County needs to collect mortgage recording tax
The mortgage recording tax (1 percent of the mortgage amount) is imposed by New York State and collected by Erie County for each new mortgage. A quarter of this collection is dedicated to supporting the operating expenses of the local public transit authority, the Niagara Frontier Transportation Authority.
When the Erie County Industrial Development Agency offers tax incentives to business applicants, the current policy is to include the mortgage recording tax as an option in the package. The result is a decline in revenue for the NFTA. The revenue loss is substantial because the business proposals deal with projects of $500,000 or more. At a time when demand for public transit is rising, and while the costs for providing public transit are also rising, any reduction in revenue must be avoided.
As reported in The News, the ECIDA is now reviewing six applications for tax breaks on new business developments. Four of the current applicants seek the mortgage recording tax exemption included as part of the deal. The total value of these four projects is $12.26 million. Therefore, the portion of mortgage recording tax denied to the NFTA for just these four applications totals $30,650.
This amount is small potatoes for project applicants, easily absorbed. However, the continuing practice of awarding this exemption looms large for the NFTA, already experiencing budget shortfalls. The ECIDA should review its policy and eliminate the recording tax exemption from its package of offerings for economic development, thereby affirming the importance of public transit for a healthy business climate in Erie County. In fact, the businesses receiving the tax breaks already benefit from the transit services provided by the NFTA. The tax break they seek hurts the very service their employees and customers use. This is counterproductive.
President, Citizens for Regional Transit