only $543 per job. The 402 projects backed by COMIDA were expected to create 2,396 jobs, but the net increase was 23,491, she said.
According to DiNapoli's report, COMIDA provided gross tax exemptions totaling $23.4 million. Businesses paid nearly $11 million in payments in lieu of taxes, for a net tax exemption of $12.8 million.
Without a tax break, a company might not locate or expand in New York, Seil said.
"The difficulty is you have to level the playing field for businesses in the community and the IDA is one way to do it," she said.
There is a lot of good news in DiNapoli's report, especially considering the ongoing economic slump, said Brian McMahon, executive director of the New York State Economic Development Council. The number of projects and jobs are up and exemptions are down.
"Those are all very good outcomes," he said.
However, The Alliance for a Greater New York, part of the Getting Our Money's Worth Coalition, said it was troubled by the report.
"With almost 90 percent of gross exemptions coming from local and school property taxes, we need to give our communities the necessary tools to monitor the effectiveness of subsidies and claw back much-needed revenue from corporations that fail to live up to their promises," said Matt Ryan, executive director of the alliance.
The comptroller's report recommends improving IDAs' effectiveness by publishing annual report cards with details of projects, establishing a uniform disclosure of employment data and rescinding benefits if development projects don't meet their goals.
DiNapoli criticized the number of IDAs and local economic development corporations, known as LDCs, saying the initiatives "are overlapping in nature and do not necessarily reflect the size, density or development needs of the state's communities." The state should strive for a "regional, coordinated approach," he said in the report.
Eleven counties have more than two IDAs, including Erie, which has six; Westchester, which has seven; and Steuben, which has three.
In 2009, there were 279 local economic development corporations that run revolving loan funds, including 19 in Monroe County, according to the report.
Read original article at: http://www.democratandchronicle.com/article/20110713/BUSINESS/107130311/IDA-reporting-called-lax
Also published in the Ithaca Journal, the Elmira Star Gazette, and the Binghamton Press & Sun Bulletin.