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By Rick Karlin

July 11, 2013

I had a piece last week on the state’s annual report about Public Authorities and now the Getting our Money’s Worth Coalition which includes taxpayers, small businesses and unions that have been critical of Industrial Development Agencies, has drilled down into data about IDAs and found what they say is a poor record of job creation. Industrial Development Agencies and their cousins Local Development Corps, generally are used as vehicles for tax breaks, with the idea that they’ll help create jobs.

They are technically, public authorities, and must issue fairly comprehensive reports to the state Authorities Budget Office.

Here is what the Coalition found:

The Getting Our Money’s Worth Coalition released a new analysis of the latest Industrial Development Agency (IDA) data today, which shows widespread failure of New York’s main local economic development tool to create jobs. Highlights of the analysis include:

• $162 million in IDA tax breaks went to companies that lost jobs, failed to create a single job, or never made any job creation promises.

• Over one-half of all projects that ended in 2011 failed to create a single job. 94 subsidy agreements that ended in 2011 lost jobs. These businesses originally agreed to create a total of 5,971 jobs. Instead, they lost 17,017 jobs. Of the 52,565 jobs agreed to be retained by projects ending in 2011, these projects lost 1,166 net jobs.

• IDAs have maintained high spending on net tax exemptions, spending $490 million in 2011, slightly more than they spent in 2010. Since reporting began in 2003, IDAs have spent a total of over $4 billion in net tax exemptions.

• Local governments are increasingly picking up the tab for corporate tax exemptions, losing $401 million in tax revenue in 2011, including $211 million lost to local schools.

Key Facts about IDAs is an annual analysis of statewide IDA data that has been produced since 2009 by the Getting Our Money’s Worth Coalition.

“Job creation programs should create jobs,” said Jennifer Diagostino, Executive Director of the Buffalo-based Coalition for Economic Justice. “In recent years, we have seen more economic development programs spring up—from LDCs to Regional Economic Development Councils to Start-Up NY—but very little has been done to make current programs more effective.”

New York’s IDAs provide tax subsidies to companies in exchange for creating or retaining jobs. Advocates pointed to the dismal track record of IDAs and called for additional disclosure of project data for other economic development programs.

“We have enough data to show that IDAs are failing, but they’re only one small part of the problem,” said Charlene Obernauer, Executive Director of Long Island Jobs with Justice. “New York spends approximately $7 billion a year on economic development subsidies, but few programs require job creation, clear reporting to monitor progress, or clawbacks to protect the public when companies fail to deliver.”

Earlier this year, the coalition released a report, the $7 Billion Wager: New York’s Costly Gamble in Economic Development, containing policy recommendations to increase the performance, accountability and transparency of New York’s major economic development programs. Some of those recommendations were echoed in a report released earlier this week by the New York State Authorities Budget Office (ABO), the government agency responsible for overseeing public authorities. For the first time, the ABO included an analysis of IDAs’ failing job performance in its annual report on state and local public authorities.

To read the full article visit The Albany Times Union.