DiNapoli: Effectiveness of IDAs Still Questionable

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DiNapoli_Thomas Comprehensive Review of State and Local Economic Development Efforts Needed 

Industrial Development Agencies (IDAs) reported they supported 4,577 projects and provided nearly half a billion dollars in net tax exemptions in 2009, for a cumulative gain of 204,000 jobs over the life of the projects assisted, according to a report examining the performance of IDAs released today by State Comptroller Thomas P. DiNapoli.

“For four years, I’ve called on IDAs to improve the accuracy of the jobs data,” DiNapoli said. “Taxpayers should know if the projects they’re paying for are creating the jobs that were promised.  Year after year, we’ve had serious questions about the effectiveness of IDAs.  We need to make sure that the tax breaks given for these projects are promoting job retention and growth.

“New York has a lot of local economic development entities; developing a regional, coordinated approach is very difficult. We have to fix that.”

This is the fourth annual DiNapoli report examining the performance of the state’s IDAs. The report analyzes the aggregate net tax exemptions provided by IDAs in each county compared to the aggregate property tax levy for each county and the total job gains or losses by county. The report found no apparent connection between higher tax exemptions and job growth.

DiNapoli noted that while there has been some improvement in the quality of the reports submitted by IDAs, shortfalls on the job data continue to impede the ability to evaluate the effectiveness of these economic development agencies. DiNapoli’s report includes four recommendations for making IDAs more effective:

1) Improve transparency of IDA operations. Publish an annual report

        card, with detailed information on individual projects, such as

        job performance data and  tax exemptions;

2) Improve accuracy of jobs data.  IDAs should require that project

        developers sign a uniform project agreement that contains

        provisions that compel the accurate disclosure of employment

        information;

 3) Ensure projects are likely to meet economic goals.  Utilize

        uniform applications for projects and adopt objective project

        evaluation and selection criteria; and

 4) Require repayment of benefits if economic goals are not met.

        Include a “clawback” provision in project agreements that allow

        IDAs to recapture benefits if employment or other project goals

        are not met.

In addition to the 115 IDAs operating in the state in 2009, there are also 279 local economic development corporations, many of which were also created for economic development purposes.  Some areas in the state have multiple IDAs and LDCs, including 40 such entities in New York City, 21 in Erie County, 19 each in Monroe and Westchester counties, and 14 each in Albany and Orange counties.

DiNapoli also announced the release of comprehensive financial and debt data for IDAs for 2009 and, for the first time, comprehensive financial and debt data for LDCs.  The availability of LDC data is the result of reporting requirements under the 2005 Public Authority Accountability Act, as amended by the 2009 Public Authorities Reform Act.

Other findings of the IDA report include:

 · In 2009, the 115 IDAs in New York State reported they supported

        4,577 projects, an increase of 106 projects with an additional

        worth of almost $8 billion from the year before.

 · Nearly $5 billion of the increase in the total value of projects

        assisted by IDAs in 2009 is attributable to one new project – the

        Global Foundries U.S. microchip plant in Saratoga County.

 · Other large new projects are being assisted by the Rensselaer

        County IDA (a power plant and a health imaging manufacturing

        facility), the Monroe County IDA (a shopping center), and the Town

        of Lockport IDA (an internet data center).

 · IDAs provided total gross tax exemptions of $1.2 billion in 2009.

        These exemptions were partially offset by the receipt of

        payments-in-lieu-of-taxes (PILOTs) totaling nearly $700 million),

        resulting in net tax exemptions of almost $500 million.

· Net exemptions declined due largely to on-going adjustments in

        reporting methods by New York City IDA.  These adjustments also

        affect the average cost per job gained. That cost fell to $2,429

        from $3,300 in 2008.

· Projects receiving IDA assistance employed 724,390 full-time

        equivalent workers in 2009.  This represents a net gain of 204,172

        jobs from IDA projects over the life of the projects.

· IDAs are independent public authorities that offer real property

        tax, sales and mortgage recording tax exemptions, and low interest

        rate bonds to attract, retain and expand businesses. In 2009,

        there were 115 active IDAs.

 

  For a copy of the report, visit:

  http://www.osc.state.ny.us/localgov/pubs/research/idaperformance2011.pdf

 

  Comprehensive 2009 financial and debt information reported by IDAs and

  LDCs is now available on the Comptroller’s Web site at:

  http://www.osc.state.ny.us/localgov/datanstat/findata/index_choice.htm

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eHeziDiNapoli: Effectiveness of IDAs Still Questionable

Comments 5

  1. This office needs to be shut down. All it is a talk shop for wanabee politicians and party trolls. It produces nothing but a waste of paper. Look at the ridgehill project almost a billion worth of land and leases given to RATner for maybe $30 million. Do you count these “giveaway” deals in your accounting? Didn’t think so. What about the Macy’s cross county deal?
    PILOT’s in Yonkers means we give the store away for little or no jobs, which are ultimately subsidized by the homeowner. Check out nValley, neary a job created there, unless you count the friends and family club.
    It’s time to save money and get rid of this office, or else give the power of this office to arrest and sue the local governments, LDC’s and IDA’s.

  2. 16 years of Spencer/Amicone giving away the city.
    $15 million dollars in tax breaks for a movie theater that will provide ONE full time job.
    And now Jack pontificates ignoring the total contradiction to all that he has been saying over the years.
    Jack – do you ever consider thinking before you write?

  3. Tell that loudly to your buddy Amicone whom you never have a bad word for. But then again he is a republican by name and a democrat by actions.

  4. The Industral Development Agency should be abolished statewide.The IDA takes tax revenue away from the taxpayers in return for political contributions to elected officials.

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