Bee News Guest Editorial - An IDA system run amok, and you are paying for it

May 9, 2012

I have talked a lot about economic development and the challenges we face in Erie County. Chief among those is fixing a dysfunctional Industrial Development Agency system.

In Erie County, there are five town-level IDAs (Amherst, Clarence, Concord, Hamburg and Lancaster) and the Erie County IDA. Unfortunately, instead of fostering real economic growth, these town-level IDAs are engaging in questionable deals that do little to increase our regional wealth or create high-paying jobs.

We’re not talking about adding or retaining hundreds or thousands of manufacturing jobs at places like GM; we’re talking about giving retail businesses—pizzerias, ice cream parlors, doughnut shops and car dealerships — hundreds of thousands of dollars in tax breaks. Additionally, the IDAs rarely bring new businesses to Erie County. Instead, they simply shift existing businesses and jobs around from one town to another. And when they do create jobs, there are only a handful and they tend to be low-wage or part-time, which means little to no economic gain for our community as a whole. Worse yet, they are giving away predominantly sales tax incentives — money that is shared among all the county’s 44 municipalities and school districts — meaning that although we’re not benefiting from these deals, we’re all still paying for them.

An example is the relocation of Prime Wines. Amherst’s IDA gave $246,000 in sales tax breaks to lure, essentially, a liquor store from Tonawanda to Amherst. Of that, only $3,089, or about 1 percent, came from Amherst, while the remaining 99 percent was taken away from every other city, town, village and school district in Erie County.

In recent years, the IDAs have been unapologetic about ignoring their own rules dictating which projects are actually eligible for tax breaks. Just last week, a member of the Lancaster IDA board was quoted as saying, “We’re a rubber-stamp organization. We’re not a judge and jury.”

And why should they scrutinize these deals when they have nothing to lose? It’s not their money they’re handing out, and it’s not their concern when a deal has a negative impact on a neighboring town. It is clear that the current system isn’t working and, instead of waiting on the IDAs to follow their own rules again, we need to take action and hold them accountable.

Assemblyman (Sean) Ryan and I believe that the communities that are paying for tax breaks should have a say in what projects get them, and we are currently working on legislation that would do just that. This legislation, essentially, requires an IDA to get permission before handing out other communities’ tax dollars for their projects, while still allowing them to complete any deals they want using their own town’s property taxes.

I hope the IDAs will choose to join us in this conversation about the issue at hand, instead of continuing to launch personal attacks against those interested in reform. Our community deserves better.