Next month, state Comptroller Thomas DiNapoli will issue his department”™s performance report for Industrial Development Agencies within the state for 2009. It will be a jobs-heavy report, yet the comptroller acknowledged in his last IDA report there are asterisks, with wage data “often incomplete, making it difficult to gauge the quality of the jobs created.”
Among the findings in the current report is that Rockland County takes promises to create jobs seriously and wants its money back if businesses that got help fail to deliver on the paychecks.
The most recent report features 2008 data and states in its first paragraph that “issues regarding IDA transparency and accountability persist.” It later says: “The most critical project performance metric ”“ job creation and retention ”“ still suffers from poor tracking and verification.”
The current 2008 report”™s job creation figures (not just IDA projects) serve as a gauge of economic activity and a potent snapshot of the Great Recession.
In 2005, the comptroller”™s office report cited a cumulative statewide job gain of 300,994; by 2008 that number had dwindled to 195,466.
The report offers a parenthetical aside on job losses of 31,000 between 2007 and 2008, saying the number may be the result of IDA reporting issues and could  reflect too many losses.
“For example,” the report said, “the New York City IDA did not report 17,000 jobs associated with just one project because it could not verify the actual jobs data.” Incomplete employment data leads to a zero placed in the “jobs created” box and, “There may be as many as 14 projects assisted by the New York City IDA that were completed in 2008 where the current employment information may have been incomplete.”
The comptroller said a total 45 such projects statewide may have underreported their employees in 2008. The report said, “Inconsistent project monitoring continues to raise questions about the costs versus the benefits of IDA job creation.”
Incomplete and inconsistent data also skew wage figures, the comptroller said.
Still, the report stated, “As New York emerges from the Great Recession and seeks to rebuild its economy, it is critical that IDAs provide accurate, consistent and transparent analysis of job creation and retention so that costs and benefits of IDA tax expenditures can be adequately justified and decision makers can properly evaluate how to best invest taxpayer resources.”
In 2008, the state”™s 115 IDAs had their fingerprints on 4,471 projects with a total project amount of some $65.6 billion.
Of the eight projects statewide involving more than $100 million, the five-county Lower Hudson Valley region captured one: the remake of 961 antiquated homes housing West Point personnel into just 824 by July 2016. London, England-based Balfour Beatty Communities is the developer with offices beyond Thayer Gate, “on post.”
The $144 million West Point project offered tax exemptions across the board totaling some $1.4 million. (Outside New York City, the largest tax exemptions went to a pair of counties at the opposite ends of the prosperity spectrum: Nassau and Greene counties each offered between $25 million and $30 million in tax incentives to developers.)
In the report, IDA-orchestrated deals with local government needs (typically tax breaks and payments in lieu of taxes) accounted for about two-thirds of incentives; and about 20 percent typically came from a break on local school taxes.
State and local sales tax exemptions amounted to another 13 percent of the exemptions and savings and a break on the mortgage recording tax added savings of a final 1 percent.
IDAs, as the name implies, tilt toward manufacturing when they make deals: 29.5 percent of the 2008 IDA activity was in manufacturing; 22.5 percent was in services. Civic facilities took the next-largest benefit: 12.9 percent. Agriculture, forestry and fishing projects netted just 0.4 percent.
“Some IDA projects are intended to create new jobs and some are intended to retain existing jobs and some are meant to do both,” the report said, citing 435 projects in 2008 that promised job retention of 136,700 positions, but not job creation. The comptroller estimated it cost the state $1,024 in tax exemptions per job retained. And, “Nearly half of all IDA projects (1,858) had both job retention and job creation.”
In its “Best Practices Spotlight,” the comptroller singles out Rockland County, saying, “The Rockland County IDA recaptured $93,000 in state and local taxes from a company that did not maintain the employment level agreed to when the project was approved ”¦ The recaptured taxes represent 100 percent of the tax exemptions contained in the original agreement, plus an 18 percent penalty.”
Also under the same “Best Practices” banner: “In addition, the Rockland IDA has a policy of requiring that the prevailing wage be paid for all project employment and that unemployed persons receive assistance in finding jobs on IDA projects.”
That stance is seen by some as stifling development by pricing labor too high.
The report said outstanding IDA debt had declined between 2007 and 2008 by $500 million to $22.1 billion.
