Behind the Clawback Curve

April 23, 2008

Though clawback provisions are now a standard part of many incentive agreements throughout the country, the

Amherst Industrial Development Agency

has decided they’re not for them. By a 3-2 vote last week, the board of the IDA in the Buffalo suburb of Amherst defeated a motion that would have made clawback provisions standard in all future incentive agreements. They voted down the proposal even though it would not have made clawbacks mandatory; it would have only inserted language into new agreements


– as opposed to requiring – the Amherst IDA to recapture subsidies if companies fail to meet their job promises. According to the

Buffalo News

, the IDA board member who put forth the proposal saw clawbacks as a “tool” the Agency could choose to use – or seemingly ignore – at its discretion.

Clawbacks need to be enforced to be of any use, but the Amherst IDA board vote shows disapproval for even their consideration. While the executive director of the Amherst IDA


a general opposition to clawbacks, other members of the board said they couldn’t pass the proposal due to a recent memorandum of understanding among Erie County’s six IDAs, in which they agreed not to unilaterally change their policies without a consensus.

In our report

Sprawling by the Lake

, we found that IDA incentives in the Buffalo region had a suburban bias, and the hyperactivity of the Amherst IDA was a major reason for this. In the report we recommend consolidation of the county’s IDAs so that investment in the region may be directed where it is most needed. We also recommend other policy options in support of a statewide

IDA reform campaign

lead by New York Jobs with Justice.

Statewide IDA reform, as well as the ways in which economic development subsidies undermine older urban areas across the country, are both topics that will be covered at the upcoming Good Jobs First


, May 7-8.