New York’s 115 industrial development agencies are doing a poor job of tracking and verifying job creation and retention for projects that receive public benefits, the state comptroller’s office reported last week.
“It’s more imperative than ever that tax dollars are spent efficiently and effectively, especially when those dollars are being used to create jobs,” Comptroller Thomas DiNapoli said in a press release.
“There’s still a lot of shadow surrounding IDAs,” he said. “We need to spread a little more sunlight and transparency to make sure tax dollars are being spent in the most efficient way possible and that projects supported by those dollars are creating the most jobs possible.”
The report compared 2008 data with that from a year earlier. IDAs offer a number of incentives for economic development, including tax-exempt bonding and tax breaks.
The number of IDA-assisted projects increased, as did the number of tax-exemptions. The agencies assisted 4,471 projects compared to 4,130 a year earlier and granted $645 million of net exemptions in 2008 compared to $593 million in 2007.
The expiration in 2008 of a law allowing IDAs to issue tax-exempt bonds on behalf of nonprofit entities has curtailed some issuance and outstanding debt issued by IDAs decreased slightly, to $21.6 billion from $22.1 billion.
Reported job gains from IDA projects decreased to 195,466 from 226,602, a nearly 14% year-over-year drop. Most of the decline was attributable to an approximately 30,000 decrease in reported jobs for projects assisted by the New York City Industrial Development Agency.
The agency reported 20,000 net job gains in 2008 compared to 50,000 in 2007. That decrease appeared to reflect incomplete reporting rather than job losses, the report said.
“NYCIDA works hard to make sure that we receive regular reports from companies that have received benefits,” agency spokesman Kyle Sklerov said in an e-mail.
Sklerov said that about 94% of companies are compliant with reporting requirements but that some firms in litigation, bankruptcy or whose deals are in the process of being terminated are not compliant.
Five of 10 IDAs suspended in 2008 by DiNapoli’s office for failure to file complete reports have come into compliance.
Agencies in Erwin, Newburgh, North Greenbush, Oneida and Waterford are still suspended and unable to offer state tax exemptions.