The Cost of 9 IDAs in Buffalo-Niagara

Assemblyman Sean Ryan (A-144) held a press conference yesterday to protest the way in which Industrial Development Agencies in Erie County do business. Specifically done in response to the Amherst IDA’s granting of an incentive package to facilitate Premier Liquor & Gourmet’s move from Kenmore to Amherst, Ryan issues three documents outlining the cost/benefit to running nine separate IDAs in Erie and Niagara Counties. By comparison, New York City has only one IDA.

This chart outlines the cost of these tax breaks, and what other things they might have bought, and then compares the annual IDA tax subsidies that are granted each year in New York State against the much-touted Regional Economic Council regional plans submitted and reported on in Albany last week:

IDA chart : Assemblyman Sean Ryan

Ryan avers that the IDAs have an incentive to remain open as separate entities, and to grant property and sales tax breaks even in cases where one WNY community is poaching from another – the fact that each announced IDA transaction results in a fee to the IDA itself.

IDA Report – Assemblyman Sean Ryan

Even more egregiously, if the IDA recipient business fails to meet its obligation to create jobs, there is no recourse or “clawback” provision. The common misconception is that IDA incentives exist to lure businesses to the area. Yet Ryan’s study reveals that, of all 71 incentive packages given by the IDAs in Erie and Niagara Counties in 2010, exactly one was to attract a business from out-of-state. The rest were for the expansion or intraregional relocation of existing businesses.

It’s high time the region started streamlining its business development and retention strategies in a coordinated, regional way. IDA incentives given to well-off local companies as a “freebie” with little to no return on investment, which oftentimes results in one WNY community poaching from another needs to stop. Assemblyman Ryan is on the right track here, and it echoes what Erie County Executive-elect Poloncarz was advocating during the last election cycle.

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  • Part of he problem is that there are 6 IDA’s. The bigger part of the problem with IDA’s is that they are allowed to assist business that don’t bring outside dollars to Western NY. IDA’s should only be allowed to give breaks to businesses that can demonstrate that at least 90% of the dollars that they generate come from outside of Erie County.

  • The IDA’s fee’s make some connected people very rich. Follow the money.

  • The video should be sold as a way to cure insomnia. Is it really big news that there are too many IDAs? The point you were trying to make was a Kenmore company move to Amherst (one in your district now out of your district), so point at the sign and say why give money to business that decided on its own to move elsewhere. If the point is made in court, then Amherst should not be allowed to “steal away” a business. Cases have been won on this issue.

  • How about NO IDAs??? Cost – zero.

  • Which IDA controls the spigot funding the dowtown Hyatt Hotel? How much has that cost the taxpayer and how many times have they asked for a taxpayer donation? Does any of this figure into Ostrowski’s lawsuit on public funding for private ventures? There are plenty of example of special tax breaks given to “developers and projects ” within the boundaries of this city. Instead of just concentrating on IDA’s I would suggest that Mr Ryan have some public meetings where the public could be invited to discuss the effciacy of shifting the costs of muncipal services from one individual or company to another who does not receive government subsidies. A new form of cost shifting is the construction of developments called “patio homes” under the condominium law. This is an issue that is expanding as these developments are built for upper middle income and wealthy homeowner who want to escape or discount their muncipal and school tax levies.

    I would hope that any tax incentives be treated as expenditures when making a yearly budget. The public should know how much money is not being collected and instead being given away to private individuals or companies. There is a need for more transparency in this process.

    There is a lot of room for Assemblyman Ryan to expand if he really wants to work for the public.

  • Kudos to Assemblyman Ryan! No IDAs sounds good to me. I thought we had a free enterprise system. If government subsidizes my bowling alley, I will put your’s out of business. Is government deciding which businesses succeed and which fail? Can you say Socialism, boys and girls? And BTW whatever happened to the “Industrial” in IDA? Other than my consumption level, what’s “Industrial” about liquor sales?

  • I’d rather have a few companies not meet the IDA criteria than to give that money to the scumbag liberal politians that continue to whore themselves off the tax payer to promote their political careers and drag this area further downhill.

  • Pete, your an asshole.

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