Comptroller Releases Annual IDA Performance Report; Calls for IDA Reform
On Tuesday, Comptroller DiNapoli released his annual performance report on the state’s Industrial Development Agencies (IDAs), and called for legislation to ensure that IDA projects meet economic goals.
IDAs are public benefit corporations created to facilitate economic development in specific areas by attracting, retaining or expanding businesses. To that end, IDAs can offer financial assistance for project through tax-exempt debt financing and exemptions from property, sales and mortgage recording taxes. In return, many of the projects that benefit from IDA assistance include agreements to create new jobs or retain existing jobs in the community and make an annual payment-in-lieu-of-taxes (PILOT) to help offset the loss of revenues from the tax exemptions provided.
New York’s IDAs supported 4,444 projects and provided nearly $500 million in net tax exemptions in 2010, but projects were down and cumulative job gains decreased by 22,000 from the prior year. IDA critics, including DiNapoli, argue that IDAs should be better about ensuring that beneficiaries are meeting their job creation commitments.
We disagree with the comptroller on the issue of IDAs. While all aspects of government can benefit from increased transparency, the proposed legislation from the Comptroller is not the solution. IDAs play an important role in economic development that the state currently cannot perform. So we must do what we can to ensure that IDAs can still function at the local level to help stimulate the small business marketplace that is critical to our Upstate areas.