IDAs fail to fulfill their job-creation goals
There have been reports in the recent past from the head of
the Niagara County Industrial Development Agency, and a letter from one of its recently appointed members, extolling the merits of that organization, the professionalism of its members, and its accomplishments. A specific response is in order.
The concept of IDAs is flawed. Taxes in New York State are too high and should be reduced across the board. This is not understood in Albany or anywhere else in New York State. Creating a special organization not elected by the public, to shift taxes to the general public and pass out favors to special interest groups only compounds the taxation problem we have in this state.
Further, existence of an IDA gives political cover to our elected officials. We are told that IDAs are appointed by our elected body and that body has no control over them. Nothing could be further from reality. IDA members are not only elected and therefore do not respond to the public, but are rather in a position to do the bidding of those who appointed them and moneyed special interest groups. NCIDA get its operating budget from fees it levies on the projects it approves. The bigger the project, the bigger the fee, the bigger the fee the bigger the IDA bureaucracy becomes. This is a conflict of interest.
Further, IDAs compete among themselves in the municipalities that have them, resulting in an auction to see which IDA can give away the most taxpayer dollars to entice a specific company to locate within their jurisdiction. If taxes in general were reduced across the board, with no special favors, perhaps companies and people would stop leaving for greener pastures and choose to remain in, or even relocate to, New York State. It is an approach worth trying since current policies are not effective.
A case in point is the AES PILOT approved by the Niagara County Industrial Development Agency and in force for over a year now. Public input was ignored and NCIDA made a sham of duly recognized policies and procedures in the process of approving this PILOT. The immediate effect was a $90 million gift to a huge and profitable multibillion-dollar international corporation and a gigantic shift in taxes to the general public. School taxes went up in our town for the 2007-08 by 23 percent for everyone, including the small businesses the NCIDA is supposed to assist. Special allocations of state aid were made or the increase would have been larger.
This was done in an effort to partially compensate for the huge impact of the AES PILOT on our school district and naturally the burden was picked up by all taxpayers in the state. In addition, our town lost $300,000 in revenue for 2008 and county taxpayers were affected by an estimated 2 percent. These impacts will continue in the out years. There was also a net loss of jobs as a result of the AES PILOT, as no new jobs were created at AES and our school district cut six positions, among other cuts, to partially compensate for the huge loss in revenue.
So much for the IDA job creation rule.
New York State Comptroller Thomas DiNapoli had it right when he stated in a report issued in Feburary of 2008 that IDAs statewide continue to report “incomplete and inconsistent job creation and retention data.” DiNapoli was correct when he called for more oversight of all IDAs lest the folly of the AES PILOT be repeated over and over again, much to the detriment of the taxpayers in our area and in New York State.
James Hoffman
Somerset
