Niagara Gazette

March 17, 2013

Niagara County IDA ranks second in total exemptions, outside New York City

By Mark Scheer
Niagara Gazette

Niagara Gazette — A statewide review of activity tied to industrial development agencies shows Niagara County near the top in terms of total tax exemptions offered as part of assistance packages for development projects. 

The Authorities Budget Office of the state of New York found that between 2008 and 2011, the Niagara County Industrial Development Agency ranked second in the state, outside New York City, with exemptions totaling $147.48 million. 

The analysis concluded that Niagara’s total was exceeded only by the Town of Hempstead, which the report said provided a total of $174 million in tax exemptions during the period in question. 

Statewide, the analysis showed that IDA projects realized more than $5.6 billion in total financial assistance from 2008 through 2011, of which $3 billion went to projects outside New York City. 

When adjusted for payments made by projects in lieu of taxes, or PILOT agreements, the net value of the exemptions totaled nearly $2.2 billion, including $1.6 billion outside New York City.

Net exemptions from potential school taxes totaled $757 million during and IDA-assisted projects were exempt from paying $276 million in state sales taxes and $262 million in local sales taxes during the four-year period. 

All of the information gathered for the report was compiled using data self-reported by the IDAs through the Public Authorities Reporting Information System. 

“Economic development officials see these tax exemptions as effective and essential for spurring economic development,” Authorities Budget Office Director David Kidera said in a statement issued following the release of his office’s report. “They view any restriction on the availability of financial assistance options as detrimental to job creation and economic development. At the same time, local governments and the state, which are asked to forego potential revenue, and taxpayers, who often bear the burden of these tax exemptions, expect that assisted projects deliver the new jobs and sustained economic benefits they promise. While we have improved the accountability and transparency of IDAs, we have not focused on whether this financial assistance equation is working for every community. Hopefully, this data release starts the discussion and helps public officials and taxpayers objectively draw their own conclusions.” 

Newly elected NCIDA Chairman Scott Kiedrowski issued a statement in response to questions about the budget office report, saying officials from the county agency are still reviewing its contents. 

“We agree with the statement from the New York State Economic Development Council that the report only looks at one half of the story and ignores the economic impact of the incentives provided by industrial development agencies as far as job retention and creation and investment,” Kiedrowski said. “The fact is that the Niagara County Industrial Development Agency is among the top performing economic development agencies in New York State as far as job creation during this timeframe, including the creation of approximately 375 new jobs in 2011 and 229 new jobs in 2010 as well as generation of tens of millions of dollars in capital investment.”

“The Niagara County Industrial Development Agency has been a catalyst in assisting companies to not only stay in the region but also to expand their operations as well as our efforts to bring in new investment,” he added. “We are proud of our work and look forward to continuing to help Niagara County grow and prosper.”

In addition to the county IDA, the report found the Town of Niagara IDA had $6.2 million in total exemptions during the four-year period, with total PILOTs paid of $3.95 million and total net exemptions of $2.27 million. 

The county’s other IDA, located in the Town of Lockport, reported $5.34 million in total exemptions, including $117,701 in total PILOTs paid and $5.22 million in total net exemptions. 

The state instituted PARIS in 2007 as a way to collect information related to the activities of public authorities in New York. The Authorities Budget Office has issued annual reports on IDA activity for years. 

Kidera said the multi-year analysis was intended to offer a longer-term perspective on IDA activities, noting that it is often the case where projects receiving tax breaks and other incentives do so under PILOTs extending out multiple years. 

The Authorities Budget Office did not offer any comment on the appropriateness of the level of exemptions offered by the various IDAs. 

Kidera said it is up to residents living in the individual communities served by the IDAs listed in the report to determine if they are getting a satisfactory return on the incentives being offered by those agencies. 

“Hopefully, it gives people a broader sense of what’s going on and lets people draw their own conclusions and encourages dialogue at the local level,” Kidera said.

$147M Amount of tax exemptions offered by the Niagara County IDA as part of assistance packages for development projects between 2008 and 2011