Being smart about incentives will help the region prosper
Grab anyone off of Delaware or Elmwood avenues or Main Street. They’ll tell you that Buffalo has turned a corner. “We are amidst a resurgence,” they will say. “You should really see what they’re doing down at Canalside.”
But who is paying for this new development activity? You don’t have to listen too closely to hear the murmuring around town. “Why are developers receiving subsidies from my tax dollars? What about the rest of us?”
The common misconception is that developers who receive incentives from state and local agencies are stealing from the tax base; that this is a zero-sum game. But developers and industrial development agencies are not the source of our budget woes. When done right, granting tax incentives for development enriches the tax base by returning unproductive land to the tax rolls and bringing new jobs to the region.
This is not to say we have a perfectly efficient system of meting out tax incentives. The right people need to be in place at the development agencies. They still need to pick the right projects, in the right places. Incentivizing a business to move from Buffalo to Amherst is civic cannibalism.
Additionally, large tax breaks on the most valuable land have the perverse effect of undermining the value of surrounding land. If we focus incentives on the undeveloped or, better yet, the allegedly undevelopable, we can establish a better dynamic: one in which all land value will rise.
While the system is far from perfect, tax incentives must continue. Buffalo is not going to spring back to life overnight. But to sit by and decline to properly incentivize economic growth would be fatal inaction.