Rochester, N.Y. – Monroe County’s industrial development agency continues to award millions of dollars in tax breaks to businesses, even as municipalities and school districts are struggling.
New York’s Authorities Budget Office tallied up the incentives given by every IDA. Between 2008 and 2011, they awarded a collective $2.2 billion, when adjusted for payments in lieu of taxes.
COMIDA, Monroe County’s IDA, awarded $71.2 million in sales, property and mortgage tax exemptions to businesses between 2008 and 2011.
“That means every family in Monroe County is putting up on average about $80 a year to subsidize the businesses that got these deals,” said author and tax expert David Cay Johnston.
Monroe County claims the businesses invested $1 billion and created and retained 16,000 jobs. The county also points to a Center for Governmental Research study saying the community gets back five times the cost of the incentives.
“Nobody likes incentives and I wish we lived in a state where we didn’t need incentives,” said County Executive Maggie Brooks. “These are things when a company is trying to figure out do I stay in Rochester or Monroe County even New York State, or do I go elsewhere, what are the things that will level the playing field so it makes it easier to do business?”
“There is no evidence these programs are creating jobs,” said Johnston, who points out the Rochester region lost about 8,000 jobs during the study’s timeframe.
The study said job figures provided by IDAs could not be verified because it's not clear if they would have been created anyway.
Erie, Niagara and Greene counties are the only Upstate counties that awarded more in tax breaks than Monroe County.
Ben Kendig is among the developers who got a sales tax exemption. He rehabbed 44 Exchange St., a former bank that sat empty for years. It’s now filled with high-end apartments. His sales tax exemption for the project was more than $34,000.
13WHAM News asked Kendig if he would have been able to do the project without the tax abatement.
“Yes, you could take one or two of these sources away and get the job done, but it wouldn’t be the kind of job with the kind of amenities that we want, so when people go in they say, ‘Oh I want to be here.’ You need to have that, because we’re in competition with the suburbs,” Kendig said. “The taxpayers, when they subsidize these projects with sales tax or through property tax, what they’re doing is making them feasible so people want to be here.”
Governor Andrew Cuomo recently proposed taking away the ability of local IDAs to award state sales tax exemptions. He said some businesses are just moving jobs around the state.
Johnston thinks the state should go farther in IDA reform.
“We’ve set up a system where business blackmails the government,” he said. “Give us money or we’ll go somewhere else.”