On Heels of Authorities Budget Office Report, Evidence Grows for Need to Rein In IDAs, LDCs, Public Authorities
New York, NY—The Getting Our Money’s Worth Coalition released a new analysis of Industrial Development Agency (IDA) data today, which shows widespread failure of New York’s main economic development tool to meet job creation goals. Highlights of the analysis include:
- $182 million in IDA tax breaks went to companies that cut jobs, failed to create jobs, or didn’t promise to create any jobs.
- Over one-half of all projects that ended in 2010 failed to create a single job. Businesses that originally promised to create a total of 7,865 jobs instead lost 7,896 jobs.
- IDAs continue to maintain high spending while state and local budgets are slashed, spending $483 million in 2010.
- Local governments are increasingly picking up the tab for corporate tax exemptions, losing $426 million in tax revenue in 2010, including $200 million lost to local school boards.
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.
“The trends we see with the latest numbers are troubling,” said Allison Duwe, Executive Director of the Buffalo-based Coalition for Economic Justice. “While state and local budgets are being cut and public services reduced, backdoor spending of public dollars by development agencies continues to rise.”
New York’s IDAs provide tax subsidies to companies in exchange for creating or retaining jobs. While total tax exemptions have been increasing steadily each year, job creation has declined. An analysis of completed projects, many of which have been subsidized for 15 or 20 years, showed that a majority fail to create any jobs, let alone good jobs.
“All over the state, we see examples of IDAs that are funneling money to companies that are not meeting their job creation promises,” said Charlene Obernauer, Executive Director of Long Island Jobs with Justice. “We need reforms that prioritize performance and create good jobs, not just corporate giveaways.”
The criticism comes on the heels of a report released last week by the New York State Authorities Budget Office, the government agency responsible for overseeing public authorities. The ABO report contained several recommendations to reform IDAs and other public authorities charged with job creation. The agency also “calls on the Governor and the Legislature to begin a comprehensive discussion on the future of the state’s network of public authorities and whether local governments and state taxpayers can continue to support its size and cost.”
“Every state lawmaker needs to understand the vast amount of money that’s currently wasted by New York’s economic development agencies,” stated Matt Ryan, Executive Director of ALIGN. “We need greater transparency to see what’s not working, so we can redirect money to more effective job creation efforts and community needs.”
To download Key Facts about IDAs, visit https://alignny.org/wp-content/uploads/2012/07/2012-Key-Facts.pdf
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