Recent Reforms Will Improve IDA Transparency and Accountability
FROM THE COMPTROLLER’S OFFICE
New York’s Industrial Development Agencies (IDAs) provided $695 million in net tax exemptions in 2015, an increase of 10 percent from the prior year, according to a report issued Monday by New York State Comptroller Thomas P. DiNapoli.
“New York’s IDAs are tasked with generating economic development and job creation, but it can be difficult for taxpayers to follow the costs and benefits of these activities,” DiNapoli said. “Our annual report tracks IDA performance and shows the costs associated with their decisions. Now, because of recent reforms requiring more disclosure, taxpayers will have even more information to evaluate the cost and impact of economic development activities taking place in their own backyards.”
DiNapoli’s report found the state’s 109 active IDAs provided approximately $1.2 billion in total tax exemptions in 2015. These exemptions were partially offset by $500 million in payments in lieu of taxes (PILOTs), leaving the total net exemptions for the year at $695 million – an increase of $63.2 million, or 10 percent, from 2014.
Estimated job growth slowed and the cost per job gained increased, according to the report. In 2015, IDA projects reported a total of 608,825 full-time jobs, with an increase of 224,734 jobs over the life of these projects, at a median cost of $2,326 per job gained. In 2014, cumulative job gains for projects active in that year equaled 235,888 with a median cost per job gained of $1,882.
The five IDAs with the largest job gains in 2015 were: New York City (33,956 jobs at a net cost of $2,522 per job gained); Monroe County (22,714/net cost of $1,090 per job); Suffolk County (12,976/net cost of $618 per job); the Town of Amherst (9,658/net cost of $793 per job) and the City of Yonkers (8,004/net cost of $4,320 per job).
The Comptroller’s annual report also found:
· During the five-year period starting in 2011, overall exemptions given by IDAs were down $211 million. But because of a $400 million, or 45 percent, drop in PILOT payments during this time frame, the total value of net exemptions actually rose $190 million. Exemptions are primarily related to local real property taxes;
· The majority of projects in 2015 were associated with county IDAs, with 2,713 (61 percent) of all active projects. City IDAs accounted for 932 projects in 2015, nearly half of which were from the New York City IDA;
· Long Island (795 projects), Western New York (786) and the Finger Lakes (746) had the largest number of projects in 2015;
· Long Island ($161 million) and the Mid-Hudson Valley ($138 million) had the highest total net exemptions; and
· Manufacturing accounted for 1,187 projects, or 26 percent of all projects, in 2015. It has continued to be the most common project purpose, but its share of the total has dropped by 3.5 percent since 2011.
DiNapoli noted that project data in this report predates new IDA reforms that went into effect in June 2016. The reforms, based on legislationadvanced by his office in 2015, will improve the process of how IDAs approve new projects, the quality of the information they gather about the projects, and the policies for recapturing financial assistance if project goals are not met. The Comptroller also said PILOTs, which partially offset tax exemptions, represent revenues for multiple jurisdictions, making careful budgeting for all impacted entities increasingly important.
Moving forward, DiNapoli’s staff will assess how well these procedural improvements have strengthened public accountability and transparency of IDAs.