Whether a law allowing New York’s industrial development agencies to sell tax-exempt bonds for civic facilities and nonprofits is allowed to expire on the end of the month may depend on Gov. Eliot Spitzer.
Sen. Elizabeth Little, R-Queensbury, and her counterpart in the Assembly, Sam Hoyt, D-Buffalo, unable to work out a compromise, are looking to Spitzer for direction.
The senator, “like Assemblyman Hoyt, is under the understanding that the governor is going to be introducing IDA reform legislation,” said Daniel MacEntee, a spokesman for Little. “She’s not aware of any of the specifics of that proposal at this point. We’re waiting to see either a draft or actual introduction of the bill.”
Hoyt, who did not return calls asking for comment yesterday, said in an interview last month that he was waiting for input from Spitzer on IDA reform.
Last year both legislators introduced competing IDA bills but could not reach a compromise before the end of the legislative session, causing the law to sunset on June 30. Two and a half weeks later, legislators agreed to a nine-month extension, which expires Jan. 31.
Little won’t accept a provision in the Assembly’s proposal requiring workers on IDA-financed projects to receive prevailing wages. Hoyt has said that all issues are negotiable.
Timothy Gilchrist, the state deputy secretary for economic development and infrastructure, is said to be working on an IDA legislative package, but the governor’s office did not respond to repeated requests for comment.
“We feel like we’re just caught up in somebody else’s fight,” said Carl Young, president of the New York Association of Homes & Services for the Aging, a trade group representing more than 600 nursing homes and homes for disabled. “We feel a little bit as though the long-term care and civic facilities are being used as pawns in a quarrel between the more commercial interests in IDAs because whenever we talk to any of the legislative proponents, they say, ‘We think your members should have this access, we realize that helping make senior housing more available improving long term care facilities is a good thing, but we’ve got these other issues.’ ”
Those other issues are prevailing wages and what kinds of businesses IDAs should provide low-cost financing, he said.
“Our members are all not for profit,” Young said. “Surpluses go back into the project or the program.”
Critics have castigated IDAs in the past for providing tax-exempt financing for commercial projects they say would have gone ahead without it, that failed to produce promised jobs and economic benefits, and that gave unfair advantages to their beneficiaries.
The expiration of the law would drive up costs for their members and in turn drive up costs for seniors, Young said.
The low rate of Medicaid and Medicare reimbursement in New York makes it difficult for hospitals to finance capital projects, which makes IDA financing all the more necessary, said William Van Slyke, spokesman for the Healthcare Association of New York State, which represents hospitals and health care networks.
“Without positive margins you have to rely on debt if you need to grow and expand and keep pace with the evolution of care,” Van Slyke said. “We don’t have the margins in New York so we need to have the access to the low-cost debt.”
The organization is currently polling its members to find out if any projects would be affected by the law’s expiration. Lack of access to financing through IDAs could impair his members’ ability to provide medical services to their communities.
“The last thing New York’s hospitals need right now is uncertainty, and that’s what we’re going to face if the law expires,” he said.