Gary, I take exception to your reasoning because any way you cut it, taxpayers take the hit by making up difference. As mentioned by you, IDA's in general charge fees for their services. In turn, they reduce tax rates and/or offer low interest loans with no strings attached. Keep in mind, there are no checks and balances to this process. If this was not a sole political entity and was looking out for taxpayer best interest ONLY, most IDA's would not be issued. It just seems to me that we have a "protection scheme" in place with IDA's. When looking at names of IDA board members, political ties cannot be ignored. At the end of the day, taxpayers are the losers.Originally Posted by gshowell
Lancaster Town Supervisor Bob Giza should resign from Lancaster's Industrial Development Agency.
Political/Financial Conflicts.
OH! Snucks - I forgot it is illegal to speak bad of the Almighty Geeze - Should I pack now or Wait for his Town Board session outcry's?
Dam- I hear sirens !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
#Dems play musical chairs + patronage and nepotism = entitlement !
I do not have anything against Mr. Marrano but do agree IDA process needs to be seriously looked into.
Found this article in Buffalo News online opinion section:
Sound famaliar here in Lancaster???
Reform of IDAs is long overdue
December 02, 2009, 7:02 AM
The News’ Albany and local correspondents have penned multiple articles recently about the governor’s call for the long-overdue reform of industrial development agencies.
New York State has more than 115 IDAs, with six operating in Erie County alone. These quasi-governmental agencies are giving huge tax breaks to empty office parks in the suburbs, low-wage hospitality employers, amusement parks, well-connected developers and for-profit housing developments—all with no strings attached. If our IDAs were truly attracting and retaining quality jobs, it might be worth the revenue loss to our local governments, but they aren’t. These agencies have long been engaging in acts of “economic violence.”We need statewide reform to stop the further abuse to our counties caused by these IDAs.
We need economic development programs that are more accountable to the taxpayer, and more focused on making real and lasting investments in our city and our neighborhoods. Requiring increased reporting, green building standards and quality job standards on projects receiving a free ride is common sense. The IDAs in Erie County have already started to implement a new system of basing incentive levels on whether businesses meet certain wage and environmental standards. Why not expand upon this with statewide reform?We can’t afford business as usual any longer.
Jim Anderson
WNY Regional Board Chairman Citizen Action of New York
Great find iching.
Georgia L Schlager
I attended the IDA Leadership Council "Tiered Incentive Workshop" yesterday 12-2-09. This was a work shop forum and discussion regarding IDA's new tiered incentive system as well as a round table discussion of regional economic development issues and strategies. While points were more geared for business & government to work together, I found presentation very interesting and walked away with a better understanding on how IDA process "should" work. Presentors John Cappellino & David Mingoia did an excellent job of explaining what should be the goal of ALL IDA members. Doctor Kathryn Foster mentioned that all 6 separate IDA's are to use same playbook & follow same rules. This being the case, she asked "why do we need 6 separate IDA's"? I have to agree with her and wonder why all six are not consolidated. Wouldn't we have more accountability to the taxpayer? The public needs to be kept in the loop. I was very disappointed as I listened to Commissioner, Erie County Department Environment & Planning, kathy Konst. Ms. Konst focused on infrastructure. Kathy is the same person that chaired resolutions in the County Legislature for funds to be appropriated to Lancaster Airport. I cannot get past the fact that our airport makes nothing and has no plans to hire. After hearing how IDA is supposed to work, I am more convinced than ever that Lancaster Airport should not receive IDA tax breaks. It is my opinion that the LIDA needs a serious overhaul since they have not followed what I believe to be a good concept. Doctor Kathryn Foster's idea that all 6 IDA's should be incorporated into one agency is one to be taken seriously.
I also agree that the Lancaster Airport does not fit any of the criteria for granting IDA's. Was it mentioned whether the Lancaster IDA was on board with the new policy revision?
Here's an article from the Buffalo News regarding the revision of the IDA policy from 11/18- http://www.buffalonews.com/407/story/865605.html
Georgia L Schlager
Good attachment Jim. Could have done without the yawn. You and I have understood for some time of the IDA abuse system. Others in Lancaster are just begining to understand how the game is played; and that's a good thing.
The information provided is enlightening. Three years ago when I addressed the Lancaster Town Board on IDA abuse and spoke on Lancaster never using the "clawback" provision, a town councilman asked, "What is a clawback provision?" Go figure!
It's frustrating that people think that these failed agencies can ever be reformed.
Government doesn't work. Make it small and local so you can vote with your feet.
Free New York News Alert No. 10Comptroller’s Reports Prove IDAs Must be AbolishedAbolishing Industrial Development Agencies was part of the initial Free Buffalo package of proposals in 2004-5.1
By James Ostrowski
May 25, 2006
Subsequently, we issued News Alert No. 6—"Public Authorities Have Failed the Public." That report stated:
or the ballot box. When things go wrong, those in charge are neither voted out of office nor do they lose their investment.. . . authorities, like all government agencies, are bureaucracies, that is, organizations governed by rules and not by the desire to earn profits by satisfying customers. Authorities share with other government agencies all the defects of bureaucratic management but have one major additional defect: you can’t vote the managers out of office. It is time to recognize that the authority system of public administration in New York has failed. . . . The authority system failed because authorities are not subject to the discipline of the marketplace
1 http://www.speakupwny.com/article_1948.shtml (scroll down).
This much can be said with certainty today: get rid of the IDAs (Industrial Development Agencies). They are unnecessary, unproductive, wasteful and a violation of the concept of equal protection of the laws—facts which, in a less decadent political climate, would be obvious to all.
Well, the political climate in New York is getting less decadent all the time as evidenced by two reports last week by the State Comptroller Alan Hevesi:
The substance of these reports fully supports Free New York’s position that IDAs should be abolished. If the concluding recommendations of the reports do not say as much, that’s a mystery only the Comptroller’s office could explain. • Industrial Development Agencies’ Project Approval, Evaluation and Monitoring Efforts
• Industrial Development Agencies in New York State: Background, Issues and Recommendations
These reports, taken together, offer the following facts and inferences:
any reasonable cost-benefit analysis of their activities. • IDAs generally underproduce on promised job creation.
• Both IDAs and their clients keep poor records.
• This prevents
• IDAs don’t "recapture" tax breaks when companies fail to create new jobs.
• There is no unbiased study that demonstrates that IDAs accomplish their stated mission of improving the economy of New York.
• IDAs do consume considerable economic resources in personnel, independent contractors and labor costs.
• IDAs shift the tax burden from their clients to the vast majority of citizens who are not their clients.
These reports are a devastating critique of IDAs in every aspect of their activities.
When one turns to the recommendations of these reports, one expects to read: The 36-year experiment with IDAs has been a failure. No one has or can prove their worth. Abolish them!
Instead, a series of dubious reforms are proposed. None will work because none creates incentives for the IDAs to do what they are supposed to do: improve the economy. The simple fact is that IDAs are very good at closing development deals because that’s
2 The Tax Foundation estimates that New Yorkers pay 12.9% of income in state and local taxes whereas Pennsylvanians pay only 10.4%. Total state and local spending in New York is at least $190 billion. Source: http://www.ppinys.org/reports/jtf200...alspending.htm
the trigger for getting paid a percentage of the deal as their fee. Once they are paid, they have little financial incentive to follow-up with their clients to see if they have fulfilled their job-creation projections.
Statewide, IDAs spend over $90 million shifting $388 million in taxes from a small number of businesses, mostly larger ones, and onto all state taxpayers, without any proof that this is helping the economy. Not included in this figure are costs such as delays in development projects caused by bureaucratic inertia and paperwork, and the costs of clients maintaining records (haphazardly).
Simple math tells us that if we took the $90 million the IDAs take from developers to save them $388 million in taxes, the total cost of IDAs is $478 million annually (based on 2004 figures). Abolishing IDAs could return nearly half a billion dollars to New Yorkers each year in the form of across-the-board tax cuts and other savings. Those funds would themselves stimulate economic activity and employment. The difference is that this stimulus would be market-driven—awarding the most efficient entrepreneurs--as opposed to the IDAs politically-driven investment decisions that reward the politically-shrewd and well-connected.
IDAs distract our attention from the real work that needs to be done to revive the New York economy: reducing the cost of state and local government. New York government spending is at least twenty percent higher than Pennsylvania’s.2 Twenty percent of New York’s state and local spending (about $190 billion) is about $38 billion! Thus, in terms of making New York competitive with Pennsylvania, not to mention Texas, North Carolina, India, and China, our IDAs are inconsequential. Their main effect is to dampen support for generalized tax cuts among influential business leaders who might otherwise lead the charge for such cuts. IDAs are thus serving to prop up the stagnant status quo in New York’s political economy.
Summarizing a 1992 report by State Senator Franz S. Leichter, the Comptroller’s second report cited above states, and Free Buffalo agrees:
Would a private corporation suffer a failed division like the IDAs for 36 years? "IDAs routinely provide support to projects that would have been completed without such assistance; existing relationships between developers and IDAs often determine which projects are granted assistance; politically connected contractors, consultants, attorneys, and IDA board members similarly benefit from and determine which applications for IDA assistance are approved; piracy is commonplace; and IDAs, whose fees are based on a percentage of project-related bond issues, are induced to support large projects."
#Dems play musical chairs + patronage and nepotism = entitlement !
Hopefully they must follow new guidelines....
[QUOTE=gorja;578777]I also agree that the Lancaster Airport does not fit any of the criteria for granting IDA's. Was it mentioned whether the Lancaster IDA was on board with the new policy revision?
No, not mentioned....
I just realized there are over 2000 views on this thread....
In the report below it states:
"The simple fact is that IDAs are very good at closing development deals because that’s the trigger for getting paid a percentage of the deal as their fee."
So like other lenders/banks and brokers - they get a percentage payment on these deals. Where does that money go and how does it benefits residents?
"Once they are paid, they have little financial incentive to follow-up with their clients to see if they have fulfilled their job-creation projections."
They have rarely ever gone after those who fail to create promised jobs. Lancaster's IDA routinely writes off "Expected Loan Losses" of at least $50,000.00 on such ventures as the Boccies/111 Main St. (Sav-A-Lot) purchase.
"Statewide, IDAs spend over $90 million shifting $388 million in taxes from a small number of businesses, mostly larger ones, and onto all state taxpayers, without any proof that this is helping the economy."
Again as we feared - we are all picking up more property taxes to subsidize developers and businesses.
Finally - Lancaster Town Supervisor/IDA Chairman Bob Giza's
I.D.A. page boasts :
"Real property tax incentives are generous
and require no negotiation."
(Millions of dollars in tax breaks)
#Dems play musical chairs + patronage and nepotism = entitlement !
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