NY Subsidy Law Expires, IDA Reform Still Pending

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For the third time in the past two years, New York State law makers have failed to reach an agreement on legislation that would make Industrial Development Agencies more accountable. As a result, the part of the law that enables IDAs to issue tax exempt bonds for non-profits has again expired. Advocates have been using the expiration of this provision to push for broader IDA reform that would affect for-profit businesses as well as non-profits, but over the past two years the current law has been extended twice without any new reforms. As legislators continue to negotiate, it is unclear whether the standoff will end with real reform or another temporary extender of the current law. The Assembly recently passed a comprehensive reform bill (A8703), but the Senate has not taken action on this.

IDAs are the entities through which many discretionary economic development subsidies are granted at the county and local level. The State has a total of 115 active IDAs, which grant property and sales tax breaks to businesses and issue tax-exempt bonds for non-profits.

 

Labor, community and watchdog groups, along with some state officials, have long questioned the public benefits of many IDA deals. In 2006 a State Comptroller audit found that two-thirds of IDA projects did not meet their job creation goals and that most IDAs lack effective processes for evaluating projects. Last year Jobs with Justice released a report that also found that New Yorkers have not been ‘Getting Our Money’s Worth’ from IDA-subsidized projects, and Good Jobs First released a report showing that some IDA subsidies promote sprawl.

 

Since the late ‘90s, Good Jobs New York has been keeping track of the New York City IDA and reporting on its more egregious subsidies, including those for the New Yankee Stadium and its associated parking garages.

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