Chris Johnston, vice chairman of the Erie County Industrial Development Agency, has a bone to pick with the state’s Authorities Budget Office – a big one.
The state agency last week issued a report that cast the state’s IDAs in a bad light, concluding that the IDAs in Erie County doled out more than $3.7 million in tax breaks to 18 companies during 2008.
And for all that taxpayer-funded help, those businesses created a paltry 33 jobs – or one new position for every $112,000 in subsidies.
Critics immediately seized on the report as proof that IDAs squander taxpayer money, but the first reaction from IDA officials was that the numbers didn’t quite sound right. They just weren’t sure how much.
But after sifting through their own records, officials from both the Erie County IDA and the Amherst IDA, which accounted for more than three-quarters of the projects cited in the state report, said their reviews each showed that they created far more jobs than the state report gave them credit for.
The differences were particularly stark with the Erie County IDA, which says its own figures paint a much brighter picture of how its 2008 projects fared, mainly because it says the Authorities Budget Office misinterprets the project information that the IDA is required to submit to the agency.
That misinterpretation took what Erie County IDA officials said were very successful job creation results in a difficult economy – a gain of 1,075 jobs over the five-year period covered by the report – and turned it into a loss of 276 jobs at those same 12 companies that received tax breaks through the agency in 2008.
“The report’s inaccurate in terms of its methodology,” said Johnston, who fired off a letter Thursday to David Kidera, the Authorities Budget Office’s director, protesting the report’s findings and demanding a correction.
“This is really a feel-good story when you think about it,” Johnston said. “That’s a phenomenal success during an economy that was really difficult.”
Officials from the Amherst IDA also took issue with the report’s findings. The state agency said the Amherst IDA backed two projects that created just 17 jobs at a cost of more than $41,000 in tax breaks per position – a disappointing 136 jobs less than the companies promised to create.
But Amherst IDA officials said those numbers are wrong. They contend that the agency gave tax breaks to three projects during 2008 that are still classified as active. Those projects, by the Amherst IDA’s calculations, received $174,477 in tax breaks and have created a total of 48 net new jobs, according to David Mingoia, the agency’s deputy director.
One project, an office at 45 Bryant Woods that is headquarters for the accounting firm Chiampou Travis Besaw & Kershner, had 17 more employees last year than initially forecast, Mingoia said. Another project involved an addition to the Dent Tower, which has 190 more employees than originally estimated. The third is an Iskalo Development project at 2410 N. Forest Road that has not been completed. That project, still under partial assessment, was expected to create 295 jobs but only had 136 positions as of last year.
At the Erie County IDA, Al Culliton, the agency’s chief operating officer, said the problem stems from the way the state agency handles IDA reports on job data from companies with more than one active project. Because of that glitch, the state report essentially ignored the jobs created by the four companies that previously had received tax breaks through the IDA.
So the report essentially treated projects from companies like John W. Danforth Co. in the Town of Tonawanda, along with Life Technologies, APP Pharmaceuticals and Starline USA on Grand Island, as if they’d closed.
When you adjust for the fact that those businesses are very much open today, the 12 projects backed by the Erie County IDA helped create 1,075 jobs over the five-year period covered by the report, 709 more than the companies had promised, IDA officials said. That’s a big difference from the shortfall of 276 jobs that the state report cited.
“We’ve been aware this has been a problem for a while now,” said John Cappellino, the IDA’s executive vice president.
In fact, Culliton wrote Kidera in late February , spelling out the problem and asking for guidance on how best to handle it.
The state agency responded a week later with suggestions, but they obviously didn’t do the trick.
“There can be some double counting,” Kidera said.
“When you have multiple projects at the same site, it can get a little tricky,” he said. “Hopefully, that will get fixed as we go forward and they get more comfortable with the reporting system.”
But Kidera also notes that the IDAs all certified that their job reports were accurate.
“We don’t change the numbers. We do not amend them,” he said. “With Erie County, every time we come out with something, they come back and challenge the numbers.”