A mixed bag on IDA reform in Albany (Investigative Post)

J. Dale Shoemaker - Investigative Post

Originally published in Investigative Post on .
Senator Sean Ryan

The push to reform New York’s industrial development agencies gained significant momentum this year, but not enough to net a serious win for the coalition of labor unions, teachers and good government groups backing the effort.

Smaller measures, however, did make it over the finish line, including one expanding representation on IDA boards and another increasing transparency over agency projects.

“The momentum is building and we’re going to continue to build that momentum,” said state Sen. Sean Ryan of Buffalo. “But the community itself is building it.”

IDAs, of which there are 107 across the state’s counties, cities and towns, have the power to grant property, sales and mortgage tax breaks to companies in exchange for promised jobs and future tax revenue. 

Based on the size of a company’s project, IDA tax breaks can be negligible or total $100 million or more, as they did for Amazon’s 3-million-square-foot warehouse in the Town of Niagara ($124 million) and Plug Power’s hydrogen generation facility in Genesee County ($119 million).

The big push in Albany this year was for a bill, sponsored by Ryan, that would prevent IDAs from granting property tax breaks where the revenue would otherwise flow to a local school district. Those tax breaks account for about 60 percent of IDA abatements, according to the good government group Reinvent Albany. The bill would have “a huge effect on the IDAs because they can’t give away nearly as much money,” said Reinvent Albany Executive Director John Kaehny.

The bill failed to make it out of committee for a third year in a row. The proposal, however, gained powerful backers this year in the New York State United Teachers, AFL-CIO and other unions.

“All of the research is showing that [IDAs] overpromise and underperform in terms of actual job creation,” NYSUT president Melinda Person said at a February press conference in support of the bill. “That is what makes this doubly insulting — that we are not even getting the jobs we were promised on top of the impact and cuts to schools.”

The bill, Kaehny added, is “a huge threat to the way IDAs do business.” 

“The IDAs and the IDA industry, which includes their consultants, ferociously lobbied against it.”

That IDA industry includes the New York State Economic Development Council, a trade group that lobbies for IDAs, as well as law firms that write and process the tax break deals.

“Any time you try to change the IDAs you get a lot of stiff resistance, but we’re going to keep pushing,” Ryan told Investigative Post.

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