New York Comptroller Thomas DiNapoli has reported that the state’s industrial development agencies have improved their transparency but have to do more.
The agencies were created to facilitate the attracting, retaining and expanding of businesses. To accomplish this, the agencies offer tax-exempt debt financing and exemptions from property, sales and mortgage recording taxes. To offset the loss of taxes to their communities, many of the benefiting companies make annual payments-in-lieu-of-taxes.
In the report issued Tuesday covering fiscal 2011, DiNapoli staff reported that the agencies supported 4,500 projects and provided $560 million in net tax exemptions. The net tax exemptions were up 16% from fiscal 2010.
The report estimates that because of the agencies’ involvement, the projects will generate an additional 217,587 jobs over the projects’ lives.
“IDA’s have made modest improvements in terms of job creation and openness, but more accountability is needed to ensure benefits are provided to those projects with the greatest potential to fuel local economies,” DiNapoli said.
Specifically, DiNapoli is recommending that agency project agreements compel accurate disclosure of employment information, agencies publish annual report cards with detailed information on projects, agencies be required to adopt uniform and objective project evaluation and selection criteria, and agreements include “clawback” provisions if project goals are not met.