Albany, NY: Senate Labor Committee Chair George D. Maziarz and Assembly Local Governments Committee Chair Robert K. Sweeney were flanked by community, environmental and labor leaders from around the state, as they announced the introduction of legislation to reform Industrial Development Agencies in preparation for upcoming negotiations over provisions of the IDA law that expire in July. The more than 100 IDAs statewide provide hundreds of millions of dollars a year in tax exempt financing, property and sales tax breaks in order to spur economic development. According to the legislators and the advocates, IDAs need to be more accountable to taxpayers, provide greater transparency and openness in IDA proceedings, comply with environmental and labor laws and provide assistance only to companies that will pay decent wages.
“Companies should not be getting tax breaks to create jobs that pay so little that the people who get the jobs are eligible for public programs like Medicaid or food stamps,” said Senate Labor Committee Chair George D. Maziarz (R-Newfane), sponsor of the legislation in the Senate. “When we give tax breaks, or other subsidies, we should make sure our communities are benefiting from them.”
Portions of the law governing Industrial Development Agencies across the state are set to expire in July, giving the Assembly and Senate an opportunity to reform the system so that it operates efficiently.
“When used right, IDAs are important economic development tools,” said Assembly Local Government Committee Chair Robert Sweeney (D-Lindenhurst), sponsor of the legislation in the Assembly. “We have a real opportunity this year to make common sense reforms that will make sure communities benefit from IDA assistance.”
Some IDAs require companies that receive assistance to pay taxpayers back if they do not create the jobs they promise. But many IDAs do not have the requirements, called recapture provisions or “claw backs.” The Maziarz-Sweeney legislation will require that claw backs be included in all IDA contracts.
“Our position is pretty simple,” explained Ed Donnelly, Legislative Director of the New York State AFL-CIO. “If the companies don’t create the jobs they promise, taxpayers should get their money back. When hardworking New Yorkers don't do their job well, they get fired. Why should companies that get tax breaks be rewarded for failing to meet their commitments?”
“IDAs should be promoting economic development by helping responsible businesses create good jobs that pay living wages and offer affordable healthcare,” said Wilfredo Larancuent, International Vice President of UNITE HERE. “Instead, some IDAs give tax breaks to companies whose workers often cannot afford healthcare for their children and which has a documented record of breaking labor laws. The Legislature should reform IDA laws so that New Yorkers’ hard-earned tax dollars do not subsidize scofflaw companies."
"Companies benefiting from millions of dollars in tax breaks should pay their workers decent wages," said Kevin Doyle, Executive Vice President of Local 32BJ. "Because the public is paying for these corporate tax breaks, the public has a right to see that these companies provide decent jobs to the community."
Although IDAs are created by state law, they operate locally, at the county, town or village level. Unfortunately, there is often little public awareness of an IDA’s activities.
“Public hearings are currently required on large projects and on projects that deviate from an IDA's 'uniform tax exemption policy.' But those hearings come at the end of the review process and right before final adoption. For public hearings to be really useful, they have to be held earlier – well before a project is a done deal,” said Frank Mauro, Executive Director of the Fiscal Policy Institute. “We also think that any company that wants public assistance should be required to provide the IDA with an easy-to-read analysis of the project's costs and benefits (to taxpayers and to the economy as a whole), and that those reports should be made available to the public without having to file a Freedom of Information request."
“If IDAs are going to really benefit the local communities, then taxpayers and their elected officials need to be able to effectively oversee what they are doing," said Sam Williams, Political Director of UAW Region 9.
Senator Maziarz and Assemblyman Sweeney said that they are working with Local coalitions throughout the state organizing rallies, and collecting postcards to send to elected officials to urge IDA reform.
“The Senate and Assembly need to listen to what hard-working taxpayers around the state are saying and implement these urgent reforms before the end of session,” commented Adrianne Shropshire, Executive Director of NY Jobs with Justice, which is spearheading the Initiative for Development Accountability, a statewide coalition organizing for IDA reform.
Senator Maziarz and Assemblyman Sweeney expressed optimism that the legislation would be addressed before the end of this Session.