New York Focus: These Local Agencies Hand Out Over a Billion in Tax Breaks Across New York
New York Focus has an excellent explainer on Industrial Development Agencies: what they are, how they function, how they decide on what projects to give money and who holds them accountable (or not). The article also mentions proposed reforms to the powerful, yet unelected bodies, which have vast authority to give away billions of dollars of the public’s money.
“Arguably the most common critique of IDAs is that the tax breaks they give out negatively impact schools. Senator Sean Ryan and Assemblymember Harry Bronson have introduced a bill that would prohibit IDAs from eating into school tax revenue. The bill has garnered support from major power players like New York State United Teachers, the state’s largest union. The bill’s advocates say the support of statewide unions marks a turning point in the decades-long fight to reform IDAs.
While IDAs were originally meant to persuade out-of-state businesses to come to a New York town or city, a frequent criticism these days is that they pit municipalities against one another. Instead of attracting a business to set up shop in New York over New Jersey, the IDA system leads counties to enter into bidding wars, competing to offer a corporation the biggest package of tax breaks. Economic development policymakers and watchdogs commonly referred to this phenonmenon as ‘a race to the bottom.’ To address this issue, Skoufis has introduced a bill that would establish a single IDA in each region of the state, decreasing the number of agencies from 107 to 10.
Finally, Senator Liz Krueger and Assemblymember Michaelle Solages have introduced a bill that would establish a searchable database of IDA subsidies. In 2022, New York created a database of deals for the state’s economic development arm, Empire State Development, that tracks tax incentives and job creation per subsidy deal. But according to the Citizens Budget Commission, almost 60 percent of New York’s $10.7 billion in annual economic development incentives is spent by local authorities like IDAs. Advocates say a database of local IDA deals will help fill the gaps in our understanding of how much money New York is funneling into corporate tax breaks overall.”
Read the full story at NY Focus.