Press Coverage
IDA Campaign in the News
Rochester City News
"Memo to Spitzer: A better path to a better economy" John Greenbaum Selected Extracts:
With Upstate New York mired in one of the nation's most sluggish economies, business and political leaders are searching for a way out. There are many different paths to a globally competitive economy, but Rochester-area public officials have relied heavily on tax breaks and other incentives. And corporate business leaders are fighting grassroots pressure to require subsidized businesses to pay living wages.
Other nations with successful economies have taken a different path, investing in infrastructure and technology, providing excellent social benefits and worker rights, and insuring that workers earn a living wage and that there is relatively equitable distribution of income.
New York currently suffers from economic development Attention Deficit Disorder. We cut business-incentive deals as they come into our line of vision and avoid any effort to develop and stick to a sensible, focused, economic-development strategy. One New York recommends identifying our economic resources and developing a long-term strategy based on our competitive position. Once the state has identified a unified "development budget," we can start to allocate funding based on our priorities. New York needs to invest wisely in our economic future.
Presumably, those priorities will not include wasting money on economic-development programs that are riddled with abuse. The Empire Zone and Industrial Development Agency systems need to be overhauled. Subsidy dollars should be given back when jobs are not created, and subsidies should go only to businesses creating good jobs, including prevailing wages during the construction phase. We don't want to encourage the creation of Wal-Mart jobs, and we don't want to subsidize contractors bringing in workers from out of state.
And the process needs to be transparent. The relevant municipalities and school districts need to be at the table when the tax-break decisions are being made.
And although small businesses don't have the political clout that large businesses have, New Yorkers should keep in mind that 88 percent of all businesses in the state are micro-enterprises and employ approximately 20 percent of the workforce. The current state-funded micro-enterprise program generates $2 in tax revenue for every dollar the state invests. And it costs the state only $1,585 per job created, compared to $75,000 per job created under the Empire Zone program. Yet micro-enterprise subsidies make up a fraction of 1 percent of New York State's economic-development dollars.
Rochester Democrat and Chronicle
"Businesses Getting Tax Breaks Must be Accountable" By Barbara Orsino Guest Essayist June 26, 2006 Selected Extracts:
Industrial development agencies initially were developed to bring back businesses to depressed areas in hopes of creating good jobs. IDAs use tax breaks to lure businesses or keep them here. New York has 115 IDAs throughout the state, but the system is not working.
A recent Metro Justice report on our local IDA (County of Monroe Industrial Development Agency) shows that town governments lost $1.7 million to COMIDA projects during 2002-2004 and that Monroe County gave up $3.6 million in revenue. School districts in Monroe County were the biggest losers, sacrificing more than $13 million in revenue.
Town and school boards have no say in this process; the IDAs don't have to consult them before giving away their tax revenue. With homeowners paying more in property taxes to make up the difference (we already pay the nation's highest state and local taxes) and with school districts laying off teachers, we have to ask what we are getting for these tax breaks.
There are other problems with the IDA system. COMIDA has [also] subsidized local restaurants, collision shops, dentist offices, CPAs and spas. Other small-business owners are upset that the county is helping their competition steal customers. Moreover, the businesses that are given tax breaks don't have to pay a decent wage. IDAs have subsidized Wal-Mart, McDonald's and Cintas, an industrial laundry paying $8.50 an hour. Nor do IDAs around the state have to hire local workers at prevailing wages for IDA-subsidized construction. Why would we use our tax dollars to pay construction workers from outside the area while local workers are unemployed?
If the businesses aren't creating the promised jobs, then towns and school districts need to be able to recoup their tax revenue. According to George Maziarz, a Republican state senator who is sponsoring an IDA reform bill: "Companies should not continue to get tax breaks if they don't live up to their end of the bargain. If hard-working New Yorkers don't do their job well, they get fired. Companies that get tax breaks should not be rewarded for failing to meet their commitments."
Opponents of IDA reform say that increasing accountability will impose "too many requirements and slow the process." Apparently they want to continue the current quick and dirty process that gives away taxpayer dollars with zero accountability.
During these challenging times, we need to make sure our elected officials are encouraging the creation of good jobs. It is time to reform the IDA system.
Newsday
"Trouble with Tax Breaks; Exemptions for LI companies designed to spur job growth don't always pay off, critics say" By Lauren Weber June 20, 2006 Selected Extracts:
ALBANY - Before Swezey's went out of business in 2003, the storied Long Island retailer cut the equivalent of more than 250 full-time jobs. But it held on to economic-development tax breaks of $134,515 from the Town of Brookhaven.
A year later, nearly 20 Long Island companies took similar tax exemptions, totaling around $2 million, from municipalities, but still shaved hundreds of jobs.
These corporate incentives are perfectly legal, but they've raised the ire of some politicians and advocacy groups who question whether they should be granted at a time when property taxes are soaring.
Critics are not opposed to the strategy behind state-sponsored industrial development agencies, called IDAs, which were created in 1969 to foster business expansion and create jobs along the way. But for every such project that meets its job targets - estimates that the company submits when it applies for benefits - there's another one that created jobs but didn't meet its initial target, and another one that actually lost jobs, according to an audit released last month by State Comptroller Alan Hevesi.
"The system we have right now rewards failure," said Assemb. Robert Sweeney (D-Lindenhurst), sponsor of a bill to increase oversight and accountability of the incentives. "If a business that benefits from IDA assistance promises the world but produces nothing, what's the penalty? Usually there is none. And that's wrong."
An analysis of the 450 IDA-assisted projects on the Island in 2004 reveals that many companies have not yet met their job-creation targets, and some have lost jobs. Many offered spotty or inaccurate data, making it impossible to determine if they've held up their end of the bargain.
In some cases, the missed targets refer to buildings that hadn't yet been completed and so hadn't been filled with the promised new employees (IDA projects generally have 10 years to comply with the agreements). Other companies were affected by large-scale economic or political events beyond their control, such as the Sept. 11, 2001, terror attacks.
Perhaps the most controversial aspect of Sweeney's bill - and the Senate's companion bill - is the "clawback" measure, which requires companies to repay all or some benefits if they miss their goals.
Many IDAs include clawback clauses in their contracts. But a survey of Long Island's IDAs found only two instances in which the provision was used, including one when Nassau County's IDA recaptured money from Tweezerman in Port Washington in 2005 after the company was acquired by German knife-maker Henckels.
"What we're saying is, if grants of public money are being made in the name of job creation and retention, there should be obligations on the side of both parties," said Frank Mauro, head of the government watchdog group Latham-based Fiscal Policy Institute.
IDA officials argue that the economy is unpredictable and that punishing companies for factors beyond their control is unfair. Terror attacks or soaring oil prices can suddenly upend an industry. Initial job estimates can't be set in stone in a fast-changing economy, they say.
For instance, Lufthansa, the German airline whose U.S. headquarters is in East Meadow, was the largest project to lose jobs. When its IDA agreement was signed in the 1990s, it projected it would retain 468 jobs and add 100, in exchange for $958,783 in 2004 tax exemptions. But by the end of 2004, it had only 340 employees.
A spokesman said Lufthansa's local employment peaked at more than 600 before 9/11 and fell after the terrorist attacks crippled the airline industry.
But Greg LeRoy, director of Washington-based Good Jobs First and a critic of IDAs, says not every instance of failure can be explained by an event as compelling as 9/11.
"I think you need to have something quite stringent about unforeseen events, like acts of war or acts of terrorism," he said. "At some point you've got to say, 'We're sorry it didn't work out, but we've got better things to do with the money.'"
In his IDA audit, Hevesi said tax breaks aren't free; they are sums that would otherwise go to local school districts and governments. Indeed, it is usually school districts that give up the most potential revenue. Yet, school officials often have no say in the disbursement of IDA benefits. That would change under Sweeney's bill.
"My view is that ultimately the schools are not operating in a vacuum," said Howard Fensterman, chairman of the Nassau IDA. "We're looking at the best interests of the county in total."
The catch in all this is the difficulty of gauging companies' intentions. Corporations have become adept at tracking the available subsidies, often hiring high-priced site-location consultants who play municipalities against one another to gain as many incentives as they can.
Ultimately, IDAs have little choice but to take companies at their word when they threaten to decamp. But in many instances the companies have long since made their decisions - often based on factors other than financial incentives, such as quality of life or historical roots - and are simply jockeying for extra benefits, said LeRoy, from Good Jobs First.
"At the end of the day, the corporate decision-making process is a black box," he said.
"So all the local officials know is that someone knocks on the door and says, 'I might have a bunch of jobs for you, what have you got for us?'"
Times Union
"The IDA Scorecard; An audit by the state comptroller shows the need for more transparency and accountability" Editorial June 12, 2006 Selected Extracts:
IDAs have proliferated and now exist in almost every county in the state, including not only struggling ones, but also bustling suburban counties on Long Island. And instead of competing against the South, IDAs have often wound up competing against one another, as an agency in one county offers tax incentives to lure jobs away from a neighboring community.
Now comes an audit from state Comptroller Alan Hevesi that casts further doubt on the job-creation claims made by IDA enthusiasts. The audit found that only a third of the projects supported by six IDAs throughout the state -- including upstate and Long Island -- met their job creation goals, and not one of the agencies attempted to recoup benefits from projects that failed to meet their targets.
Mr. Hevesi proposes a series of worthy reforms, including more disclosure from each of the 115 IDAs throughout the state on how many jobs they have created, the tax breaks they have provided to companies and the amount of payments in lieu of taxes those projects have generated. He also proposes a requirement that agencies take back benefits given to projects that fail to achieve job creation and other goals.
Mr. Hevesi remains convinced that IDAs, which are in effect local authorities with semi-autonomous powers, are "a vital and important part of local government efforts to support economic development and job creation."
Mr. Hevesi's proposed reforms, which he has included with draft legislation, would go a long way toward lifting that veil of secrecy.
The Post-Standard
"Legislature has chance to fix IDA Inepteness" By Joe Rossi Syracuse, NY June 6,2006 Selected Extracts:
Industrial Development Agencies should be helping to kick-start the Upstate economy. Instead, many of them give tax breaks to companies that turn around and cut jobs. IDAs give businesses property and sales tax breaks in order to spur job growth. They also issue low-interest bonds, called Industrial Development Revenue Bonds, which give companies access to the money needed to finance construction of new developments.
This help that IDAs give is not free. Every dollar of taxes that goes unpaid because a business gets IDA assistance is a dollar of taxes that has to be paid by other businesses and homeowners. Because of this, taxpayers deserve to be confident that IDA projects are creating jobs that pay decent wages for area residents.
When IDA projects do create jobs, often there are no standards for the types of jobs that are created. So, we get IDAs helping to build Wal-Mart stores, like the one in Utica, where employees make so little that they are eligible for taxpayer-funded health care.
That means we're subsidizing these companies twice - once by giving them tax breaks and the second time by paying for their employees' health care.
Several senators and Assembly members, led by Sen. George Maziarz in the Senate and Assemblyman Robert Sweeney in the Assembly, have decided to take a stand and call for a change to business as usual. They have proposed legislation that would fix these problems.
Rochester Democrat and Chronicle
"Jobs and tax relief; IDAs must ensure businesses meet their job-growth pledges" May 22, 2006
Government must do more to keep good-paying jobs upstate. Tax relief has to be in the mix of solutions.
According to separate audits and analyses by Metro Justice and state Comptroller Alan Hevesi, IDAs, including the County of Monroe Industrial Development Agency, aren't watching the store closely enough. Statewide, only about one-third of the businesses given tax relief met their job-creation goals. It's important that IDAs with greater regularity rescind the tax deals of businesses that skip out on their obligations.
What's needed is broader community representation in COMIDA. Representatives of local governments and public school systems should have a direct voting say in the granting of tax relief. According to Metro Justice, between 2002 and 2004 local school districts lost more than $13 million in revenue related to tax-relief deals.
Schools do have input with COMIDA. But their role should be stronger, commensurate with the potential impact of abatement agreements on their budgets. That COMIDA deals are even relevant to schools came as something of shock to Greece school board candidates interviewed recently. That's a sign of how weak the relationship is.
COMIDA and other IDAs must do more to close the gap between tax relief granted and jobs promised. And they should open their governing bodies to the wider, property-tax-paying community.
Buffalo News
"Amherst IDA takes fire from all sides" By David Robinson May 21, 2006
James J. Allen had a really bad week.
Allen, the executive director of the Amherst Industrial Development Agency, already was a marked man when it started, since County Executive Joel Giambra wants to merge all the suburban IDAs with the Erie County Industrial Development Agency.
But it all went down hill from there, beginning on Monday, when the Amherst Town Board voted to seek state approval to create its own urban development agency, which supporters say will encourage redevelopment within the town but Allen worries is a back-door effort to supplant the Amherst IDA.
Then, the next day, state Comptroller Alan Hevesi issued his long-awaited report on the state IDAs, criticizing the Amherst agency because only one of 10 projects it subsidized in 2000 and 2001 met its employment goals, and urging the agency to adopt provisions to "clawback" tax breaks from firms that don't meet their job targets.
To critics... IDAs are a costly economic development tool that dole out about $400 million a year in tax breaks statewide, yet deliver the jobs they promise only about a third of the time, according to the Hevesi audit.
Finger Lakes Times
"2004 IDA snapshot dismal" By Craig Fox May 18, 2006
CANANDAIGUA — An audit by the state Comptroller’s Office found that the Ontario County Industrial Development Agency didn’t meet its goal of creating 542 jobs in 2004. In fact, it lost 73.
Earlier this week, state Comptroller Alan Hevesi released an audit report dealing with six IDAs across the state.
Overall, the auditors looked at 96 single-unit projects at the six IDAs and found that only one-third of them met or exceeded their goals. Thirty-three percent had a reduction of jobs.
In a press release, Hevesi acknowledged IDAs’ importance to economic development efforts but noted that the tax breaks companies is real money, and to make “these programs as effective as possible, we need to know what is and is not working and look at how we can make improvements.”
Hevesi’s report said that IDAs should do more to track how well companies are fairing with job creation, because relying on the company’s data isn’t enough.
Hevesi has recommended improvements in monitoring whether companies meet their job goals.
Buffalo News
"Consolidate IDAs statewide, Giambra urges" By Harold McNeil May 18, 2006
Not only should Erie County's six industrial development agencies be consolidated, according to County Executive Joel A. Giambra, but statewide they ought to be better regulated to keep them from cannibalizing each other and ripping off taxpayers.
Giambra addressed his concerns Wednesday in a joint hearing on IDAs with members of the County Legislature's Economic Development Committee.
"We have too many IDAs giving away too many tax breaks for too few jobs being created," Giambra said Wednesday in a prepared statement. "One IDA, properly constituted, is all we need."
Exactly how to reconstitute these supposed engines of economic development was the hot topic during Wednesday's hearing. It came on the heels of a statewide audit of industrial development agencies by the state comptroller's office, which found that, statewide, IDAs dispensed nearly $400 million a year in tax breaks to businesses while delivering on promised new jobs only about a third of the time.
Giambra's call for the State Legislature to take the lead in reforming the rules under which industrial development agencies are governed was backed by Sam Williams, director of the Community Action Program for Region 9 of the United Auto Workers, who also spoke at Wednesday's hearing.
Williams said a broad coalition of statewide community and labor groups supports reform so there is more accountability on economic development programs in the state.
He said the initiative encompasses eight reforms, including broader oversight and coordination of IDAs, requiring impact reports for assessing how projects will affect communities and requiring enforceable "claw-back" penalties, allowing municipalities to cancel or reduce tax breaks for companies that fail to meet their contractual job-creation obligations.
Buffalo News
"Hevesi calls for reforming IDAs; Industrial development agencies aren't making the grade, a report by the state comptroller says" By James Heaney May 17, 2006
One of New York's costliest economic development programs, which doles out almost $400 million a year in tax breaks to businesses, delivers jobs as promised only one-third of the time, an audit by the state comptroller has found. Another third of the time, the businesses actually shed jobs, but were rarely, if ever, penalized.
The audit by state Comptroller Alan G. Hevesi faulted IDAs for failing to adequately evaluate projects before extending benefits, track their progress or hold companies accountable when they fail to reach their goals. Hevesi called for a series of reforms to address those problems.
"Giving companies tax breaks is giving away real money," Hevesi said. "We need to know what is and what is not working, and look at how we can make improvements."
A companion report issued by the comptroller detailed the huge cost of the program, which resulted in a net loss to the public treasury of $388 million statewide in 2004. In Erie and Niagara counties, the loss totaled $40.3 million, primarily in local property taxes.
A majority of projects failed to meet their job goals at each of the six IDAs studied. Erie County's IDA had the best track record, with 45 percent meeting their goals.
Likewise, there is insufficient follow-up to determine whether the projects are delivering as promised. Although state law requires companies to report job and other information, most IDAs have incomplete records and rarely attempt to verify or analyze the data.
The Post-Standard
"Audit: IDA grants not tied to job creation; Hevesi audit criticizes tax break follow up " By Michelle Breidenbach and Erik Kriss May 17, 2006
Local industrial development agencies are giving tax breaks to businesses that, more often than not, lose jobs or do not create as many as they hoped, according to a state audit of agencies in six counties.
And in Onondaga County and elsewhere, those government agencies do not try to recapture benefits from those companies, Comptroller Alan Hevesi said in an audit released Tuesday.
Jobs With Justice, relying on information from Hevesi's office, cited Cortland's BMC Industries and Oneida Ltd. as companies that got local IDA benefits in 2004, then cut jobs.
In both those cases, the businesses went bust.
The Empire Page
"IDAs Should Kick Start the Upstate Economy" By Joe Rossi, Political Director, SEIU Local 200United Guest Editorial May 17, 2006
Selected extracts:
Industrial Development Agencies (IDAs) should be helping to kick start the Upstate economy. Instead, many of them give tax breaks to companies that turn around and cut jobs.
This help that IDAs give is not free. Every dollar of taxes that goes unpaid because a business gets IDA assistance is a dollar of taxes that has to be paid by other businesses and homeowners. Because of this, taxpayers deserve to be confident that IDA projects are creating jobs that pay decent wages for people who live in the area. Otherwise, we’re just wasting precious resources.
And it’s clear that many projects that our IDAs help are not creating jobs. The State Comptroller, Alan Hevesi, released a report on May 16 that showed that one-third of IDA projects did not meet their job creation commitments and another third of the projects actually lost jobs! According to the report, the Onondaga County IDA was 546 jobs short of its goal. As we all know, given our economic condition, Upstate New York can’t afford to be paying for job creation programs that don’t work.
When companies don’t create the jobs they say they are going to create, taxpayers should get their money back.
When IDA projects do create jobs, often there are no standards for the types of jobs that are created. So, we get IDAs helping to build Wal-Mart stores, like the one in Utica, where employees make so little that they are eligible for taxpayer-funded healthcare. That means that we’re subsidizing these companies twice – once by giving them tax breaks and the second time by paying for their employees’ health care. That doesn’t help our local economy.
Several brave Senators and Assembly Members, led by Senator Maziarz in the Senate and Assembly Member Sweeney in the Assembly, have decided to take a stand and call for a change to business as usual. They have proposed legislation (S. 7391/A. 10787) that would fix these problems.
Buffalo Business First
"Hevesi wants changes to IDA policies" May 16, 2006
Selected extracts:
With job-creation goals being met only a third of the time in projects supported by industrial development agencies, Comptroller Alan Hevesi is calling for more accountability.
The report is based on audits of six of the 115 statewide IDAs: Town of Amherst, and the counties of Erie, Onondaga, Ontario, Suffolk and Tompkins. In all, auditors examined 96 projects supported by the half-dozen IDAs of which 33 percent, or 32 projects, met or exceeded goals; 33 percent failed to meet job-creation targets but did show some increases or at least had no change in employment; and 33 percent saw a reduction in jobs.
Hevesi has proposed legislation that would improve the operations of IDAs throughout the state. They include provisions requiring IDAs to seek to reclaim benefits when job targets are missed, standardized "report cards" on how IDAs performed and standardized applications for benefits from IDAs everywhere in the state.
"Giving companies tax breaks is giving away real money, and some of these companies are creating jobs and generating economic activity," Hevesi said in a statement. "In order to make these programs as effective as possible, we need to know what is and is not working and look at how we can make improvements."
Star Gazette
"Why would big business get tax breaks?" Letters to the Editor By Margaret Costello, President, Chemung/Schuyler Labor Assembly May 15, 2006
Selected extracts:
On April 28, I attended the Chemung County Industrial Development Agency meeting. Along with other concerned citizens, I was stunned to find, once again, the type of abuse that the IDA reform movement addresses. The IDA has approved a $2.5 million bond that will be afforded to Diversified Development Realtors.
To continue on with the no-cost-to- the taxpayer idea, let's look at the jobs that this will produce. The majority of businesses that will be leasing this property will be retail and restaurants. Many of these jobs will be paying minimum or near minimum wages with little or no health care or other benefits. Many of the people who work these jobs may require the use of food stamps, fuel assistance and rental assistance. These are benefits paid by taxpayers.
There is legislation in the New York State Legislature to address reform of the IDAs across the state focusing precisely on these issues. Although I realize the need for basic business infrastructure to draw people and businesses into an area, how many low-paying jobs and service-related businesses getting high priority and our tax money can this area sustain before we go bust?
Metro New York
"City gave breaks to firms that cut workers" By Patrick Arden May 10, 2006
Selected extracts:
Forty-one percent of the companies that got tax breaks from the city in 2004 have cut their work forces, according to a study released yesterday in Albany by New York Jobs With Justice.
A coalition of labor, community and government-watchdog groups support new legislation aimed at reforming the rules overseeing county and municipal Industrial Development Agencies, which provide public assistance to businesses.
“IDAs are an important tool for economic development,” explained Michael Rabinowitz, of New York Jobs With Justice. “But not only are many companies not honoring their commitments — they’re actually cutting jobs. This happens because IDAs lack transparency and accountability.”
While the state comptroller is supposed to receive data from all IDAs regarding tax exemptions and job creation and retention goals, “the majority of IDAs were missing a portion of information,” Rabinowitz said. “Many say they’re unable to get the information from the companies. If you’re giving someone a tax break, or helping with low-interest bonds, then you should be able to get this information.”
The city’s IDA is one of the few to provide wage data. Of the jobs created by its assisted projects in 2005, 39 percent paid less than $25,000 a year.
“At that wage level, a family of four is eligible for state-subsidized health care, so we’re subsidizing those jobs through additional means as well,” Rabinowitz said.
MSNBC
"Bill would impose 'living wage' stipulation on IDA recipients" By Joel Stashenko The Business Review (Albany) April 30, 2006
Selected extracts:
Companies receiving incentives from industrial development agencies would have to pay workers a "living wage" under a bill filed in the state Legislature this week.
The legislation [A10787/S7391] defines a "living wage" as one exceeding 185 percent of the federal poverty level for a family of three. Currently, that would result in a mandated minimum pay of $30,710 a year per worker, or just under $15 an hour.
The Maziarz-Sweeney bill was immediately embraced by labor, including the Service Employees International Union and the United Auto Workers.
"If companies don't create the jobs they promise, taxpayers should get their money back," said Ed Donnelly, legislative director in Albany for the state AFL-CIO. "When hard-working New Yorkers don't do their job well, they get fired. Why should companies that get tax breaks be rewarded for failing to meet their commitments?"
Another group behind the bill is New York Jobs with Justice, a union-backed organization that is also supporting a series of bills in the state Legislature to require larger employers in New York to provide workers with health insurance.
Westchester Journal News
"Bill would tighten up IDA rules" By Jay Gallagher April 25, 2006
Selected extracts:
Local agencies that dole out millions in tax breaks to private companies that create jobs often waste taxpayer money and need to be reined in, lawmakers said yesterday.
Republican Sen. George Maziarz and Democratic Assemblyman Robert Sweeney are pushing a bill to increase oversight of and limit the power of industrial development agencies (IDAs).
The 116 IDAs in the state, run by counties, cities, towns and villages, offer property-tax breaks, sales-tax exemptions on construction materials and tax-free financing to businesses.
The Post-Standard
"Law would tighten rules for agencies; Sponsors say IDAs give big tax breaks to companies, should be more accountable." By Erik Kriss April 25, 2006
Selected extracts:
Industrial development agencies, which offer big tax breaks to selected companies, would operate under stricter rules under a new bill.
The bill's sponsors said IDAs need to be more accountable to the public and shouldn't help enrich profitable corporations that pay wages so low their employees need public assistance.
Representatives of environmental, labor and community groups joined the sponsors Senate Labor Committee Chairman George Maziarz, R-Niagara, and Assemblyman Robert Sweeney, D-Lindenhurst Monday to unveil the proposal.
Rochester Democrat and Chronicle
"Maziarz calls for stricter oversight of IDA projects" By Jay Gallagher April 25, 2006
Selected extracts:
Local agencies that dole out millions in tax breaks to private companies that create jobs often waste taxpayer money and need to be reined in, lawmakers said Monday.
Republican Sen. George Maziarz and Democratic Assemblyman Robert Sweeney of Suffolk County are pushing a bill to increase oversight of and limit the power of industrial development agencies.
Democrats have promoted similar bills for years but this is the first time in memory a member of the Senate Republican majority, often more sympathetic to business interests than the Democrat-run Assembly, has put his name on the bill.
"IDAs in many instances do good things," said Maziarz, North Tonawanda, Niagara County. "There have also been a number of abuses."
Metro New York
"Bill ties benefits, jobs to subsidies; If businesses don’t deliver on promises, they would have to repay tax breaks" By Patrick Arden April 24, 2006
Selected extracts:
Each year IDAs hand out $400 million in tax breaks alone. They also issue bonds that allow companies to borrow money at a low rate of interest. The new legislation is aimed at providing the public with a return on these investments, said Robert K. Sweeney, D-Lindenhurst, chair of the assembly’s Local Government Committee.
“If there are commitments being made that companies will establish a certain number of jobs, and it’s subsequently determined that they haven’t complied with that, then the companies could lose — and have to, in fact, repay — any of the tax incentives and low-interest loans received,” Sweeney said.
Under IDA reform, businesses getting government subsidies would have to meet certain standards. Construction jobs would have to pay prevailing wages, for instance, while permanent employees would have to earn at least 185 percent of the poverty level for a family of three. Local hiring would also be mandated. Many of these provisions are now being negotiated separately under so-called Community Benefit Agreements.
“We’d like to take the question of jobs, benefits and local hiring off the table from the beginning — if agencies are going to give out public subsidies, then these kinds of conditions should be attached to those subsides right off the bat,” said Adrianne Shropshire, executive director of New York Jobs With Justice.
Business Review
"Legislation would withdraw tax breaks if job goals not met" April 24, 2006
Selected extracts:
Local industrial development agencies around the state would be required to recapture a portion of public funding used for economic development if companies don't reach job development goals, under legislation introduced in the New York state Legislature Monday.
While some IDAs do have so-called "claw back" provisions with the companies they give benefits to, many do not.
The bill is being sponsored in the state Senate by Labor Committee Chairman George Maziarz (R-Niagara Falls) and in the Assembly by Local Government Committee Chairman Robert Sweeney (D-Long Island).
WXXI – AM 1370
"Local Group Calls for IDA Reform " By Alex Crichton April 24, 2006
Selected extracts:
ROCHESTER, NY Some local activists and business owners say it's time to reform Industrial Management Agencies, or I-D-A's.
The local agency, COMIDA, has promised jobs through tax incentives, but the group Metro Justice says they've done research that indicates the opposite.
The group says while businesses are getting tax exemptions...school districts, counties and towns are not getting those tax revenues or getting reimbursed.
The group supports legislation from Senator George Maziarz which would force companies to deliver the jobs they promised, or face penalties.
Rochester Democrat and Chronicle
"Watchdog group says job pledges unfulfilled; Some projects get county tax breaks, don't add required posts" By Nishad Majmudar April 21, 2006
Selected extracts:
An economic development watchdog organization plans to release a report today contending that Monroe County's tax incentive programs don't deliver on their promise to produce new jobs.
Metro Justice, a grass-roots group that has frequently criticized the County of Monroe Industrial Development Agency, said a study by the Fiscal Policy Institute in Albany found that 63 percent of projects that received COMIDA benefits from 2002 to 2004 did not add the number of jobs required by the county.
"The whole thing is framed by a lack of accountability," said Jon Greenbaum, an organizer with Metro Justice. "(COMIDA gives) away incentives without any requirements of government entities."
The full report will be presented at a news conference this morning by Metro Justice and public officials. Greenbaum said the broad goal of the report is to support state legislation that would reform the framework for industrial development agencies.
Buffalo News
"Legislation contains a 'claw back' provision to recover firms' tax breaks" By Michelle Kearns April 18, 2006
Selected extracts:
A group of legislators and advocates gathered to rally support and announce proposed legislation that would penalize businesses that don't keep the promises they make to get tax deals.
"This legislation would require that businesses live up to their end of the bargain," said State Sen. George Maziarz, R-North Tonawanda, as he stood outside with others at the Williams Street post office Monday.
The bill, as described on Monday, would require that companies create all the jobs they promise, and pay more than minimum wage standards for building construction. It would also create a "claw back" mechanism whereby companies would forfeit some tax breaks if they fail to meet their job commitments.
Buffalo Democrats Assemblyman Sam Hoyt and Assemblywoman Crystal Peoples spoke in favor of the legislation.
"We need to stop talking about these things and get something done," Peoples said.
The Westchester Journal News
"Yonkers development should include living wages, union work, coalition says" By Hannan Adely April 18, 2006
Selected extracts:
Companies that receive tax breaks from industrial development agencies should be required to pay living wages and should give preference to local union workers, a group of nonprofit organizations and local politicians say.
The nonprofit leaders, who came together outside the downtown Yonkers post office yesterday, called for the state Senate and Assembly to pass reforms to make sure that IDAs, economic groups that work to spur development, run more responsibly and more openly.
The event was organized by the New York State Initiative for Development Accountability, a coalition of groups that is pushing for IDA reform on a state-wide level, including better wages and more openness of IDA operations.
Representatives of the Service Employees International Union Local 32BJ, New York Jobs with Justice, and the Hunger Action Network of New York State also attended the press conference, along with Yonkers City Council President Chuck Lesnick.
The Westchester Journal News
"Rally to focus on jobs, taxes" April 15, 2006
Selected extracts:
It's a grievance among many taxpayers, particularly those in organized labor. A business project, lured to the region with tax breaks, turns around and hires workers from out of town at wages below the local norm.
On Monday a group of labor and citizens' groups will rally at noon at the Downtown Yonkers Post Office in support of proposed state legislation that would more closely link jobs and tax benefits. The targets of the legislation are industrial development agencies, which are empowered by the state to provide reductions in sales and mortgage taxes and other inducements to businesses for projects that are seen as strengthening local economies.
The objective is to get companies that benefit financially from IDA inducements to keep those benefits in the communities that are shouldering the tax breaks, said Michael Rabinowitz of New York Jobs with Justice, one of the sponsors of Monday's rally.
Buffalo News
"IDAs need to be accountable to communities" Buffalo News Opinion By Sen. George Maziarz April 3, 2006
Selected extracts:
Industrial development agencies are an important tool in our job creation toolbox.
However, waste in any area of government - whether it's in IDAs, in the Medicaid system or in state departments and authorities - should be eliminated so that taxpayer dollars aren't squandered.
Upstate New York needs job development programs that work. When we give tax breaks, or other subsidies, we should make sure our communities are benefiting from them.
Companies should not be getting tax breaks to create jobs that pay so little that the people who get the jobs are eligible for public programs like Medicaid or food stamps.
Companies should not be getting tax breaks and then using fly-by-night contractors from other states to do the construction. We have plenty of hardworking men and women around here who should be getting the construction jobs.
And companies should not continue to get tax breaks if they don't live up to their end of the bargain. If hardworking New Yorkers don't do their job well, they get fired. Companies that get tax breaks should not be rewarded for failing to meet their commitments.
Buffalo News
"Audit right; improve IDAs; Use findings to plan for and agree on forming one countywide agency" Buffalo News Editorials March 26, 2006
Selected extracts:
The Amherst Industrial Development Agency, which the Town Board should vote to merge with Erie County's, in 2000 and 2001 approved eight projects that failed to provide a promised 1,529 jobs. But the agency nonetheless allowed the deal breakers, without the job growth, to receive promised benefits.
That's just one finding of an upcoming state comptroller's audit of six IDAs statewide, including Erie County's and Amherst's.
Comptroller Alan G. Hevesi's auditors found predictable confusion and some ineffectiveness, and in all likelihood Hevesi will seek overdue remedies by trying to update laws governing all IDAs, several of which expire this year.
One fix could be rescinding ongoing annual tax breaks to companies - deals typically last 10 to 15 years - that fail to produce promised jobs. Another might be to seek payment of forgiven taxes by firms that didn't meet job or investment promises.
These are collectively known as clawback agreements, and since other IDAs around the state include them in their contracts, IDAs should here too. They gain the right to go after and take back benefits granted to companies that fail to hold up their end of the bargain.
Unless there is one countywide IDA, whose board members think about what's best for all county taxpayers, developers will continue to enjoy benefits they don't earn with full investment and promised jobs. Hevesi's audit provides long-needed, outside, objective performance review of Erie County's two major IDAs.
Jobs with Justice
