Coalition disputes IDA tax breaks, cites COMIDA inaction
Buffalo, Rochester, New York, NY—More than a dozen elected officials, community, labor, and advocacy organizations sent a letter today to the Authorities Budget Office requesting an investigation of a tax break deal between the County of Monroe Industrial Development Agency (COMIDA) and Ward’s Natural Science, a division of VWR Educational LLC.
The advocates contacted the ABO, the state agency charged with IDA oversight, after COMIDA failed to act to rescind VWR’s tax breaks. Members of the Getting Our Money’s Worth coalition claim that VWR is engaged in job shifting, an activity that IDAs are prohibited from subsidizing.
Members of the coalition spoke out in public hearings at COMIDA in December and earlier this week, urging COMIDA to act in the best interests of taxpayers and end VWR’s tax breaks. COMIDA contends that VWR has met the job creation goals in its agreement to-date, and has not acknowledged the potentially illegal job shifting activity.
Allison Duwe, Executive Director of the Coalition for Economic Justice stated, “IDAs need to hold companies accountable, and when they don’t, we need strong oversight agencies capable of policing IDAs and taking action on behalf of the public.”…
In December 2011, a VWR facility in Erie County announced 41 layoffs after their subsidies, dating back to at least 1971, expired. VWR’s more recent tax breaks with COMIDA are in return for creating 7 new jobs, although they are consolidating their operations and shifting jobs from Erie to Monroe County. Under Municipal Law, IDAs are prohibited from financing projects that simply shift jobs from one part of the state to another. Although exceptions can be made, VWR did not make a case to COMIDA to be excluded from this rule.
“Companies should not be incentivized to slash jobs,” said Buffalo-area Assembly Member Sean Ryan. “Unfortunately, lax rules and a lack of coordination between job creation agencies are leading companies to game the system at the taxpayers’ expense.”
VWR has collected $800,000 in tax breaks so far from its 2001 and 2008 deals with COMIDA. Its 2008 deal requires that the company create seven jobs and maintain that employment level until 2019.
Advocates argued that COMIDA is setting the bar awfully low in granting large tax incentives in return for few jobs. They also expressed concern that the jobs COMIDA is subsidizing come at the expense of jobs in Erie County.
“We’re constantly told that there is not enough money to educate our children or strengthen our community’s infrastructure,” said Paula Hansen, President of Metro Justice. “We should crack down on wasteful corporate subsidies and reinvest these resources.”
After reviewing Freedom of Information Law requests from COMIDA, the coalition decided to pursue this case with the ABO and request further investigation. The letter suggests that the ABO could censure COMIDA, terminate COMIDA’s tax exemptions to VWR, or recapture forgone revenue for Erie and Monroe County taxpayers.
The Getting Our Money’s Worth Coalition is a broad coalition of public policy experts, government watchdogs, labor unions, community and religious organizations, and concerned small business owners, workers and taxpayers. The statewide coalition is anchored by ALIGN: The Alliance for a Greater New York and the Buffalo-based Coalition for Economic Justice