UPDATE: Direct link to package here.
In today’s The Journal News and on LoHud.com, Tax Watch examines the region’s multimillion-dollar industrial development agencies, also known as IDAs. Read “The High Cost of Development” on the Tax Watch page - http://www.lohud.com/section/NEWS15/Tax-Watch.
The government entities charged with economic development and job creation in 2010 reported the creation of 16,000 new jobs in Westchester, Rockland and Putnam counties. The jobs came at a high cost: $66 million in tax incentives given to companies by IDAs, or $4,100 per job, and higher tax bills for many homeowners. 2010 is the latest year for which comprehensive data is available.
IDA officials say the tax incentives to draw companies and leave others from leaving New York, which has a high cost of doing business compared to other states. They say the projects have given the economy a boost and laid the foundation for long-term economic growth by attracting hundreds of new companies to the region.
But those efforts don’t come without strings. From the story:
- While the bulk of companies created jobs, more than one-third of projects started between 1992 and 2010 saw 2,100 jobs lost, state data show. Those projects accounted for more than $16 million in tax exemptions, though as multi-year deals many could produce jobs in future years.
- The incentives can mean higher bills for taxpayers. The state Comptroller’s Annual Performance Report on New York State’s Industrial Development Agencies for 2010 said in Yonkers, which has one of the state’s most active IDAs, homeowners paid an additional $96 in property taxes to cover revenue lost through IDA agreements.
- The cost to secure jobs is high. New Rochelle’s IDA had a cost per job gained of over $30,000 in 2010, the comptroller’s report said. Mount Vernon IDA’s spent about $16,600 per job. Comparatively, Westchester and Putnam IDAs’ cost per job were $1,517 and $784, respectively, in 2010. Rockland spent $1,843.
- Most IDAs acknowledge they cannot guarantee that companies create the jobs they promise. Companies that receive benefits are required to certify their employment figures annually, but such self-reported data have drawn criticism from state authorities who question its accuracy.