Local governments’ 113 active industrial development agencies—IDAs—gave out $1.5 billion in tax exemptions to 4,486 projects in 2011, according to a report today from state Comptroller Thomas DiNapoli’s office. Of the total, $680 million was for local property taxes and $439 million for school property-tax breaks. The balance was for state and local sales taxes, county property taxes and mortgage recording taxes.
Payments in lieu of taxes totaling $917 million partially offset the exemptions, for a net of $560 million in tax exemptions, the comptroller’s sixth annual report on IDAs found. That was an increase of $77 million, or 16 percent, from 2010.
The IDAs increased estimated job gains by nearly 36,000 from the previous year. Operating expenses for IDAs in 2011 were $60.4 million, an average of $549,000 per IDA.
“At a time when many counties, cities and towns are facing serious fiscal challenges and stagnant economies, the need for IDA projects to generate jobs for New Yorkers and expand the local tax base is especially urgent,” DiNapoli said in a statement. “IDAs have made modest improvements in terms of job creation and openness, but more accountability is needed to ensure benefits are provided to those projects with the greatest potential to fuel local economies. Tax breaks come at a price and IDAs need to deliver on their promises to taxpayers.”
IDA projects reported 702,269 full-time equivalent positions in 2011, an increase of 217,587 jobs over the life of the projects at an average cost of $3,575 per job gained. Cumulative job gains in 2010 were 181,712, with an average cost per job of $2,659. The cost per job differed significantly, depending on the areas of the state, the report said.
IDAs supported more retail projects despite evidence these types of endeavors generally don’t boost economic activity or the number of jobs in a region. A revision prohibiting IDAs from supporting retail projects ended in 2008. Since then, the number of those kinds of projects jumped 191 percent, from 36 projects to 105 projects, with a total value of $1.2 billion. The current year’s state budget reinstates the prior restrictions.
DiNapoli said IDA reporting has improved, but he recommended requiring IDAs to publish an annual report card with detailed information on individual projects; include local “clawback” provisions if project goals aren’t met; ensure project agreements have provisions that require accurate disclosure of employment information; and require IDAs to use uniform applications and adopt objective project evaluation and selection criteria.