State Senate investigating IDAs' compliance with oversight laws

James T. Madore for Newsday

April 04, 2019

Originally published in Newsday on April 04, 2019.

The State Senate is investigating whether industrial development agencies and other public authorities are complying with state oversight laws, officials said.

Thursday is the deadline for IDAs and others to submit documents to the Senate Investigations and Government Operations Committee showing they are adhering to annual reporting requirements of their activities, according to a committee letter.

The probe was begun by Sen. James Skoufis, the committee chairman, in response to the Orange County IDA's granting tax breaks last year to a beer distributor for an expansion project that was already underway and to two proposed hotels in a tourism hot spot.

IDAs “operate in most places in the state in complete secrecy,” said the Democrat from upstate Woodbury. “Taxpayers — if they knew what was going on — would be outraged. … There is very little accountability.”

The New York State Economic Development Council, a trade group that represents IDAs in Albany, "welcomes the opportunity to meet, speak and work with the senator, alongside our members, to address any concerns that he may have," council executive director Ryan M. Silva said Thursday. 

IDAs are run by appointed boards that operate independently of local governments. Their mission, under a 1969 state law, is to grow the economy by granting tax incentives to expanding businesses that retain and create jobs.

IDAs are regulated by the state comptroller and state Public Authorities Budget Office. The Senate committee is examining whether IDAs are submitting required information to the budget office, according to the letter.

Skoufis said the letter was sent to 60 public authorities, most of them IDAs. Among Long Island’s eight IDAs, the Nassau County and Riverhead Town agencies were sent the letter, he said.

Nassau IDA chairman Richard Kessel said Wednesday his agency has complied with the committee’s request. Since Jan. 1, 2018, the Nassau IDA has entered “a new era," he said. "We have made a huge number of changes to make the IDA more transparent.”

Tracy Stark-James, executive director of the Riverhead IDA, said Thursday a committee official told her the letter was sent in error and the IDA does not need to produce documents for the committee.

The Senate investigation follows the introduction of two dozen bills in the Senate and Assembly aimed at further limiting the scope of IDA activities.

Skoufis has authored bills prohibiting tax breaks for businesses seeking to move within New York State and barring local elected officials from serving on IDA boards as occurs in Islip Town, where the town board is also the IDA board.

Sen. Todd Kaminsky (D-Long Beach), the only Long Islander on the investigations committee  has proposed legislation requiring IDAs to livestream their board meetings over the internet and to provide more information to school districts and other governments affected by tax break deals before they are approved. He also has introduced a bill stopping IDAs from paying elected officials and political party leaders for legal work and other services.

Kaminsky said the Senate probe aims “to get a basic understanding of how IDAs are operating throughout the state, whether there is uniformity and whether all of them are in compliance with state law.” He said homeowners and public school officials are increasingly calling for more oversight.

Both senators said the investigations committee may hold a public hearing on IDAs and will issue a report with the investigation's findings, including recommended legislation.

“We need to re-examine how well the system is working and see who is in compliance with state law,” Kaminsky said.