When Governor Andrew Cuomo proposed a series of reforms for the state’s industrial development agencies, IDA representatives and local elected officials protested. Cuomo essentially wanted to restrict the agencies’ ability to grant exemptions on state sales tax, but local officials said that would rob them of a useful economic development incentive.
Well, perhaps predictably, Cuomo’s proposal didn’t stick; lawmakers negotiated and passed a compromise reform package last week.
In his 2013 to 2014 budget proposal, the governor said that the state doesn’t currently have input when IDA’s award state sales tax exemptions. He proposed limiting the industries that could receive the exemptions: housing and retail would no longer have been eligible. He also wanted the regional economic development councils and the state economic development commissioner to sign off on the exemptions.
But the final legislation is quite different from that proposal: IDA’s will still be able to award state sales tax exemptions and no additional approvals will be required. The agencies will have some additional reporting requirements, but they won’t face much in the way of restrictions on which industries can receive tax benefits. Some analyses of the legislation say it prevents IDA’s from giving state sales tax exemptions to some retail projects.
IDA representatives and many local elected officials — though not all — are counting the outcome as a victory. But Brighton Supervisor Bill Moehle says he’s disappointed that the governor’s proposed reforms didn’t stick. Brighton officials have been critical of the Monroe County IDA in the past, saying it awards tax breaks to inappropriate projects.
“I like the idea of having the state oversight on the sales tax,” Moehle says.
This article appears in Apr 3-9, 2013.
I like the idea of state guidelines, but I like the idea of more community oversight and veto over these tax-break packages. The list of COMIDA board members is mostly business executives of varying fields, with a union member and a few lawyers. I’m not saying these people aren’t qualified or are evil or malicious, but it means that these tax breaks are being given out by a very narrow slice of the Rochester community. I would advocate for more community members, perhaps a rotating member from a neighborhood council, maybe a college professor, community advocates on issues like housing or poverty. We need to stop letting these tax breaks be given out by the business community, and deal with them holistically with the whole Rochester community in mind.
http://www.growmonroe.org/comida/about/boa…
When did we agree it is okay for non elected officials to raise our taxes. that is what IDA’s are doing. By giving tax exemptions to a few they are actually costing everyone else more. To continue to allow this to happen for some residential and retail projects is a travesty. The majority of the tax benefits given are landlords and they are not even creating permanent jobs! This actually is depressing investment, as rents are kept low and other small investors can not justify the investment.. But do not take my word for this there was a study by Metro Justice of COMIDA and this is what they found
• 63% (124 out of 196) of COMIDA projects hadn’t delivered the jobs that the businesses promised.
• Of the 196 projects with sufficient reporting data, 27% lost jobs (54 out of 196), reporting fewer current jobs than the employment level before IDA status was granted. An additional 5 projects had no change in employment. (It should be noted that COMIDA is not required to report how many projects had not “ripened,” meaning that there still could be time left to create the jobs. Once again, this points to the need for better reporting requirements).
• Only 52% of the projects that added jobs (72 out of 137) met or exceeded their job creation targets.
While the Governors suggestions were good they actually did not go far enough an the whole system need to be revamped so that actual creation of jobs through business start ups is the goal. Until then we continue to make us poorer so a few can legally defraud State and local governments of tax revenue.