New York and its local governments dole out $7 billion a year in tax breaks to businesses, but the money is unevenly dispersed and goes to a small number of businesses, a report Monday contended.
The report comes as Gov. Andrew Cuomo on Wednesday will announce the third round of economic-development grants for the state’s 10 regions. About $756 million will be awarded to the councils.
The findings Monday from ALIGN, a liberal, labor-backed group based in New York City, is the latest to knock the state’s massive system of providing tax breaks to businesses.
On Tuesday, a panel commissioned by Cuomo will unveil recommendations on how to address the state’s high taxes, focusing particularly on property taxes.
The ALIGN report claimed that the $7 billion in tax breaks go to just 4 percent of businesses in New York and can benefit major retailers. Target, for example, received tax breaks since 2001 to build stores in Monroe County and Mount Vernon.
“We need a New York that works for all of us, where big corporations are responsible for paying their fair share of taxes to support our schools, roads, public transit and the services that we all rely on,” said Tomás Garduño, political director of ALIGN, in a statement.
The group reported in May that New York spends $7 billion a year on business incentives, but the state doesn't adequately oversee how the money is spent.
Monday’s report focused on regional differences in spending, showing that New York City spent the most on tax breaks and Mohawk Valley and North Country spent the least.
The group was critical of industrial development agencies run by counties. The report claimed that 33 percent of the money spent in recent years didn’t produce jobs, equating it to about $2.3 billion a year in wasteful spending.
It claimed that IDAs in the Finger Lakes had the lowest failure rateat 52 percent, meaning that 52 percent of projects that ended in 2011 failed to provide jobs. Central New York IDAs had the highest failure rate at 85 percent.
Economic-development officials knocked the report, saying the data is outdated and doesn’t offer a true reflection of economic conditions.
For example, the report said that the Chemung County IDA funded three of the five projects with the greatest net job loss in the Southern Tier. But the report doesn’t say what those projects were.
George Miner, president of Southern Tier Economic Growth, said Sikorsky Aircraft Corp closed three facilities displacing more than 1,200 people last year. But the company is paying back IDA financing, and the company didn’t receive any local property-tax breaks.
Brian McMahon, executive director of the state Economic Development Council, said the report looked at projects that may have started before 1990.
“Any conclusions will be distorted and not reflective of current IDA activity,” said McMahon, whose group represents the IDAs.
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