By Bill Nuckel
It’s time to put the Yonkers IDA on hiatus! IDA was created by NYS law in 1969 to promote economic welfare, create long term jobs, and a 2015 reform law added another requirement: A company must attest that it could not develop the project for which it’s seeking a tax break without the discount. Three very simple rules.
In theory, IDAs should create permanent jobs in a community and boost the local economy, not only through these jobs but also via increased tax revenue from pilot payments. But experts argue that subsidies, including those from IDAs, don’t actually provide an economic boost as intended. In 2013, economic development researchers were asked to prepare a report on subsidies for the New York State Tax Reform and Fairness Commission. The study found a major flaw in the structure of New York’s subsidies: Tax breaks may go to a business that would construct a project even without the subsidy package. The study found no conclusive evidence that “state and local taxes, in general, have an impact on business location and expansion decisions.”
In addition, IDAs generally aren’t meeting their job creation numbers. The Authorities Budget Office analyzed data from projects approved in 2018 and found that five years later, in 2023, the projects had generated almost 60 percent fewer jobs than promised when the projects were approved.
Another common critique of IDAs is that the tax breaks they give out negatively impact schools. Most public school funding in New York comes out of residents’ property tax payments. But IDAs have the power to lower the property tax burden for businesses and developers — and as a result, schools miss out on that money. IDAs often use the “but for” requirement to argue that their tax breaks aren’t actually drawing away from local tax revenue at all: In the absence of a pilot, they claim, there would be no project and therefore no taxes to collect to begin with. But school districts lost $1.8 billion to IDA tax breaks in 2021, according to a study by the subsidy watchdog group Good Jobs First.
Under NYS Law it is not permissible for IDAs to subsidize housing. How many projects in the last five years have been for new housing? Additionally, applicants are asked if they can undertake the project if not for the tax breaks. The application is submitted under penalty of perjury. Not saying they perjured themselves, but how many big established and well known housing developers have received IDA pilots?
The Yonkers IDA has approved millions of dollars in tax breaks, all at the expense of the taxpayer. How many projects have not been completed or gone belly-up? Every
application approved, since most are for housing, puts the taxpayer on the hook. In addition, if you have made your payments on time and have $10,000 remaining, ask for a grant – you’ll get it. Ten thousand dollars, more free money. And how do we know if workers are paying Yonkers “luxury” tax for non-residents, not many of the applicants have Yonkers billing addresses. It’s time to put the Yonkers IDA on hiatus.
Our Mission: The Mission of the City of Yonkers IDA includes undertaking projects and programmatic initiatives in furtherance of and to advance the job opportunities, health, general prosperity and economic welfare of the people of the City of Yonkers and to improve their recreational opportunities, prosperity and standard of living. YIDA works to create economic development and job growth throughout the City of Yonkers by attracting new businesses, retaining existing ones and helping them all become more competitive in a global marketplace.
- Incentives include:
- Mortgage Recording Tax Exemption
- State and Local Sales Tax Exemption
- Real Property Tax Abatement Program (PILOT)
- Access to Tax-Exempt Bond Financing
Information provided by “New York Focus, Who Runs New York”
